Lack of investments hindering Fintech growth in Africa – Dr. Ernest Addison

By Beyonce Diamond Kpogli
Business & Finance BoG Governor, Dr. Ernest Addison
BoG Governor, Dr. Ernest Addison

Dr. Ernest Addison, the Governor of the Bank of Ghana, has underscored the critical issue of inadequate investment stifling the growth of fintech innovation in Africa.

Speaking at the opening ceremony of the 3i Africa Summit in Accra, Dr. Addison highlights the detrimental impact of limited access to funding on the continent's digital finance agenda.

According to Dr. Addison, the lack of requisite investment in African fintechs poses a significant barrier to innovation and scalability, hindering the realization of Africa's digitization goals. The three-day summit, aimed at catalyzing Africa's digital finance agenda, brings together stakeholders from finance, policy, and technology sectors to explore synergies and drive momentum for digital transformation.

Despite the proliferation of fintech and tech startups across Africa, many struggle to scale due to a dearth of funding opportunities. Dr. Addison points out that while some startup founders secure funding, mismanagement, and misallocation of funds undermine their potential for growth and impact.

Recent industry data indicates a decline in startup funding in Africa, reaching a concerning 47% decline this year. This trend jeopardizes Africa's ambitions to build a digital economy fueled by fintech innovation.

Dr. Addison advocates for directing sufficient capital towards startups to enable them to develop viable prototypes and solutions that address Africa's unique financial service needs. He emphasizes the importance of bridging the funding gap to facilitate the progression of innovative fintech solutions from concept to production.

In line with the summit's objective of facilitating collaboration between policy, finance, and technology stakeholders, Dr. Addison highlights specialized forums such as the deal room and Pitchfest. These platforms provide opportunities for investors to engage with innovators in the presence of policymakers and regulators, fostering trust and accountability in funding allocation.

Dr. Addison also addresses the issue of affordability of cross-border transactions, emphasizing the need for interoperability of digital public infrastructure across the continent. He stresses the importance of regulatory and technical harmonization to facilitate seamless trade and financial transactions across African borders.