The Central Bank of Nigeria (CBN) and the Central Bank of Egypt (CBE) recently forged a groundbreaking alliance to establish a Nigeria-Egypt FinTech Bridge. This intercontinental partnership aims to address the financial inclusion challenges faced by these two prominent African economies.
The Collaboration at a Glance
The CBN and the CBE, following a series of deliberations on issues around payment systems, financial technology, and financial inclusion in Africa, have signed a Memorandum of Understanding (MoU). This agreement, according to CBN Deputy Governor for Financial System Stability, Mrs. Aishah Ahmad, will cultivate an innovative space for fintech startups and entrepreneurs in both Egypt and Nigeria. The ultimate goal is to accelerate financial inclusion, deepen payment systems, and drive economic growth across the African continent.
This partnership, which followed several months of engagement, encompasses a broad range of collaborative initiatives. These include:
- Joint regulatory innovation projects
- Coordinated licensing and supervisory frameworks
- Information Sharing
- Fintech cross referrals
- Talent development
The agreement holds substantial potential to enhance the fintech capabilities of both nations and establish a transformative bridge between the two largest economies in Africa.
The Unbanked Masses and the Fintech Solution
Both Nigeria and Egypt have significant unbanked populations. About 40% of the Nigerian population and up to 75% of Egyptians do not have a bank account. The heavy reliance on cash transactions in these economies highlights the urgency of financial inclusion efforts. This agreement is an innovative step toward addressing these challenges.
According to Rume Ophi, a fintech and blockchain analyst based in Lagos, “Collaboration between the various government agencies will help drive financial inclusion in Nigeria and Egypt.” He believes the MoU could unlock significant amounts of cross-border collaboration and help entrepreneurs in both countries devise more sophisticated fintech services and products.
A Step Towards Inter-African Cooperation
The establishment of the Nigeria-Egypt FinTech Bridge is a remarkable stride in the right direction. More fintech leaders are now advocating for greater inter-African cooperation to propel the industry forward. Dare Okoudjou, CEO of pan-African payments company MFS Africa, has stressed the need to integrate African fintech markets to fully unlock their economic potential.
Nigeria’s Open Banking Initiative
Simultaneously, the Central Bank of Nigeria has approved the operational guidelines for Open Banking in Nigeria. This move ushers in a new era for the country’s banking industry and could be a transformative time for financial innovation and inclusion in Nigeria and Africa as a whole. This initiative was a result of the tireless efforts of industry veterans, banks, fintech, and other stakeholders who formed the Open Banking Nigeria group in 2017. Their goal was to accelerate payment innovation across the nation.
Both these developments indicate a strong commitment to advancing the financial inclusion landscape of the region. They are also a testament to the ongoing efforts to integrate and harmonize Africa’s fintech sector, signaling a robust future for the industry.
For more information about Open Banking, visit the official Open Banking Nigeria website.
Looking Forward: The Fintech Landscape of Egypt
Alongside the CBN, the Central Bank of Egypt has also signed a MoU with the London Institute of Banking and Finance (LIBF). This agreement focuses on providing specialized training courses, workshops, and programs tailored for Egypt’s fintech sector executives.
The partnership with the LIBF aims to empower Egyptian fintech professionals, fostering an environment of innovation and growth within the sector. This strategic alliance is part of Egypt’s broader effort to assert its place as a dynamic player in the global fintech industry.
The Economic Impact
These MoUs are expected to pave the way for transformative developments in Egypt’s fintech landscape and bolster its position as a regional fintech powerhouse. Furthermore, the Nigeria-Egypt Fintech Bridge could facilitate significant amounts of cross-border collaboration and drive wider economic growth across the continent.
Ophi concluded, “The MoU will allow Nigeria and Egypt to attract innovations and foreign direct investment, which in turn will help grow the economies of both countries.”