E-Financial
Africa’s Payment Space Absorbs COVID – 19 Impact, Returns to Growth
Globally, as well as in Africa, the payments industry suffered a much-smaller-than-anticipated impact from the COVID-19 crisis and has returned to growth with renewed momentum, according to a new report, titled Global Payments 2021: All In for Growth, by Boston Consulting Group (BCG).
This 19th annual analysis by BCG of the global payments industry reports that the sector responded quickly to challenges posed by the pandemic, from e-commerce adoption to accelerating cash-to-noncash conversion.
Global payments revenues declined by only 2.5% from 2019 to 2020, to US$1.5-trillion, and they could reach US$2.9-trillion by 2030.
BCG’s five-year outlook suggests that global payments revenues will expand by a healthy 7.3% from 2020 to 2025. All regions are likely to see strong growth over the next five years, with the Middle East and Africa expected to enjoy a compound annual growth rate (CAGR) of 6.9% from 2020 to 2025. This follows closely behind the global leader, Asia-Pacific, which is expected to have a CAGR of 8.8%.
“This growth forecast makes the Middle East and Africa one of the world’s strongest frontiers for payments. This is a huge region, however, with very different market characteristics from one sub-region to another – and despite challenges around less developed banking infrastructure in Sub-Saharan Africa as a whole, we believe that Africa is poised to see significant payments growth,” says Tijsbert Creemers, Managing Director and Partner at Boston Consulting Group, and co-author of the report.
In Africa, this growth has been and will continue to be augmented by high mobile penetration driving digital ecosystems and platform solutions.
Like payments front-runners China and India, the continent’s explosive digital payments evolution will be driven by local dynamics that include strong consumer interest in using mobile money and low card and banking penetration, BCG states.
The business strategy and tech solutions consultancy says South Africa is a mature market in terms of payments infrastructure. Most major banks in the country have enabled digital wallets such as Apple Pay and Samsung Pay, and the country’s retail real-time payments system is expected to launch in 2022.
In countries like Kenya, Ghana, Uganda, and Côte d’Ivoire, mobile wallets and money have already largely displaced cash – which is costly and dangerous to carry – and opened access to financial services products, driving financial inclusion in a region where this has traditionally been a challenge.
“With the right strategies in place and ongoing investment in creating a rich customer experience that meets customer needs, mobile payments players in Africa should continue to see strong growth in this highly competitive space,” says Creemers.
These opportunities extend to ecosystems, which have expanded rapidly in the past few years, too, with payments players capturing as much as two-thirds of the region’s Fintech funding in 2019.
Both banks and Fintechs across Africa have consistently continued to innovate to address challenges in critical sectors such as agriculture, education, and healthcare, as well as in driving financial inclusion across the continent – and, in line with global trends, after years of strong growth, Fintechs are entering a stage of more mature development.
“There is plenty of movement in this high-value area, in terms of innovation and in terms of industry consolidation and M&A, as banks increasingly acquire Fintechs and start-ups to achieve greater scale and improve risk modelling capabilities to accommodate growth in payments and finance products,” says Creemers.
Banks and networks across the continent have shown they are not standing idle in the face of rapid innovation and competition from mobile network operators and Fintechs – they are re-engaging in payments as a strategic play to acquire data and create rich interactions with customers.
In addition to deal-making through M&A, consolidation and merchant acquiring, they are modernising their payments technology and leveraging their geographical footprint to introduce innovative payments services.
They are also increasingly using insights from payment data and transactional behaviour to provide a rich customer experience and to add value by offering personalised services and solutions that are built around customer behaviour.
These advances are accompanied by emerging trends around faster adoption of digital currency activity, and focusing on regulations around payments.
“Globally, the intensity around digital currencies is growing, and although it isn’t a major trend in South Africa or the rest of Africa yet, it is going to require scale in the next five to 10 years when it becomes more mainstream, and banks will need to have a digital currency strategy incorporating risk mitigation in place,” says Creemers.
Likewise, banks and payments players will need to focus on evolving regulations, and finding the balance between speeding up payments innovation by removing unnecessary red tape and maintaining the integrity of payments through sound regulatory frameworks.
“As it stands, the payments ecosystem is thriving in South Africa and across Africa, and the opportunity to increase adoption of digital payments across the continent could allow Africa to leapfrog more mature markets, where cards remain the primary instrument for some time.
“This will require a clear strategy around where to invest to capture future valuables that deliver innovation, growth, customer value and financial inclusion,” says Creemers.
World Bank has said that it has given approval of $300 million to fund a new project aimed at bolstering access to services and economic opportunities for internally displaced persons (IDPs) and their host communities in northern Nigeria.
In a release, the World Bank said the Solutions for the Internally Displaced and Host Communities Project (SOLID) was approved on August 7.
It stated that the project will adopt an integrated development strategy to help displaced persons and host communities transition from humanitarian aid to self-reliance and resilience.
It also said the ongoing conflict and insecurity in the region have displaced more than 3.5 million people, straining infrastructure and deepening competition for scarce resources in affected communities.
The bank said SOLID will build on previous government and partner interventions, including the multi-sectoral crisis recovery project (MCRP), which focused on emergency recovery.
“Key areas of focus include building climate-resilient infrastructure, promoting social cohesion, supporting livelihoods, and strengthening institutions to better respond to the pressures of forced displacement.
“We are glad to support this initiative which has a tremendous potential to help Nigeria in addressing development challenges associated with protracted displacement in a sustainable way,” Mathew Verghis, World Bank country director for Nigeria, said.
“The Project’s integrated approach which is aligned with the National IDP Policy and the FGN’s long-term development vision will ensure that IDPs and host communities can transition from dependency on humanitarian assistance to self-reliance and resilience which will open up better economic opportunities,” it added.
The World Bank, which noted that the cproject is expected to benefit up to 7.4 million people, of whom up to 1.3 million individuals are identified as IDPs, added that the project will be implemented through a coordinated, community-driven approach involving all tiers of government, with strong partnerships from international stakeholders.
United Bank for Africa (UBA), Plc, Africa’s Global Bank, has launched its revamped Group website to enhance users’ digital experience.
The newly revamped website boasts of a faster, smarter, and more dynamic digital platform, designed to deliver live news updates, real-time Nigerian stock prices, and a world-class user experience among other world-class features.
The upgrade marks a significant leap in the bank’s digital transformation journey, setting new standards for speed, accessibility, and innovation in the African banking industry.
Alero Ladipo, group head, Marketing and Corporate Communication, UBA, who spoke excitedly about the revamped website, explained that the redesign focuses on simplifying user-journey, improving responsiveness across all devices, and incorporating a language-agnostic interface that caters to the bank’s diverse global audience.
She explained that with its sleek, intuitive layout and enhanced navigation, the site empowers customers, investors, and stakeholders to access critical information instantly – whether it is the latest market movements, breaking financial news, or UBA’s wide range of products and services.
Ms Ladipo said, “We are thrilled to unveil our new website, which represents a significant milestone in our digital transformation journey. Our goal is to provide a world-class digital experience that meets the evolving needs of our customers and stakeholders.”
Continuing, she added, “A major highlight of the upgrade is its speed, powered by an upgraded server infrastructure with enhanced load balancing to ensure minimal downtime and lightning-fast performance. By combining speed, accessibility, and live market intelligence, our new platform strengthens our position as an industry leader.”
She pointed out that the site also integrates automated news updates powered by International agency, Bloomberg and real-time stock prices tracking, ensuring visitors remain informed at all times.
Throwing more light on the new features, Amanda Oguamanam, head, Digital and Online Marketing, UBA, said; “We have transformed our website to be faster, cleaner, and more engaging, removing clutter by over 60%, upgrading servers for speed and reliability, streamlining navigation, and tailoring content to inspire global partners while making it easier for customers to find what they need.”
Other standout features, she added, include improved accessibility for users with disabilities, dark/light mode toggle, advanced search functions, and a simplified content structure, which are all designed to deliver an inclusive, modern experience for a global audience.
The revamped website is live and accessible at www.ubagroup.com.
United Bank for Africa is one of the largest employers in the financial sector on the African continent, with 25,000 employees group wide and serving over 45 million customers globally.
Operating in twenty African countries and the United Kingdom, the United States of America, France and the United Arab Emirates, UBA provides retail, commercial and institutional banking services, leading financial inclusion and implementing cutting-edge technology.
Nigeria’s Value Added Tax (VAT) revenue surged to ₦6.72 trillion in 2024, marking an 84.6% increase from ₦3.64 trillion in 2023, according to the National Bureau of Statistics (NBS). This sharp rise reflects stronger economic activity and improved tax collection efforts across key sectors.
VAT revenue showed consistent growth throughout the year. In Q1 2024, collections stood at ₦1.43 trillion. This rose to ₦1.56 trillion in Q2, representing a 9.09% increase. Q3 recorded ₦1.78 trillion, up 14% from the previous quarter, while Q4 peaked at ₦1.95 trillion, a 9.5% rise from Q3.
In Q4 alone, VAT collections totaled ₦1.95 trillion, with domestic VAT payments contributing ₦917.40 billion, non-import foreign VAT at ₦554.68 billion, and import VAT at ₦474.75 billion. Domestic VAT remained the largest source, indicating strong local business activity and consumer spending.
Several sectors posted significant quarter-on-quarter growth in Q4. Extraterritorial organisations and bodies saw a dramatic rise of 180.05%, followed by agriculture, forestry and fishing at 70.83%, and human health and social work at 46.13%. These gains suggest increased operational scope, improved compliance, and possibly targeted government incentives.
However, not all sectors fared well. Households as employers and self-use production contracted by 28.97%, while the information and communication sector declined by 23%. The drop in ICT may reflect shifting market dynamics or regulatory headwinds affecting digital services.
Overall, the surge in VAT revenue signals a positive fiscal outlook for Nigeria, with implications for budgetary planning, infrastructure investment, and social services funding. It also highlights the importance of sector-specific monitoring to sustain momentum and address emerging challenges.
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