The Association of African Central Banks (AACB) set up the African Inter-Regional Payments Integration Task Force in 2020, and the Task Force established two working groups, the Payment Systems Integration Working Group, and the Mobile Integration Strategy Working Group. The World Bank supported the establishment of these bodies and is a development partner member of all three. Responses have been edited for style and clarity.
Interview with Tim Masela, Vice Chair, AACB African Inter-Regional Payments Integration Task Force
What is the current landscape for financial services in Africa and why is Digital Financial Inclusion (DFI) and integration important?
DFI is the ability of adults to access and use digital financial services. According to the Global Findex Database, account ownership in Sub-Saharan Africa (SSA) rose from 43 percent in 2017 to 55 percent in 2021, however, this is still substantially lower than the global average of 76 percent.
There has therefore been a recognition that DFI is lagging on the continent. Addressing this situation will stimulate economic activity and positively impact our development. Technology gives us an opportunity to broaden use of financial services, including payments, savings, lending, and insurance.
Broader integration initiatives could dismantle barriers and open service provision across borders in the most practical way. Thus, regulatory harmonisation and collaboration in rolling out infrastructure becomes key. In the payment landscape, interoperability and interlinking of infrastructures would go a long way in establishing a platform for financial transactions. Relating to savings, lending, and insurance, I believe that we have pan-African institutions that could leverage infrastructure and advances in innovation and technology to rollout products and services across regions and countries.
DFI is also important for (1) generating data that can be used for Informed Decision-Making, (2) reducing transaction costs, (3) government efficiency, (4) reducing financial exclusion and (5) improving monetary policy implementation, etc.