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Finance - January 7, 2022

AfDB’s President Akinwumi Adesina Predicts 3 Sectors that will Shape Africa’s Economy in 2022

One of the sectors that will shape Africa's economies in 2022, according to Adesina, is financial technology.

The Africa Development Bank (ADB) President, Akinwunmi Adesina, has predicted three important sectors that would make or mar Africa’s economy in 2022. According to him, digital companies would remain the main drivers of the African economy.

Adesina made the statement during a recent session with BBC News Africa. He, however, pointed out that, with the COVID-19 still out, it is difficult to forecast the new year.

Financial technology

One of the sectors that will shape Africa’s economy in 2022, according to Adesina, is a financial technology (Fintech). To him, everything will go back to digital. He calls for investments in digital infrastructure, data centres, and content creators.

He said that despite the low Foreign Direct Investors (FDI) rate in Africa, young Africans are leading the fintech sector. Also, at the rate the world is going, countries will invest more in the digital economy and digitise their whole system.

Financial services are eschewing traditional infrastructure in many African markets, favouring mobile-centric solutions. Although 2020 ushered in the COVID-19 pandemic, it also serves as the year for digital rebirth in Africa and the rest of the world. For instance, in 2020, Rwanda experienced a 400% increase in mobile money payments.

Financial services providers (FSPs) took advantage of the 2020 opportunities in 2021. The industry worked out how to work and support consumers remotely in the most efficient way possible. Therefore, this sees the emergence of technologies in the financial sectors such as Central Banks Digital Currency (CBDC), open banking, embedded credit (BNPL), embedded financial services, inclusive digital financial services, etc.

Although Nigeria is currently the only African country with an open banking framework, 2022 promises otherwise. Other African countries, such as Kenya, Egypt, Ghana, Uganda, Tanzania, and others, will use the UK, Europe, and Nigeria’s experience to begin open banking efforts in 2022.

Healthcare

The ADB President also lists Healthcare as one of the sectors to watch. According to him, it took one virus for the African countries to wake up to the need to improve the healthcare sector. The advent of COVID-19 exposed lapses in the healthcare sector of many African countries, especially in Sub-Saharan Africa.

However, during the pandemic, there were shifts towards strengthening the healthcare sector, focusing on increasing funding for health infrastructure, improving health infrastructure, motivating health workers, and improving laboratory facilities.

Since strengthening health systems entails increasing financing for health infrastructure, health policies, and ensuring universal health coverage (UHC), Akinwunmi, in a statement, says there will be more investment in the healthcare sector, vaccine production, and pharmaceuticals.

Green Economy

A green economy attempts to reduce environmental dangers and ecological scarcities while pursuing long-term development that does not harm the environment. It is similar to ecological economics but with a more political application.

According to Akinwunmi, the green economy in Africa alone is almost about $8 million. Hence, Africa has to go into renewable energy. Also, a lot of investment will go into ensuring that there is affordable access to decentralised energy systems in Africa in 2022.

READ ALSO: African Development Bank’s SEFA provides $1 million to kick off modernization of Africa’s Hydropower Fleet

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