Energy connectivity, cooperation key to Africa's financial inclusion, experts say

The surge in digital financial tools in Africa through mobile phone connectivity has broadened financial access but is hindered by lack of access to affordable clean energy, experts who had gathered in Kenya's capital Nairobi said on Wednesday, adding that China-Africa cooperation can help bridge the continent's access-to-energy gap.

Speaking during the China-Africa Digital Financial Inclusion Summit 2024, Bei Duoguang, president of the Chinese Academy of Financial Inclusion at Renmin University of China, said the focus in Africa should be covering the last mile in energy connectivity in order to bring people in far-flung areas into the financial systems.

Bei cited the example of Kenya's M-Pesa virtual banking system, which is supported by the Huawei Mobile Money Platform as an innovative way, through which Africa uses digital technology to handle financial services. However, people in areas with no electricity find it difficult to use such solutions because simple tasks like charging a phone are a challenge.

According to the International Energy Agency, 600 million people in Africa lack power supply, Bei said. "However, Africa has a huge potential in renewable energy like solar, which can help connect farmers and businesses to reliable energy," he said.

Reflecting on the upcoming Forum on China-Africa Cooperation, or FOCAC, summit to be held in Beijing next month, Christine Mwangi, regional coordinator for NGO World Wide Fund for Nature in Africa, said the pledge to increase trade between China and Africa can be met through agriculture.

Challenge remains

Mwangi commended the cooperation between Africa and China in areas such as value addition promotion and manufacturing. However, the need for clean and affordable energy to help farmers in processes such as value addition or sustainable manufacturing remains a challenge.

She urged policymakers in Africa and China to establish funds through avenues like the FOCAC for providing energy access in agriculture and manufacturing since sustainable agriculture is the best way to conserve environment and ensure biodiversity.

Ji Min, director of the Counselor Office at the People's Bank of China, said they are working toward green investments, especially in businesses involved in renewable energy like wind and solar energy for small and medium-sized enterprises in rural areas.

Ji lauded Egypt for using this path to successfully issue a three-year Sustainability Panda Bond worth $478.7 million last year. It is the first country in the Middle East and Africa to issue such bonds in the Chinese financial market, underscoring China and Egypt's commitment to driving sustainable development, Ji said.

The daylong summit brought together more than 100 participants. They included professionals from the banking and financial sector, government officials as well as experts from development and trade institutions in China and Africa.