Financial Times: Africa “most exciting”; FT hosts inaugural investment summit

First-ever FT African Investment Summit to be held in London

In October, the Financial Times will be hosting a timely “FT-Live” London symposium on investment in Africa.  The Oct. 6th FT Africa Summit (agenda) is expected to draw a global audience from various industry sectors, limited to 150 attendees.

Whether or not the conference will spark a wave of M&A activity (and hence antitrust scrutiny) on the continent remains to be seen.  For now, the paper’s event PR proclaims optimistically:

The continent’s economic growth is the second fastest in the world, underpinned by a virtuous cycle of improved governance, Chinese-led investments in infrastructure, high commodities prices, and the growth of a nascent, even if fragile, middle class. Yet, risks abound, from rising inequality to the potential of setbacks in governance.

The inaugural FT Africa Summit will provide a global platform to hear and discuss the views of finance ministers, investors and businesses leaders from around the region. Altogether the first Summit and the special report will be a unique opportunity to gain insights into one of the world’s most exciting markets.

Today’s edition also reports, fittingly, that large-scale investors (such as Atlas Mara’s head and  former Barclays CEO Bob Diamond) are looking increasingly to the African continent for high-growth financial investment opportunities.  Diamond is reported to have raised $1/3 billion for his “African war chest” of Atlas Mara to invest in African bank acquisitions, and is said to plan another $400m round of fund-raising later this year.

Bob Diamond

As the FT points out, the growth potential for financial services in sub-Saharan Africa is theoretically immense, as the majority of the region’s 1-billion-plus population does not yet have bank accounts.  However — and the FT omits this crucial fact — as we reported elsewhere, the dearth of access to brick-and-mortar banks in Africa has led to the pioneering use of GSM mobile technology, such as M-Pesa, for retail financial transactions at a record-setting adoption rate in Africa; see our M-Pesa reporting and other stories.

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More or less competition in African mobile payments sector?

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More countries may enter the mix of players – but at the platform level, competition may have stagnated

As we reported last month, the mobile payments sector is going gangbusters on the African continent.  Kenya is ahead of the game, but other countries are closing in.

Kenya itself is considered by many to be at the forefront of the African mobile-payments universe, with its M-Pesa mobile-currency system often touted as the most developed mobile-payment system in the world.  The Economist asked rhetorically: “Why does Kenya lead the world in mobile money?”, pointing out that roughly 25% of Kenya’s GDP flows through the mobile service, with over 17 million users in Kenya alone.  The WorldBank has commented that “Mobile payments go viral [with] M-PESA in Kenya.”

Earlier this week, South African media outlet Business Tech published an interesting comparative piece on the issue, entitled “Africa leads in mobile banking“.  The article shows (also graphically, see below) how  and South Africa are close rivals to the Kenyan leadership in the mobile payments industry:

Image credit: Business Tech

What triggered the article is the release of the MEF-Africa report on mobile payments on the continent, which provides much of the content of the Business Tech piece.

One of the key developments highlighted is that M-Pesa’s platform may soon see a major upgrade in South Africa (where it is run by Vocadom and Nedbank), according to the article, linking the system directly with the brick-and-mortar banks’ platforms.  This may either (1) cement the relative market dominance of M-Pesa or (2) spur further innovation and enhance the overall competitiveness of the still rather young industry.