Egypt and Nigeria unite on fintech

The Central Bank of Nigeria and the Central Bank of Egypt have recently joined hands by signing a Memorandum of Understanding (MOU) to establish a “Nigeria-Egypt Fintech Bridge,” aiming to foster collaboration between two of the largest economies in Africa.

While the specific details of this partnership are yet to be disclosed, it is expected to encompass various aspects, including joint regulatory initiatives, coordinated licensing and legal frameworks, information and data exchange, fintech cross-referrals, and talent development.

Rume Ophi, a fintech and blockchain analyst based in Lagos, believes that collaboration between various government agencies will significantly contribute to driving financial inclusion in both Nigeria and Egypt.

The aspiration for increased inter-African cooperation in the fintech industry is gaining traction among fintech leaders. Dare Okoudjou, CEO of pan-African payments company MFS Africa, emphasized the need for integrating fintech markets across African countries to unleash the region’s full economic potential. This highlights the importance of removing legal and regulatory barriers through passporting solutions to allow entrepreneurs access to a broader market.

The primary focus of this collaboration, as stated by Aishah Ahmed, the deputy governor for financial system stability at the Nigerian Central Bank, is to enhance financial inclusion. By leveraging fintech solutions through mutual cooperation, the two countries aspire to extend formal financial services to a larger number of their citizens. Presently, both Abuja and Cairo grapple with considerable unbanked populations, with approximately 40% of Nigerians and a staggering 75% of Egyptians lacking access to banking services. Cash continues to be the dominant mode of transaction in both economies, with over two-thirds of Egyptians exclusively using cash for purchases and transfers.

The Nigeria-Egypt Fintech Bridge represents a noteworthy step in the right direction toward achieving this ambition. This initiative is expected to unlock significant cross-border collaboration, enabling entrepreneurs from both countries to develop more sophisticated fintech services and products, ultimately fostering broader economic growth.

Rume Ophi is optimistic that the MOU will not only attract foreign direct investment and innovation but also aid in the growth of both countries’ economies. Nevertheless, he emphasizes that further actions to advance the fintech market in Nigeria would be necessary to fully harness the potential benefits of the collaboration.