Our Correspondent | Africa Guardian
Financial inclusion is increasingly recognized as a key catalyst for digital transformation, not just in Africa but globally. By enabling access to various financial services, it has the potential to improve lives and communities, fostering economic growth. This is particularly crucial for countries in Central Africa, where financial inclusion remains limited but could significantly impact the broader digital transformation agenda.
The Central Africa Economic and Monetary Community (CEMAC), comprising Cameroon, the Central African Republic, Chad, Republic of Congo, Equatorial Guinea, and Gabon, serves over 60 million people. These countries have ambitious goals for financial inclusion, aiming for 75% by 2030. This initiative, spearheaded by the Bank of Central African States (BEAC), plans to establish one million cash payment points across the region by 2028, with a mid-term target of 350,000 by 2027. However, the region faces considerable challenges, including economic inequalities, that threaten the realization of these goals.
Experts like Dr. Joseph Atick, Executive Chairman of ID4Africa, and tech consultant Ayuk Etta believe that the key to overcoming these hurdles lies in the region’s ability to lay the foundation for stronger financial inclusion through digital identity, infrastructure, and policies.
Financial Inclusion and Its Current Barriers
Despite the region’s economic potential, CEMAC remains one of the least developed and technologically advanced areas in Africa. A large portion of the population is either unbanked or underbanked, which limits both economic development and freedom, particularly for vulnerable groups such as women and low-income adults.
According to the World Bank’s Global Findex Database, the percentage of unbanked adults in CEMAC countries is lower than the global average, yet it still remains alarmingly high. For example, in the Republic of Congo, only 18% of adults had a formal banking relationship as of 2021, and in the Central African Republic, fewer than 15% of people have access to a bank account.
The region’s overall financial inclusion rate stood at just 32% in 2021, according to BEAC. This signals the need for innovative technological solutions, as well as appropriate digital infrastructure and policies, to close the gap and improve accessibility to financial services.
Digital Identity: The Foundation for Financial Inclusion
The primary challenge hindering financial inclusion in CEMAC is the lack of digital public infrastructure, such as national identity systems, which are vital for securely accessing financial services. Dr. Atick emphasizes that establishing a reliable digital identity system is essential for combating fraud, money laundering, and ensuring the security of the financial ecosystem. He insists that digital identity is a pillar on which financial inclusion must be built.
“The very first thing is getting people into the national population registers,” Atick explains. “Without this, there is no way to include people in the financial system. Identity is a prerequisite for financial services.”
Currently, only Gabon is rolling out a national digital ID system, making it the exception rather than the rule in the CEMAC region. Etta concurs that robust digital infrastructure is critical and calls for building interoperable platforms and policies that ensure broader financial inclusion.
Infrastructure and Policy: Keys to Success
Etta and Atick agree that the right infrastructure and policies are crucial for driving financial inclusion. Beyond digital identity, the region needs a broader technological ecosystem, such as mobile payment systems and interoperable platforms, to ensure seamless access to financial services.
Etta highlights the importance of government policies that enable innovation, particularly through regulatory frameworks that support fintech growth. He points out that Cameroon’s creation of the Cameroon Fintech Association, a collaborative effort among local fintech companies, is a promising step in building a strong fintech ecosystem that can contribute to financial inclusion.
The Role of Fintech, Mobile Money, and Innovation
Fintech startups and mobile money services are increasingly integral to financial inclusion in CEMAC. However, the region still faces limitations, such as a lack of universal interoperability. While the instant payment system GIMACPAY exists, it remains constrained by its reliance on bank accounts.
Despite these challenges, mobile money continues to be a lifeline for many people in the region. BEAC reports that over 96% of transactions in CEMAC were conducted through mobile money in 2022. However, Atick suggests that mobile money alone is insufficient to create a fully inclusive financial ecosystem and stresses the need for a system that connects mobile money services to traditional bank accounts.
Innovation, according to Etta, is key to unlocking the region’s financial potential. He advocates for harnessing emerging technologies, such as generative AI, which could drive efficiencies and accelerate progress in areas like digital identity and financial services.
A Path Forward: Policy, Motivation, and Awareness
Both Atick and Etta agree that the path to financial inclusion in Central Africa lies not in technical barriers, but in policy, motivation, and awareness. Atick stresses that while the technical infrastructure needed for financial inclusion is already known, policies need to evolve quickly to keep pace with technological advancements.
Governments must remain proactive and adopt policies that are responsive to the rapid development of new technologies. By creating an enabling environment for innovation and fostering collaboration between governments, fintechs, and other stakeholders, the region can make significant strides in achieving greater financial inclusion.
Etta concludes that Central Africa’s youth, who are well-placed to drive technological innovation, will be instrumental in shaping the future of financial inclusion. With the right policies, infrastructure, and motivation, the region has the potential to overcome its challenges and establish a sustainable, inclusive digital economy.
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