The financial knowledge and capabilities in Africa are often misunderstood by many outside the continent
By Jay Mawji
While the International Monetary Fund acknowledges the damaging recession effects of Covid-19 in Africa the economic outlook for the continent remains optimistic, as the introduction of technologies brings with it accessibility and exposure to economic and personal finance possibilities.
The financial knowledge and capabilities in Africa are often misunderstood by many outside the continent. As future economic growth influences the earning potential of many people, the access to additional disposable income increases and so too does the desire to engage in financial trading possibilities, this means that Africa is quickly becoming an increasingly attractive region for online trading platforms.
This growth is underscored by the influx and access to technologies previously unavailable in many regions across the continent. The torrent of technological accessibility and associated tools offers both convenience and speed to the trading sector – something the conventional physical face-to-face exchange simply couldn’t provide. This is evident in the exponential growth of online traders, with recent figures indicating as many as 15-million global traders, with Africa comprising over 1,3-million finance savvy individuals across key markets.
Tainted by past malpractice, online trading is often viewed as a blueprint to ‘get rich quick’, with many flaunting their wealth across social media channels with the aim of duping those not accustomed to the industry. While this is not the case for all trading educators and brokers, it is advised that potential traders only deal with established and reputable trading platforms that adhere to the strict regulations imposed by national financial regulators.
The perception of online trading is quickly changing. This is attributed to more firms coming into the market and adhering to the financial regulations of the country within which they intend to launch, setting up infrastructure, investing in a region through the launch of offices and the subsequent creation of jobs, and commitment to operate with their client’s best interests at heart.
Trading regulations across Africa are attuned to those in Europe, following similar principles and prudential elements, such as the correct corporate governance and capital requirements. When brokerages adhere to the regulations in Africa, it indicates their commitment to fair practise, an appreciation for the countries within which they operate, and an understanding of the challenges that traders on the continent face.
While some may cite industry inefficiencies in the African market, those are part of the development process, and once ironed out and further developed, Africa will most certainly be home to several major financial regulators.
Even though regulations may conform to European standards, it is important for brokerages to remember the vast cultural and regional differences in how Africans do business. Each market is unique and has a variety of challenges, and as such, having an on-the-ground presence and local representation in each market is key to learning and adaptation.
On-the-ground representation in Africa provides a personal touch, a sense of trust and a commitment to the business landscape of the region, something that simply cannot be replicated over an online platform. Traders can rest assured knowing there is indeed a face behind the online trading platforms.
For any financial institution, Africa is the place to be, and by bridging the knowledge and accessibility gaps between bankers in major financial hubs and everyday people on their mobile devices, the potential for personal economic empowerment in Africa increases, with the region on the cusp of becoming a future economic powerhouse.