From Lagos to Abidjan: 1,000km of entrepreneurial energy in need of better digital payments

The route connecting Abidjan to Lagos is the most densely populated region in West Africa. Seventy million people are estimated to be living along this stretch, which concentrates nearly 75% of the region's commercial activities.

Transforming the 1,028km stretch from a trade route into a fully integrated digital trade corridor is a top priority for the Economic Community of West African States (ECOWAS) and West African Economic and Monetary Union (WAEMU) countries. This vision was born from the treaty of Yamoussoukro, which was ratified by all the governments of Benin, Cote d’Ivoire, Ghana, Nigeria, and Togo in 2014.

According to GSMA, West Africa is the leading global sub-region in mobile money-enabled international remittances and merchant payments. The growing use of mobile money has helped increase financial inclusion from 56% in 2018 to 71% in 2022, and it was estimated that nearly 75% of account owners in WAEMU have a mobile money account in 2021 (World Bank’s Global Findex). Digital payments are crucial to driving financial inclusion and unlocking countless economic opportunities to accelerate the realization of the Africa Continental Free Trade Area (AfCFTA) and Agenda 2063.

Digital financial inclusion is also key for small-scale cross-border traders, especially women and youth. It is estimated that 70-80% of merchants trading along the Abidjan-Lagos Corridor every year are women.

WAEMU has chosen to develop and implement a Regional Merchants Payments Digitization Roadmap that will provide specific recommendations following good practices (in line with the FIGI EPAI approach, for example) to address barriers faced by merchants and increase their digital financial inclusion, powered by the adoption and usage digital payments for the success of the One African market.

On a regional level, the Central Bank of West African States (BCEAO) launched the pilot phase of WAEMU’s interoperable instant payment system last month. Member states can also leverage continental tools, such as PAPSS: the Pan-African Payment and Settlement System, a secure, instant and simplified cross-border payment platform across Africa.

Specifically, we aim to prioritize women—and youth-led businesses, policymakers, regulators, financial service providers (FSPs), and merchants at the country, regional (WAEMU), and continental (AfCFTA) levels. This initiative also encompasses a comprehensive capacity-building programme designed to support the National Bureau of Statistics in developing and deploying a standardized merchant digital payments measurement tool.

This strategic plan has been designed by a coalition of African institutions (the African Union Commission, AfCFTA Secretariat, WAEMU, Federation of West African Chambers of Commerce and Industry and WAEMU Association of ICT Companies) in partnership with the UN-based Better Than Cash Alliance, to foster the adoption and use of digital payments among merchants, with a particular emphasis on empowering businesses led by women and youth.

By promoting digital payments to power digital financial inclusion, new opportunities to facilitate access to finance and markets for these already resilient entrepreneurs abound.

High-level delegates from the steering committee have come together virtually to discuss such topics, but also during pivotal pan-African events like GITEX Africa to advocate and provide concrete examples to unlock the power of the Africa Single Market for MSMEs with digital payments. With 30,000 visitors and 1,400 exhibitors gathered in Morocco to discuss digital innovation, GITEX was a prime platform to leverage innovation, align with policy-makers and ultimately, reach digital financial inclusion for all.

Centred around peer learning on digital transformation, strategic harmonization, and expanding regional integration, the roadmap initiative stands to bolster the economic prosperity of the WAEMU region at national and regional levels. It aligns with the widespread adoption of regionally interoperable payment platforms championed by the Central Bank of West African States (BCEAO). It’s also in line with the AU’s Women’s Financial and Economic Inclusion initiative, aimed at empowering 10 million African women and youth to access $100 billion by 2030.

These ambitious goals are weaved into the vision of unleashing the One Africa Market through the AfCFTA, as outlined in the Protocols on Digital Trade and Women and Youth in Trade.

When true digital financial inclusion is achieved, everyone who calls Africa home will have the opportunity to soar to their fullest potential, especially women and youth who dominate the MSME sector across West Africa.

Making digital financial services, particularly digital payments, ubiquitous and responsible is an urgent challenge and opportunity; they have proven power to transform the lives of nearly 49 million young people and approximately 35 million women living along the Abidjan-Lagos corridor.

Abossé Akue-Kpakpo, Director of Digital Economy, WAEMU; Aminou Akadiri, AKADIRI, Executive Director of the Federation of West African Chambers of Commerce and Industry (FEWACCI); and Antoine Ngom, President of WAEMU association of ICT Companies (ROPTIC) also contributed to this piece.