In 2021, news of GameSpot’s short squeeze and the collapse of Bill Hwang’s Archegos Capital hit headlines of financial papers as top and remarkable stories. This got me curious on what to anticipate in 2022 for African Capital and Money markets. Here are some of the trends to watch out for this year;
Foreign Direct Investments in African Start-Ups: The year closed on a high with Nigeria and Kenya attracting huge funding from global venture capital firms. In 2022, we expect to see more fundraising as these start-ups scale-up their operations. In January alone, Kenyan start-ups; Zanifu Capital, Poa Internet & Copia have secured funding to a tune of $79 million. With this expected to go on in the year, the countries to watch out for are Nigeria, South Africa and Kenya.
Digital Currency Uptake: With crypto and digital currencies becoming a common phenomenon globally, countries are looking at ways of rolling out their digital currencies. El-Salvado led the race by being the first country to adopt bitcoin as a medium of exchange. Everywhere, central banks are invested in research and drafting regulations as they prepare to launch their digital currencies.
Banking Sector Performance: With normalcy returning after a two-year Covid-19 pandemic, business performance is poised to record significant gains. One Sector worth reporting shall be Banking. The pandemic forced these institutions to conservatively write-down their loan books as they restructured most of them to ease their clients’ burden. This saw a dividend freeze and abnormal profit declines. With the pandemic behind, banks have begun recording profits every quarter and by the time they publish their books, this previous year’s performance is expected to be one of the best. More focus will be on central banks’ guidelines on the capital requirements and dividend issues.
Mobile money: One of the most significant innovations to hit our continent is mobile money. The pandemic saw the amount of cash transacted via mobile money hit new highs. With resumption of transaction fees, the bottom-line of telcos and other licenced players is expected to increase. This will also spur competition as other financial institutions especially banks scramble for a share of these monies. A good example is Equity Bank’s till that allows for business payments across different networks. It will be of great interest to see how it takes on Mpesa’s dominance as it offers a
one-stop shop for business and customers to transact directly from their bank accounts.
Credit to SMEs