Africa crying out for inclusive business

The Fourth Industrial Revolution (4IR) and digitalisation are here with us. The question everyone is asking is: will Africa be left behind again. But as these discussions are ongoing, one thing that seems to be coming up is the importance of financial inclusion.

Therefore, when I had the privilege to address the 7th FSD Kenya Annual Lecture on inclusive finance last week, the title of my presentation was Digitalization and Emerging Models of Economic Development: The Role of FinTechs.

In my view, despite the three industrial revolutions, Africa has yet to meet the world as an equal power. But we now can integrate the emerging 4IR into the heart of Africa and, in so doing, we will potentially avoid past digressions.

First, a little background. At the dawn of the first industrial revolution, Africa was dealing with slavery. Towards the end of 19th century and as the Second Industrial Revolution was starting, the continent was in the thick of colonialism. And when the Third Industrial revolution emerged in mid-20th century, Africa was at war with the colonists. Then the Cold War started to further distract the continent from the path of development.

But in the early 21st century, we witnessed intense investments in the information and communication technologies (ICTs) in Africa. These investments gave rise to innovation especially in FinTechs.

The prevalence of FinTechs has been pronounced on the continent to such an extent that, as the International Monetary Fund noted, “sub-Saharan Africa has become the global leader in mobile money transfer services, spurring widespread access to financial services”.

As the world wakes up to the 4IR there is no doubt that Africa could take advantage of growing talent, increasing urbanisation, continued infrastructure development and regulatory regimes that embrace innovation. Africa is indeed at a tipping point.

But Africa must step onto the world stage together, and anchor these innovative technologies to support a solid path of economic development and sustainability.

The continent must not forget the fact that the development agenda in post-independence Africa was marred by Cold War digressions (failed leadership because of external interferences, coups and counter-coups precipitated by contending powers).

Then globalisation came. Its ugly face of capitalism exacerbated inequalities not just in the developing world but began to decimate the middle class in the developed world.

Once more we face the risk of another digression — the emerging tensions between the US and China. The geopolitics could hold back Africa if we are not careful. We need technology to change business models that will improve the livelihoods of our people.

Early this week, precisely on October 4, I read an article by Jacqueline Novogratz published in Foreign Affairs. The title of the article was “The Trouble With Business School: M.B.A. Programs Should Teach Sustainable Capitalism.”

She argues that inequality is rising, democracy is in jeopardy, catastrophic climate change is looming, and the Covid-19 pandemic has uncovered vast disparities in healthcare and food security.

The demand for moral visionary leadership has never been greater. However, business schools, which are responsible for producing many of the next generation of executives, are falling behind.

Further, she says, building truly inclusive businesses—and consequently enterprises that can reduce inequality—requires guaranteeing that all actors in the value chain can survive and prosper.

Most multinational corporations' supply chains place the most risk on people who can least afford to lose money, while rewarding well-protected asset holders almost entirely.

FinTechs have leveraged emerging technologies like artificial intelligence to drive new business models and greater financial and economic inclusivity and in the process shifting workers from lower to higher productivity.