Last week, Ephraim Modise published a feature article in TechCabal titled, Why Zambia is prepping to become Africa’s next major tech hub. Ephraim did an outstanding job with this timely ecosystem overview but I wanted to take this a step further and tell the story behind a few of the factors why AFTS, the largest bi-annual ‘fintech in Africa’ summit, chose Zambia’s capital (Lusaka) as the host of this November’s 10th edition.
Zambia may not sit at the top of the African tech headlines each week, but the local startup ecosystem activity, investment action, and regulatory momentum have primed the country that sits at the crossroads of Southern, Eastern, and Central Africa for rapid fintech growth further supporting sustainable development and inclusive economic growth.
Several major advancements were made in Zambia last year by fintechs like Cellulant, who announced various partnerships with the Lusaka Chamber of Commerce, several major water utility companies, and Zanaco Bank – Zambia’s largest & most profitable local bank. Ghana’s Zeepay, a multinational remittance fintech startup, was granted approval by the Central Bank of Zambia earlier this year to begin operations in the country. There are many more examples of multinational fintechs expanding operations in Zambia to also add to this list: Power Financial, Vesicash, and VALR, just to name a few.
Later this month, Zambia is expected to conclude its tests on cryptocurrency usage and build a framework that balances innovation with consumer protection. These tests have been a collaboration between the Ministry of Technology & Science, the Bank of Zambia, and the Security Exchange Commission. Earlier this year, Ethereum’s co-founder, Vitalik Buterin, visited Zambia for the second time where he met with executives and government officials about boosting crypto development and adoption.
Zambian fintechs such as PremierCredit, Lupiya, Zoona, Zazu, Union54, and Digital PayGo have been making strides forward and have caught the eyes of international investors and other fintechs alike. At AFTSCapeTown last November, Zambia’s PrimeNet was a participant in the 5th AlphaExpo Micro-Accelerator program which saw a high-level of interest from investors and other stakeholders alike. Fintech however has not been the only technology sector to witness continual growth in Zambia.
Just a few weeks ago, Wasoko, the B2B eCommerce startup that started operations in Kenya back in 2014, announced that it was investing over $1M USD to expand its operations into Southern Africa, choosing Lusaka, Zambia as its central hub for the region. Wasoko’s Founder & Global CEO stated in a press release regarding the expansion into Zambia, “With high smartphone usage and a pro-business government administration keen on expanding the country’s digital economy, Zambia is an ideal environment to launch our model and strongly aligns with our current core markets, both in terms of similar regulatory practices and a supplier base that is intertwined with East Africa.”
About a month ago, Liquid Intelligent Technologies announced the signing of an MoU to launch a new data center in Zambia. According to an article published by TechCabal, “The data centre is intended to respond to increasing data-hosting needs from local businesses and hyperscalers establishing their presence in Zambia.” As the African data center market is expected to surpass $3B USD by 2025, Zambia is already positioning itself to reap the benefits of continued digital infrastructure development.
Digital transformation has been prioritized as a core pillar in Zambia’s national strategy. Between 2015 and 2020, mobile money penetration in Zambia has grown from 59.3% to 69.4%, according to Zambia Inclusive Digital Economy Status Report 2022 published by the Ministry of Technology & Science (MoTS) and the United Nations Capital Development Fund (UNCDF). In this same report, Zambia received a 53% overall Digital Inclusiveness Score, revealing substantial space for innovation and growth within Zambia for its near 20 million person population.
Beyond technology, Zambia’s current administration is working diligently to power inclusive economic growth, focus on meaningful digital transformation, build business-friendly regulation, and play a key role in the global energy transition.
Ensuring that growth is inclusive of all has been made a key priority in Zambia with UNDP and other organizations working closely with the government to better ensure gender equality, strengthen the national health system, and promote the sustainable resettlement of refugees.
One of the recent changes which has caught the attention of the global community has been Zambia’s focus on building a supportive regulatory environment. Zambia’s Technology Sector Working Group has been busy discussing business-friendly regulations with Ministries and ecosystem players on ways to help make Zambia, ‘the Estonia or Singapore of Africa.’ Zambia has long relied upon its Copper and Cobalt exports for a large portion of its GDP, but with the country’s renewed focus on innovation and entrepreneurship in other sectors, it is clear that the country is primed for an explosion in fintech.
Zambia is also taking big steps to increase innovation and investment into its natural resources. One of the first steps the government has taken is to bring consistency to the country’s mineral royalty regime. The government has begun clamping down on mines with improper environmental protections and is actively encouraging investment in the country’s resources. In December 2022, the Bill Gates and Jeff Bezos-backed KoBold Metals announced a $150M USD investment in Zambia’s Mingomba mine. The startup will leverage its innovative Artificial Intelligence (AI) technology to process drilling data and optimize the exploration process while minimizing adverse impacts on the environment.
In late-2020 amidst the COVID-19 pandemic, Zambia defaulted on its debts after becoming unable to service $30B USD in debt. Since the moment news broke about Zambia’s default, the country has worked diligently to restructure with creditors, highlighting a path forward and transitioning to more private sector investment for things such as energy infrastructure.
Zambia’s position as an emerging financial technology hub is further cemented by its selection as the host country for the 10th edition of the Africa Fintech Summit. With a supportive regulatory environment, strategic geographical placement, headquarters for COMESA (Common Market for Eastern and Southern Africa), and an array of other factors, Zambia is primed and ready to witness an explosion in fintech-powered business, innovation, and trade.
Our team is excited to be setting the stage today for the largest gathering of fintech operators, investors and regulators in Africa this year. We are working closely with both local and international partners including, Ministry of Technology & Science, Payments Association of Zambia, Bankers Association of Zambia, Flutterwave, PremierCredit, Corporate Council on Africa, Amazon Web Services and many others, to ensure that AFTSLusaka is not only a success, but yields impact and influence for many years to come.
See you in Lusaka!