The October 2008 edition of Africa Renewal Magazine asked some questions we think all Africans should seriously ponder –
“What if wealthy Africans decided to invest their earnings in Africa instead of overseas? And if the 80% of Africans now without bank accounts got access to formal financial services? And if African governments put their domestic revenues into productive investments?
We concur with Samuel Gayi, a senior economist on Africa at the Geneva-based United Nations Conference on Trade and Development (UNCTAD), who argues that “rates of savings [would] go up significantly and Africa could perhaps be in a position to meet more than its resource needs”.
African countries’ ability to finance a greater share of their development needs from domestic sources “would give them much-needed flexibility in the formulation and implementation of policies ” to address development challenges, direct resources into high-priority areas and “strengthen state capacity,” finds a 2007 UNCTAD report, Economic Development in Africa: Reclaiming Policy Space, Domestic Resource Mobilization.
Recent developments in mobile phone technology can help expand financial access for the poor, and hopefully mobilize savings. In South Africa, the Democratic Republic of the Congo, Zambia and Kenya, mobile phone banking is taking services to remote areas where conventional banks have been physically absent or too expensive. Subscribers can open accounts, check their balances, pay their bills or transfer money (see Africa Renewal, January 2008).
Though few Africans have bank accounts, nearly 80 million have cell phones, according to the International Telecommunication Union. FinMark Trust, a research group seeking to make financial services more accessible, reports that 17 per cent of those who do not have bank accounts in Kenya and Botswana nevertheless own mobile phones. In Kenya, as many as 1 million people use M-Pesa, a mobile-payment scheme.