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How African Central Banks Are Trying To Monopolize Fintech

By John Keendjele
Published in Technology
April 24, 2022
2 min read
How African Central Banks Are Trying To Monopolize Fintech

Just as of last month, Zambia’s central bank announced its plans on launching their own central bank digital currency (CBDC). This is basically a government issued, as well as controlled way to make digital payments. While to the casuals this may be lauded as a monumental achievement, especially for central reserve banks, which are frustratingly known for being “old-school”, others feel differently.

Months before this announcement a plethora of other African nations such as Kenya, Nigeria, as well as Ghana also began rolling out their ambitious plans on creating a CBDC. The Nigerian central bank has thus far managed to launch its official CBDC which is now known as eNaira.

enaira notes

These plans and launches have shown how African governments are taking an increasingly hands-on role in the continents fintech revolution which has experienced a boom over the last few years. While central banks have been watching from the side-lines, we have witnessed the meteoric rise of major fintech companies such as Flutterwave, Paystack, as well as Namibia’s own PayToday go from garage ran start-ups all the way to being valued well into the billions.

Over the past 10 years, a venture capital-fuelled boom has created cash-flushed private sector powerhouses in all the continent’s major economies. Economic analysts estimate that $2.3 billion was invested in fintech start-ups in Africa in 2021, up from $130 million five years ago.


Seeing African Central Banks trying to dip their hands into the private fintech sector is something that I can’t help but question. Firstly, it’s important to note that within the last two decades of government driven financial technology, its more essential that the government rather focuses on creating the infrastructure that allows these private sector fintech start-ups to thrive.

Every time an African government has taken on too much by trying to control both the infrastructure as well as the companies, their efforts have always faltered. This has been the story of Ghana’s e-Zwich, Kanya’s Huduma Card, and Botswana’s Poso card. The main reason for these governmental failures is not the easiest to identify, however the common point made by researchers is that governments use these CBDC’s as a way to increase the states influence over consumer-facing payments.


Governments justify these projects by hiding behind the veil curtain of buzz phrases such as “financial inclusion”, and “tackling money laundering”, which all conveniently ignore that many of the financial issues faced were caused by these various government institutions in the first place. You simply can’t as a government body play both the player and the referee. Rather than trying to dip your hand in the private fintech sector, it would make more sense to focus on ensuring the adequate infrastructure and policies are put in place to strengthen the players in fintech.

With that said there is no reason why governments need to be directly involved in the retail and consumer payments space to meet their objectives. When governmental institutions have focused on creating the pathways for the private sector to scale up, rather than competing with the private sector, there has been a large amount of success.


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