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US Invests in Africa's Fintech Sector

FILE - A man performs a financial transaction at Orange, a French mobile operator based in Abijan, Ivory Coast, September 18, 2020

WASHINGTON — African entrepreneurs specializing in financial technology are applauding the U.S. government for its investments in innovators from the continent who are using their products and skills to boost their local economies.

U.S. officials this week spent two days interacting with African innovators and reputable bankers, during the ninth edition of the Africa Fintech Summit, discussing means of boosting Africa's financial technology sector.

Ramin Toloui, the assistant secretary for the Bureau of Economic and Business Affairs at the U.S. Department of State said Washington is looking to use its Digital Transformation in Africa Initiative (DTAI), launched in December 2022 at the U.S.-Africa Leaders Summit, to boost digital economies.

The DTAI is focused on increasing continental transactions online, that allow people to buy and sell on digital platforms.

"We’ve learned around the world that digital connectivity unleashes extraordinary economic potential, not just for big companies but for small farmers and small businesses," Toloui said.

Through the initiative Toloui said, the U.S. seeks to partner with African countries, private sector and small businesses to "expand connectivity in Africa and expand the use of digital tools to unleash this economic potential."

Toloui said Washington's investments are addressing a range of challenges in Africa.

"Africa has historically had problems with food insecurity and continues to have the need for economic development and so the U.S. wants to be a partner in unlocking some of that potential to raise living standards, to provide more economic opportunity, to strengthen food security and the digital transformation could be a part of realizing all of these objectives," he said.

Archit Bagaria, the head of investments at OmniBiz Africa, a Nigerian tech startup, said the strengthening of ties between the U.S. and Africa is paving way to continuous growth of the Fintech sector.

"Bringing the technological understanding that the United States has created over the past few years to Africa is where I would say the core investment thesis lies," Bagaria said.

Bagaria adds that capital invested in Africa by U.S.' private and public sectors is fueling innovation in Africa.

Benjamin Fernandes, the co-founder and CEO of Tanzania-based NALA, one of the continent’s leading Fintech companies focused on international money trade, said African leaders are embracing financial technology because it is a cash cow for the continent.

"When central banks see money coming in and the movement of money, there is interest like okay cool, how can this benefit our economy and how do we use global Fintech to increase global trade with our economies," Fernandes said.

"(African) countries are trying to increase global trade because that’s a source of revenue for them and like increase the quality of living, increase health care, as well as better education. So, I think they are all tied together, and I think Fintech is the foundation for that," he added.

The Fintech Summit witnessed panel discussions that featured over 46 delegates, among them were African innovators, U.S. officials and representatives of reputable banking companies.