Interoperability and Harmonization in the African continent… is it attainable?

Earlier this year, I attended the 3iAfrica Conference in Accra, Ghana, where the topic of intra-African trade and seamless cross-border payments was a recurring theme. I also moderated a panel on digital payment fraud at RegTech Africa held in Lagos, Nigeria. The discussions at both conferences emphasized the need for less restrictive borders to better facilitate trade and financial transactions across the continent. The idea of interoperability and harmonization across Africa presents both immense opportunities and significant challenges.

While the vision of a seamlessly connected payment system in Africa is compelling, my own experiences highlight the complexities on the ground. Take, for example, my travels between Ghana and Nigeria. In Ghana, using my credit card was straightforward. I could easily make purchases at various merchants without much hassle. However, my experience in Nigeria was starkly different. I quickly realized that only a few merchants accepted cards that weren’t issued by Nigerian banks. To add to the inconvenience, when I tried withdrawing fiat cash from ATMs, I faced not only extremely low withdrawal limits but also numerous instances where the ATMs couldn’t connect to the network. It was a frustrating juxtaposition – being pushed toward a cashless society but finding extreme limitations in actually transacting, both digitally and with cash.

Breaking Down the Barriers to a Unified Payment System

My experience is reflective of the broader challenges of harmonizing Africa’s financial systems. At the Africa CEO Forum in Kigali, Rwanda, Aliko Dangote highlighted similar obstacles when traveling across the continent. He remarked:

"As an investor, as someone who wants to make Africa great, I have to apply for 35 different visas on my passport. I really don’t have the time to go and drop off my passport in embassies to get a visa. I can assure you that Patrick [Pouyanné] doesn’t need 35 visas on a French passport, which means you [Patrick] have freer movement than myself in Africa."

This underscores the barriers to intra-African travel and business, even for influential figures like Dangote. A lack of harmonized regulations not only affects e-commerce and financial services but also limits the ability of entrepreneurs and investors to expand across Africa.

While there’s no doubt that efforts like the African Union's recently published "Interoperability Framework for Digital ID" are steps in the right direction, the journey towards true harmonization is far from simple. The AU’s framework is not about creating a single, unified system but rather about enabling existing systems to communicate across borders. This approach respects the digital sovereignty of individual nations while promoting connectivity.

The Role of Mobile Money in Financial Inclusion

One of the most significant factors influencing payment in Africa is the high penetration of mobile money. In Kenya, M-Pesa revolutionized the payment system, making it easier for millions to send and receive transactions securely without needing a traditional bank account. The success of M-Pesa, along with platforms like Wave in Senegal and Paga in Nigeria, showcases how payment solutions tailored to local needs can drive financial inclusion.

However, the adoption of mobile money varies widely across the continent, and cross-border payment interoperability remains a challenge. While fintech companies are working to bridge the gaps, the reality is that payment methods remain fragmented, limiting seamless commerce and economic growth.

Opportunities and Risks in a Unified Financial System

The potential benefits of cross-border payment solutions are vast:

✔ Easier business expansion: An African entrepreneur could verify their identity and conduct business seamlessly across multiple countries.
✔ Improved financial inclusion: Unbanked populations could access wallets and financial services using only a mobile phone.
✔ Boosted e-commerce growth: More streamlined online payment options would increase trade across the continent.

However, achieving true financial inclusion requires overcoming regulatory, technical, and trust-related barriers:

❌ Cybersecurity Risks: Weak payment service infrastructure in some African countries raises concerns over data protection and fraud.
❌ Fragmented Adoption: Some sub-Saharan Africa markets still prefer cash-based transactions, limiting the growth of digital payment systems.
❌ Policy and Legal Challenges: A comprehensive African-wide digital identity framework must be supported by political will to enable regulatory enforcement.

Is Financial Harmonization Attainable?

So, is interoperability and harmonization across Africa truly within reach? The answer is cautiously optimistic.

Initiatives like the AU’s Interoperability Framework, Pan-African Payment and Settlement System (PAPSS), and efforts by the Africa Prosperity Network are laying the foundation for a seamless financial ecosystem. But true success will require:

🔹 Government cooperation to align regulations and compliance standards.
🔹 Fintech innovation to ensure secure, scalable payment solutions.
🔹 Consumer adoption through trust-building and education on digital payment platforms.

So, is continental interoperability and harmonization attainable? The answer is cautiously optimistic. Initiatives like the AU’s Interoperability Framework and efforts by the Africa Prosperity Network show that foundations are being laid. But the road to success will depend on sustained commitment from governments, private sector players, and civil society.

The dream of a digitally interconnected Africa is more than just technology – it’s about reimagining borders, while respecting national sovereignty and creating new paradigms of cooperation. It’s a bold vision that, while fraught with challenges, has the potential to transform the socio-economic fabric of the continent. It is within reach, but it will require persistence, collaboration, and a shared vision of prosperity for all Africans.