8th African Financial Inclusion Policy Initiative (AfPI) Annual Leaders’ Roundtable – Welcome Remarks and Introduction by Dr. Alfred Hannig, AFI Executive Director

Your Excellency, Dr. Louncény Nabé, Governor of Banque Centrale de la République de Guinée, AfPI Chair

Your Excellency Prof. Florens Luoga, Governor of Bank of Tanzania, AfPI Vice-Chair

Dear Governors, Deputy Governors

Ladies and Gentlemen, Good morning,

It is a great honour for me to welcome you to this 8th Annual Leaders Roundtable of the African Financial Inclusion Policy Initiative (AfPI).

Allow me to start by thanking Prof. Florens Luoga and the Bank of Tanzania, for co-hosting this meeting. Bank of Tanzania had kindly accepted to host this meeting in-person (face-to face) in Arusha but the COVID-19 outbreak with the subsequent movement restrictions obliged us to shift to a virtual event.

I would like to also take this opportunity to thank the Leaders for taking the time to attend this virtual AfPI Roundtable. Your attendance is testimony to the importance that you and your institution attach to the regional initiative in spearheading the formulation and implementation of policies that advance financial inclusion in Africa.

Governors, Deputy Governors, Ladies and Gentlemen,

The world continues to grapple with the ramifications of the COVID-19 pandemic, which has greatly disrupted business as usual and has in one way or another impacted all our lives. What began as a health crisis has quickly transformed into an economic crisis that threatens to reverse many years of gains in economic growth, poverty reduction, and even financial inclusion. In Africa, most countries have not been spared from these economic impacts as remittances and tourism have dropped sharply, investment has dried up, and trade supply chains have been affected. The pandemic is expected to hit African economies extremely hard. According to the World Bank biannual Africa’s Pulse report, as a result of the pandemic, economic growth in sub-Saharan Africa will decline from 2.4% in 2019 to between -2.1% and -5.1% in 2020, depending on the success of measures taken to mitigate the pandemic’s effects. This means that the region may experience its first recession in 25 years.

I commend the Leaders’ in the African region for the timely and decisive actions taken to ensure that the financial sector continues to function under these very challenging times. These actions have cushioned the impact on the most vulnerable in society. AFI reaffirms its commitment to continue providing support to its members, both to design high impact financial inclusion policy interventions, and to support the implementation of such policies. We have also embarked on enhancing our strategy to ensure that we effectively navigate through the challenges in our current operating environment. With the members support and our strategic partnerships, we are optimistic that we will be able to further generate value to the membership by addressing evolving and dynamic financial inclusion policy needs in complex areas such as global convergence topics relating to balancing financial inclusion and financial stability. The pandemic has also made us rethink on how we can design our service delivery more effectively through content and contact approach that will retain the peer learning experiences that has made AFI a strong institution.

Looking back, we can recognize that AfPI, your platform, which is the primary platform for Heads of Institutions in Africa to support and develop financial inclusion policy and regulatory frameworks, and to coordinate regional peer learning efforts, has made significant progress. Through your impulsion, the platform has facilitated:

• the establishment in 2019 of AFI Regional Office in Africa (based in Abidjan, Côte d’Ivoire)
• the production of a Regional Policy Framework for DFS Interoperability in Africa,
• the production of a Regional Policy Framework for Innovative Cross-border Remittances in Africa
• the production of a Regional Policy Framework for Responsible Digital Credit

All these Frameworks aim to guide AFI member institutions in the region in developing appropriate legal and regulatory measures with the aim to drive usage of digital financial services, increase customer convenience, mitigate potential risks, and boost scale for both domestic and cross-border payments.

In today’s meeting, AfPI’s Expert Group on Financial Inclusion Policy (EGFIP) will submit two additional draft frameworks to Leaders: one on “Strengthening Agent Network for Digital Financial Services” and another on “Enhancing MSME Financing Ecosystem”. I understand that their recommendations derived from their assessment of the impact of the COVID-19 outbreak on African countries’ economies and the necessity for regulators to be prepared for post-COVID-19 and capitalize on lessons learnt in response to the outbreak.

Africa is leading the Policy leadership of designing bottom-up member experience based best practices. Thus far, the highest number of regional frameworks that are being implemented are developed by the African Region, as evidenced by the above five (5) Policy Frameworks.

The road ahead post-COVID-19 requires robust and inclusive policy responses. Although we see that most governments have put in place stimulus packages to cushion economies and aid recovery, we also see that the packages do not target the informal sectors mostly run by women and youth as the delivery channels for the packages require formality. We therefore see a case for policy makers to accelerate financial inclusion interventions so that these efforts benefit even the informal sector to quicken the recovery process. We believe that without the strides AFI members have made in advancing financial inclusion, the situation could have been worse. Initiatives in digital finance, mobile money, agent banking, e-KYC and SME finance have played a critical part in mitigating impact of the current crisis. The crisis is not over yet, and we are on this road together.

I therefore wish to congratulate the EGFIP members for their pro-active actions in identifying relevant topics and developing policy tools to address pertinent challenges of enhancing financial inclusion in Africa.

AfPI Leaders will also exchange views on policy options for accelerating the financial inclusion of disadvantaged groups such as youth, women, displaced persons, and other disproportionately excluded segments of the population. As we remember, we all made a commitment to address the needs of these groups when we came to Kigali, Rwanda, at the GPF when we issued the Kigali statement.

Governor, Deputy Governor, Heads of Institutions,

Progressively, our technicians are providing us with the necessary tools to develop or improve our regulatory frameworks, while taking advantage of the potential of technology.

AFI has been able to provide targeted in-country implementation support to members in Africa on key financial inclusion policy changes that the region has developed and is currently working on. These include, supporting implementation of the Policy Frameworks mentioned above, based on members policy priorities in the areas of digital financial services and technologies that support access, usage and quality of financial services; Gender Inclusive Finance (women’s financial inclusion); Inclusive Green Finance to build resilience and mitigation of the impact of climate change to the vulnerable underserved segments including MSMEs. ICI support is open and will continue as we work with members to facilitate achievement of country specific goals financial inclusion goals in areas such as data protection, cybersecurity, financial literacy, and empowerment of consumers.

All this is possible with the very impressive contribution from our members, but with your support, we have also been able to mobilize additional funding from our funding partners which in fact allows us to expand on in-country implementation. Therefore, I need to mention the multi-donor funding implementation fund (MD-PIF) that has been setup with three European Governments (Germany, France and Luxembourg), but also now we have just embarked in a program together with MasterCard Foundation that is also dedicated to Africa.

So far, Africa Region accounts the highest level of ICI programs with 15 ongoing ICI programs since early 2019. However, COVID-19 pandemic has caused some operational challenges due to movement restrictions.

During the Virtual leaders dialogue held on 30 June 2020, Leaders in Africa provided guidance on regional voice. We will work closely to enhance members voice within regional bodies discourse on financial inclusion. However, it is worth noting that AFI has had its first regional collaboration from Africa with the African Development Bank (AfDB), the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) and the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA). We see traction on advancing members voice and support for policy implementation.

Governor, Deputy Governor, Heads of Institutions

We will also deal with AfPI Governance issues during this meeting, especially the election of a new Vice-Chair for AfPI. At this point, allow me to thank Governor Louncény Nabé, the current AfPI Chair, for his leadership, guidance, and advocacy during his tenure over the last two years. Governor Nabé will introduce the incoming Chairperson, the current Vice-Chair, during the last session of this meeting. I would also like to thank all the previous AfPI Chairs, namely the Governors of the Central Bank of Kenya, of BCEAO and of the Bank of Mozambique.

My sincere thanks to each one of you for working with AFI in delivering the mandate of equitable, gender-sensitive and sustainable financial inclusion. We appreciate your commitments to the AFI network.

Together, we are making progress.

Thank you.