Africa’s IT and fintech sectors sustain drive to digitalisation
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Africa’s push to digitalisation was already in motion before the emergence of coronavirus in late 2019 — and the latest FT-Statista ranking of the continent’s fastest-growing companies shows the continued advance of those in digital and related sectors.
Financial technology, IT and software and ecommerce companies are well represented in this year’s 100. Ranked second, fintech services company Moniepoint of Nigeria was founded in 2015 and lays claim to providing essential technology assistance to more than 1mn businesses. It can offer point-of-sale terminals, online payment gateway processes, and business management tools.
Chief executive Tosin Eniolorunda notes that Moniepoint started out building infrastructure and providing back-end services for Nigeria’s traditional banking institutions. This helped it identify areas with unmet needs: “We optimised for reliability and ease of use. Businesses had a product they could depend on to accept payments with ease, and it was simple enough to get used to.”
Understanding Nigerian culture, he says, meant Moniepoint knew how people required not only the advantages of technology but also a “personalised” experience. “Providing a localised support system for these businesses made it easier for them to trust our product and, coupled with a reliable service, adoption was easy.”
Tomi Davies, president of the African Business Angels Network and based both in London and Lagos, says mobile connectivity has “gained widespread popularity by providing millions of people with access to financial services” while traditional banking services remain limited in many parts of the continent. Fintech start-ups are taking advantage of this growing digital economy and “you are going to see more of that”, he predicts.
Eniolorunda affirms that Africa’s adoption of fintech solutions still has a long way to go. One challenge, he adds, is finding more of the right executive and engineering talent.
Andrew Nevin, advisory partner and chief economist at PwC Nigeria, says tech companies are enjoying growth in the country as they are less capital-intensive to set up than, for example, large manufacturers. “People with innovative ways to solve existing problems in a low capital way are going to do really well,” he argues.
The stimulus effect of the pandemic continues to be felt. Lagos-based Rolake Akinkugbe-Filani, chief commercial officer at Mixta Real Estate and an adviser in areas such as energy transition, says that while Covid “primarily disrupted supply chains, it incentivised the need for more digital and automated payment systems that allow goods and services to get to consumers faster”.
However, Nigeria is not alone in recently experiencing fast expansion of its tech-focused sectors. The ranking’s two highest performers from South Africa — which accounts for about third of the companies on the list — are IT and software businesses Deimos Cloud (sixth) and Bluesky Digital Solutions (12th) founded in, respectively, 2018 and 2016.
Smaller countries like Malawi are noteworthy players, too. Nico Technologies (ranked 60) started as an IT section of financial services group Nico Holdings, founded in 1971 and one of Malawi’s larger companies.
Nico Technologies, launched in 2002, also offers services in neighbouring Zambia and plans to move further into southern Africa. Here it is up against South African IT and software companies but Clarence Gama, Nico Technologies’ chief executive, says embracing customer needs — “paying attention to detail and weighing options at hand” — has been key to its success.
Operating in Malawi, where internet penetration is low, it has encountered some of the problems that emerging IT businesses must overcome. “Technology uptake has been slow, especially in our country,” says Gama. “IT literacy needs improvement. The economy at large, ensuring little to no disposable income for many and diminutive resources, hinder business in the IT space.”
Even so, he prefers to see the gap in IT services as an opportunity: “Teamwork, skilled [work]force and leveraging on technology has helped propel us to levels that we never imagined.” Nico Technologies posted revenues of $2.6mn for 2021 and reports that it employs 34 permanent staff.
As for the pandemic, it helped Nico “prove how technology can be an enabler to people and its environment. Different systems were put in place to respond to the challenges that arose.” Gama reports that the company “saw no single job loss. Business was normal and all this is thanks to the role technology had to play.”