Africa is moving into the next phase of the fintech universe. Yes, merely building products and services to enable people and companies to receive and send money, will not deliver outperforming-value to stakeholders (investors, merchants, communities, users, etc). The future of African fintech will be anchored on two pillars, besides the requirements of seamless transfer of funds: ecosystems for merchants and partnerships.

On the ecosystems, you must offer, besides the ability to receive/send funds, tools to help your customers run their business operations. And those tools include bookkeeping, invoicing, domain training, and other adds-on. Indeed, besides helping them move money, you need to help them also make money!

For partnerships, it is hopeless to think you can do it alone. To thrive as a fintech, you must partner with others in your sector and outside your sector. For example, you can partner with a payroll company to integrate its APIs so that your merchant can also do payroll within your platform. The same goes with specialized training which can help the merchants do better in the market. Of course, there is another dimension of partnership which involves integrating with companies in other countries to expand your reach.

In my keynote during  an Africa Fintech Festival, in Uganda, I explained fintech as “the new growth operating system in Africa” because at the end of all in the market, it is about money, with the ability to pay and be paid.

The destination: this video explains.

n this videocast, I discuss the need to build a truly pan-African digital remittance/transfer banking product which is agnostic of location or currency in Africa. None of the products we have today meets that standard. Largely, I envisage a situation where all you need to buy and sell across Africa is one bank account in just one African Union country. With that, you do not have to even think about the specific currency of that account as technology will seamlessly make it possible to access other African markets for payments, transfer, etc. The banks or fintech companies must still comply with all regulations related to international transfers, forex, etc. The only difference is that customers will not see them as they will be hidden with technology.

It was a weekend of entrepreneurial carnival. Chairman Tony Elumelu had asked me to fly from the United States to speak a day before. Here, Aliko Dangote is making a long  presentation, chronicling his experiences in business. The Vice President of Nigeria (Prof Osinbajo), Chairman Jim Ovia of Zenith Bank, and  leaders of corporate Nigeria were at the event. As Dangote spoke, I took note.

Dangote dropped many lines: “I tried banking but was not as lucky as Oba Otudeko [former chair of First Bank of Nigeria’s parent company FBN Holdings]”. And he added:  “there was nothing we did not try”.  Then,  when Dangote could not find success in banking and some other areas he journeyed, he returned back to building an industrialized conglomerate which according to him was “what we know best”… One of those key areas he focused on was cement production.

As he spoke, I summarized everything under a strategic vision of accumulation of capabilities: building moats which make it harder for competitors, by improving efficiency across all segments of operations. And when he finished, I concluded: Ovia, Otudeko and Elumelu had accumulated capabilities in banking with moats to defend their banking castles; Dangote found those moats impenetrable with his Liberty Merchant Bank, Dangote Capital, etc. He gave up, and decided to deepen his moat in the cement business to make it also impenetrable for others. Case for organizational competitiveness and strategy!

You can read my long note on this topic here.

Comment on Feed

Comment 1: Warren Buffet would say ” I never invest in anything that I don’t understand”

Dangote tried investing in the banking sector but he failed, he tried pasta and could not succeed either, he then used the lessons learnt to strengthen what he understood better and he built for himself a strong foundation and wall impenetrable just like that of his competitors in the pasta(noodles) and banking sector.

Understanding your business and investing in “what you know best” is one of the secret ingredients to succeed as an entrepreneur. Thank you Prof Ndubuisi Ekekwe .

Comment 2: When you fail, it’s because you are incompetent and clueless, and when you succeed, it’s because you are protected by the government, and you receive preferential treatment.

However things turn out for you, just know that you will always have critics, the world is not a very nice place. But in all you do, work hard to be successful. It’s better to be accused of succeeding because of preferential treatments, than being a failure, only to be dismissed as ne’er-do-well.

Comment 3: Businesses try to differentiate themselves with a competitive advantage, but most never find or sustain one. A rare few will discover an “unfair” competitive advantage. The best of the best create what we call the “ultimate unfair competitive advantage.”

But no company begins with the ultimate unfair competitive advantage. It emerges in stages with the accumulation of data, the advancement of analysis techniques, and the creation of novel applications.

Comment 4: Where are the promoters of “monopoly theory”? People hardly ever believe that Dangote failed in some businesses. Instead they despise his successes and brand it “monopoly from government support”.
Dear Prof Ndubuisi Ekekwe thank you for teaching us that if someone is doing better than us in business, there’s something he knows that we don’t know. I am learning from you all the time.

Comment 5: Indeed. The moat is an often overlooked element of business and strategy formation. Some might confuse it for a “value proposition” but they are quite different.

Simply put, a value proposition is an element that a business offers its customers. Whereas a moat is what protects a company from competition. So one being customer focused and the other being competition focused.

Comment 6: Generally speaking, finding out what your rivals are up to is one of the trickiest tasks of running a business. Most companies or organizations gather intelligence by talking to their salespeople and customers and by reading industry publications. Collecting promotional literature and putting competitors to an actual test are ways to expand the scrutiny.

Moreover, people aren’t stupid. If you’re doing something right and it works, then sooner or later they’re going to figure it out and come after you. Can your people respond? Can you keep innovating? Can you stay ahead? These are the real questions you should be dealing with.

My Response: “If you’re doing something right and it works, then sooner or later they’re going to figure it out and come after you.” – absolutely. They can even hire your team. The key is having that moat to protect that company.