Accelerating the digitization of African economies

In an exclusive interview with CNBC Africa's David Alabi, Officer-in-Charge of the Bank of Namibia, Marissory Ickua, delved into the efforts being made to accelerate the digitization of African economies. The conversation revolved around the importance of transitioning from cash transactions to digital solutions to streamline trade facilitation and make transactions more efficient and cost-effective both locally and internationally. Ickua highlighted Namibia's significant progress towards financial inclusion, with 78% of the population now having access to formal financial services. However, the focus remains on reaching marginalized communities in rural areas through instant payment systems. These systems aim to make transactions more affordable and accessible to all corners of the country by ensuring interoperability among various e-money platforms. The interview also touched on the role of Central Bank Digital Currencies (CBDCs) and the need for collaboration among countries within the Common Monetary Area (CMA) to ensure the seamless functioning of these digital currencies across borders. While CBDCs are still a work in progress, Ickua emphasized that the immediate focus is on developing instant payment systems to enhance financial inclusivity and reduce transaction costs within Namibia. Moreover, the Bank of Namibia is keen on promoting knowledge sharing and capacity building in the digital finance space. The institution plans to publish information on instant payments in the first half of the upcoming year, aiming to engage stakeholders such as payment service providers, fintech companies, and utility providers to ensure a successful rollout of the instant payment platform. The projected timeline for the platform's launch is set for late 2025, with subsequent phases planned to onboard more stakeholders and expand access to the system. Looking ahead to 2025, Ickua expressed optimism for the outlook of trade finance in Africa, citing initiatives such as the Bank of International Settlements' Project Nexus as potential game-changers in the instant payment landscape. The goal is to create interconnected systems that facilitate seamless trade and financial transactions across the continent, ultimately driving economic growth and fostering increased collaboration among African nations. As the interview concluded, it was evident that the push for digitization and instant payments is set to transform African economies, paving the way for greater financial inclusion, trade facilitation, and economic prosperity in the region.