Fintech Summit Sheds Light on Ethiopia Market Opportunity

December 2019

On November 21, 2019 over 400 fintechs, regulators, investors, and financial service executives from across 30 countries and 4 continents convened at the Sheraton Addis in Ethiopia for the 4th Africa Fintech Summit (AFTS). This is a significant milestone in Ethiopia as the country seeks to liberalize its telecommunications sector, improve the ease of making financial transactions, and transition to a digital economy. AFTS featured a wide range of fintech stakeholders, including Ethiopia’s Minister of Innovation of Technology, H.E. Dr.-Ing, Getahun Mekuria, who laid out his plan for “coming out of the woods of protectionism” and how Africa as a whole is committing “a trillion dollar mistake by not harnessing technology.”. The Vice Governor for the National Bank of Ethiopia, Eyob Gebre Eyesus, further emphasized the relevance of AFTS by indicating that “the role of fintechs is now to awaken the sleeping giant, that is, Ethiopia.” 

The diversity of companies and countries represented at AFTS Addis reflects the rising interest of global fintechs, banks, and investors in Ethiopia,  Africa’s second most populous nation and fastest growing economy. Ethiopian organizations led the pack, followed by the USA, Kenya, Nigeria, and the Democratic Republic of the Congo. In addition to Africa-focused fintechs like Apposit, Flutterwave, WorldRemit, and Zeepay, there was representation from numerous multinational organizations, including Microsoft, IBM, Citibank, Ecobank, KCB Group, and TDB. Although foreign participation in the Ethiopian economy has been highly limited to date, many of the international players represented at AFTS are establishing or growing their market presence in light of the current administration’s historic reform agenda, which includes liberalization of the financial services and telecommunications sectors. 

In total, AFTS  hosted ten panel sessions, four keynotes, an Alpha Expo for ten pre-Series A startups, a Flash Pitch Competition, and a reception hosted by USAID. Panelists represented all fintech stakeholder categories—from traditional banks and government to startup entrepreneurs—and covered relevant topics like policy and regulation, blockchain, and remittances. The USAID reception provided an opportunity for AFTS participants to learn more about potential investment opportunities in Ethiopia emerging under the context of the country’s new economic reform agenda. The Ethiopian Investment Commission also had a presence at AFTS Addis where they provided advice and insight on the country’s investment landscape. 

The U.S. Department of State’s Office of Global Partnerships, lead strategic partner of AFTS, organized a Partnership Opportunity Delegation (POD) the week of 18 November that included delegates from the USA and Japan. One objective of the POD was to generate interest and private sector investment in Ethiopia’s tech sector, a priority shared by Ethiopia’s Ministry of Innovation and Technology. Among several other activities, delegates participated in AFTS and P!TCH ETHIOP!A, a partner pitch event to the fintech summit and regional final for Pegasus Tech VenturesStartup World Cup.  Ethiopia-based AXIOM Financial won the pitch and will proceed on to compete for a $1M grand prize at the SWC global semi-finals in Silicon Valley in May 2020.  AXIOM Financial was also the recipient of the Flash Pitch Competition Award, organized by AFTS. 

A highlight of the summit was the announcement and formalization of a strategic partnership between Ethiopia’s Amole, the technology fueling Dashen Bank’s digital banking service, and Africa’s Talking, a pan-African technology provider. Attendees had the opportunity to see the potential applications of this partnership in a demo session, led by Anthony Kiplimo of Africa’s Talking, that highlighted how an integration with Amole’s payment services could facilitate payments through the Telegram messaging app, a first for Ethiopia. The ease and simplicity of building and monetizing digital services creates a new opportunity for entrepreneurs and enterprises to create powerful scalable solutions that cut across different sectors and geographical boundaries. This will improve the potential value creation in the country and provide job creation opportunities, a priority shared with Ethiopia’s Jobs Creation Commission whose commissioner, Dr. Ephrem T. Lemango,  was also a speaker at AFTS Addis. 

“Ethiopia is ready and wants to grow using new technology,” said Amole’s CEO Yemiru Chanyalew.  “We have read case studies that support this idea but access and monetization remains the set-back. By engaging in this partnership we become enablers and equalizers at the grassroots level, which will create new jobs and new business models through greater automation capability.” 

A primary objective of the Africa Fintech Summit series is to create a global platform that connects Africa’s fintech stakeholders in order to drive the growth of the fintech sector. The bi-annual summit is organized by Dedalus Global, an investment and communications advisory focusing on emerging markets and emerging technologies. The Ethiopian edition was co-organized by Ibex Frontier, an investment consultancy and route-to-Ethiopian-market advisory. The 5th summit will take place in Washington D.C. on April 16, 2020. 

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