Investment in Africa – Nigeria and Ghana

Deep diving follows on from our article on global investment, above, fintech dominates Nigeria’s startup space. Not only does it have the most unicorns (companies with up to $1bn valuations), it has also received the most interest from investors. To know Nigeria’s biggest fintech companies, you need to know what makes a big business. Factors such as sales volumes, annual turnover, and the number of employees are the easiest ways to determine company size. By valuation, MTN’s MoMo is the biggest fintech in Nigeria, as the company is estimated at $6 billion. But going by customer base alone, Paga is the largest mobile payments firm in Nigeria with 17m users. In 2020, the country attracted $305m in startup funding, according to Partech Africa. Fintech deals represented around 44% of startup investment activities. According to a report by Frost and Sullivan, the fintech space is expected to grow by over $543.3m in 2022. Fintechs also account for 95.95% of this year’s fundraising announcements, with Opay (but see below), Flutterwave, and Kuda leading the pack.

As is true in other countries, Ghana’s fintech ecosystem is a complex and dynamic environment with interdependencies between various actors. Regulators such as the Bank of Ghana provide policy and regulatory direction for the financial sector. Traditional financial institutions such as commercial banks offer financial services through digital and physical branches. They are also the custodians of electronic funds transacted on fintech innovations. Telecommunications companies also play a critical role. They use their mobile network platforms to offer digital financial services, popularly referred to as mobile money. For their part, fintech firms develop digital financial services. In Ghana, there are over 30 unique fintech services. Then there are the agents – small enterprises, acting as “shadow bank branches” or “cash-in, cash-out” points – providing support for digital financial services. And, of course, the users that use fintech innovations for financial transactions such as money transfer, securing micro-loans, and paying bills.