World
Global Payments Revenue Pool Could Reach $2.9trn by 2030
By Modupe Gbadeyanka
The global payments revenue pool is projected to reach about $2.9 trillion by 2030 from the current value of $1.5 trillion, according to a report by Boston Consulting Group (BCG).
It was stated that in 2020, the market recorded a decline of 2.5 per cent from the figures achieved a year earlier but experts say all regions are likely to see growth over the next five years, with Africa having a compound annual growth rate (CAGR) of 6.9 per cent.
Asia-Pacific continues to lead the way with a CAGR of 8.8 per cent from 2020 to 2025, followed by Latin America at 8.3 per cent, the Middle East and North America at 5.8 per cent, and Europe at 5.3 per cent.
According to BCG, the payments industry suffered a mild impact from the COVID-19 crisis and has returned to growth with renewed momentum.
The report, titled Global Payments 2021: All in for Growth, is the 19th annual analysis by BCG of the global payments industry and reports that the sector responded quickly to challenges posed by the pandemic – from e-commerce enablement to accelerating cash-to-noncash conversion.
“The payments industry was an enabler of economic recovery during the COVID-19 crisis,” said Yann Sénant, a Paris-based BCG managing director and senior partner, coauthor of the report, and global leader of BCG’s payments and transaction banking segment. “But meeting the challenges raised by the pandemic has opened the gates to a wave of innovation that will see new players entering the space in greater numbers and raising the competitive stakes. The winners over the next five years will be the industry participants who move quickly to adapt to the new landscape, by seizing this new partnership and revenue opportunities.”
The report identifies a number of global trends that are likely to dominate the payments sector in the coming years. For example, digital ecosystems and specialized software solutions are likely to play a growing role in the industry, as integrated software vendors, Big tech players, and fintechs enter the space and as banks increase their engagement. A wave of industry consolidation and mergers and acquisitions will accompany this trend.
Digital currency activity is likely to pick up the pace with the possible launch of more central bank digital currencies. Speaking on the digital currency, Tolu Oyekan, Partner, BCG, Lagos said it was laudable that Nigeria will be one of the few African countries that are exploring the possibility of issuing a domestic Central Bank Digital Currency (CBDC) with the launch of the eNaira.
He said: “Digital currency is a more robust, efficient and regulated payment offer, it has the potential of enabling a safe financial system by significantly reducing liquidity and credit risk inherent in the traditional payment systems. The effective implementation of the Nigeria digital currency eNaira could enable faster economic growth, drive cross border payments and remittances which will, in turn, reduce the demand for forex and consequently the exchange rate”, he said.
Oyekan also stated that digital currency can improve financial inclusion.
Another global trend the report identifies is merchant acquisition, which it believes will remain the fastest-growing area in the sector. After a low of just 2.2 per cent growth from 2019 to 2020, it is expected to return to an annual CAGR of 11.3 per cent over the next five years, close its pre-pandemic average rate of 11.8 per cent from 2015 to 2019.
However, a boom in e-commerce is expected to dwarf physical point-of-sale transactions growth. These dynamics should lead to increasing cutting out middlemen. This is because of integrated software vendors and online marketplaces where consumers are able to pay for goods and services on their platforms.
Issuers and networks are trends that are expected to deliver strong performance, with issuing revenues in position to grow by 7.6 per cent and networks by 11.4 per cent from 2020 to 2025, close to the CAGRs of 9.4 per cent and 11.2 per cent, respectively, in the five years prior to the pandemic.
Potential headwinds in this area include the proliferation of noncard payments options—notably the success of “Buy now, pay later”—and a greater push by integrated software vendors and fintechs to partner with next-generation card processors on card opportunities.
Although the wholesale payments revenue pool dropped by $22 billion between 2019 and 2020, owing to low-interest rates and a decline in business spending, the recovery of this global trend is likely to be quick, with 6.6 per cent growth likely until 2025. However, the wholesale payments environment continues to be challenging, as incumbents and non-traditional players alike show increasing ambition in the sector, and as digital B2B and B2B2C platforms proliferate across all industries. In addition, corporate customers are increasingly demanding streamlined banking and payments services, analytical insights, and seamless data integration into corporate management systems.
Fintech is another likely dominant global trend. Over the last two decades, there has been strong growth by fintechs in the banking sector. Experts at BCG advise that fintechs must refine strategies to capture growth in an increasingly crowded space and develop elements such as people organization, compliance, and risk management functions.
“The payments ecosystem is in flux, and this offers tremendous growth opportunities to companies that are prepared to act fast,” said Markus Ampenberger, a Munich-based BCG partner and associate director, and co-author of the report. “Now is the time to gain long-term advantage through bold and strategic action.”
World
How Russia’s Multifaceted Relations Changing Egypt
By Kestér Kenn Klomegâh
The Arab Republic of Egypt, a country spanning the northeast corner of Africa and the southwest corner of Asia, has a highly strategic location and attracts multifaceted interests of foreign players. For decades, Russia has established diplomatic relations with Egypt and has consistently sustained diverse ties with this country. It is no secret that Russia’s lust for the region is primarily due to the strategic importance of the Mediterranean Sea for investment and economic cooperation with the Maghreb region.
Determined to strengthen, particularly, economic cooperation, Russian President Vladimir Putin has maintained regular contacts with his colleague, President of Egypt, Abdel Fattah el-Sisi, mostly discussing both bilateral cooperation and broader regional developments. The current world’s geopolitical development, for instance, the United States-Israeli war on Iran in the Middle East, constitutes one theme both leaders frequently review, attempting to find long-term solutions.
On April 2, Putin met with the Minister of Foreign Affairs, Emigration, and Egyptian Expatriates of the Arab Republic of Egypt, Badr Abdelatty, in the Kremlin – the seat of Russia’s presidency. In attendance during the official talks on the Russian side were Foreign Minister Sergei Lavrov and Presidential Aide Yury Ushakov, while Egypt was represented by Ambassador Extraordinary and Plenipotentiary to the Russian Federation Hamdy Shaaban. Ultimately, there is no need to overstate the importance of this meeting.
Russia’s footprints are expanding in Egypt, highlighting the growing industrial investment and the strengthening of bilateral manufacturing ties by undertaking projects to ensure energy security. At the same time, maintaining regular dialogue remains very important for both leaders.
Putin, speaking with the three-member delegation in the Kremlin, underlined the fact that there are many promising initiatives underway, many of which are already being implemented. He has previously spoken in detail about the construction of a nuclear power plant and the construction of an industrial zone, and over ten major Russian companies have expressed interest in participating in this project.
Nuclear Plants in El-Dabaa, Egypt
The construction of nuclear plants in the city of El-Dabaa, about 320 kilometres northwest of Cairo, the capital of Egypt. It is the first nuclear power plant in Egypt, and will have four VVER-1200 reactors, making Egypt the only country in the region to have a Generation III+ reactor. On November 19, 2015, Egypt and Russia signed an initial agreement, under which Russia agreed to build and finance Egypt’s first nuclear power plant. These are now being carried out, not as a charity project, but with a loan of $28 billion. According to reports, Russia will finance 85% as a state loan of $25 billion, and Egypt will provide the remaining 15% in the form of instalments. The Russian loan has a repayment period of 22 years, with an annual interest rate of 3%.
At the meeting, Putin also raised the construction of an industrial zone in Egypt. There are many appealing and related opportunities in this, regarding having an industrial zone to be located on the banks of the Suez Canal. The industrial zone is also entering a new phase, as Russian auto-manufacturing enterprises are advancing distinctive plans to expand local vehicle production, reinforcing the country’s role as a regional manufacturing hub. The move reflects broader economic linkages between Russia and Africa, particularly in industrial development and supply chain integration.
Conveying Greetings and Reviewing the Middle East Situation
Naturally, the situation in the region remains a shared concern, according to Putin, and further hope that the ongoing conflict will be promptly resolved. “As you know, President Trump also addressed this issue yesterday. Let me reiterate that we are prepared to make every effort to help stabilise the situation and, as they say in such cases, return it to normal,” he stressed during the meeting. In this context, it is particularly important to know Egypt’s assessment as a key country in the Middle East.
Putin reminded the delegation of another Russia-Africa summit, which is planned for October 2026. With high hopes that Egypt will be represented by a strong, high-level delegation. Should the Egyptian President’s schedule allow, he would, of course, ahead of the summit, be very pleased to welcome him to Moscow. Jointly chaired by Vladimir Putin and Abdel Fattah el-Sisi, the first Russia-Africa summit, an important acute phase of the developments with Africa, under the motto of ‘For Peace, Security and Development’, was held for the first time in October 2019, in Sochi, a city located on the Black Sea coast. The idea to hold a Russia-Africa forum was initiated by President Putin at the BRICS (Brazil, Russia, India, China and South Africa) summit in Johannesburg in July 2018.
The head of the Egyptian Foreign Ministry, as traditionally expected, conveyed greetings from President El-Sisi to the Russian president and handed over a written message. President el-Sisi places great value on all aspects of the bilateral cooperation, and is extremely grateful for constructive collaboration on the El Dabaa Nuclear Power Plant, which represents a key milestone in the partnership. Despite the challenges, it is evident that the project is moving forward and will be completed by 2028.
In summary, as Egypt and Russia are reliable and time-tested partners, Putin plans to promote strategic projects, particularly in trade, economics, energy, and food security. With over 107 million inhabitants, Egypt is the most populous country in the Arab world, the third-most populous country in Africa, and the 15th-most populous in the world.
World
US-Israeli War on Iran: Africa’s Reactions Through the Prism of the Global South
By Kestér Kenn Klomegâh
In an interview, Senator Mushahid Hussain, President of Pakistan-Africa Institute for Development and Research (PAIDR), explicitly offers a few important insights into the US-Israeli war on Iran and its implications for BRICS+ and Africa. Here are the interview excerpts:
What’s your interpretation of the US-Israel war on Iran, in the context of developments in the Middle East region?
The US-Israel illegal and unwarranted war on Iran was spearheaded by [Benjamin] Netanyahu (Prime Minister of Israel) and actively supported by [Donald] Trump (President of USA) as a Joint Operation with three fundamental goals: a) decimate the Islamic Revolutionary Regime; b) reshape the Middle East as part of Zionism’s ‘Greater Israel’ Project; c) preclude any possibility of establishing a Palestinian State with Jerusalem as its capital.
What is your assessment of Iran’s joining BRICS+ in 2025, China’s and Russia’s roles as members of this association, in this US-Israel war with Iran?
China and Russia have played, by and large, a low-key diplomatic role in supporting Iran but without any active political initiatives. BRICS is divided from within, as India is keen to curry favour with the USA and avoids close association with BRICS since the time that Trump attacked BRICS last year. But China & Russia are clear political beneficiaries of the war as American prestige is at an all-time low, having got entangled in an unwinnable war, resulting in weakening of the US ‘sole superpower’ image.
As an Asian expert, how would you characterise Africa’s reactions? And do you think that reactions were objectively authentic, basing perspectives broadly on Arab and Middle East contributions to Africa’s development?
Africa’s reactions to the war are primarily through the prism of the Global South, viewing Iran as resisting American-Israeli hegemonic designs, as, for example, manifested in two examples: South Africa’s rejection of American pressures to wean South Africa away from its support for Iran. Plus, Somalia joined Pakistan and China in supporting the Russian resolution in the UN Security Council seeking an immediate ceasefire and negotiations to halt the War, despite strident Western/US opposition to the Russian resolution.
World
Middle East War: World Trade Facing Worst Disruptions Since World War II
By Adedapo Adesanya
The Director-General (DG) of the World Trade Organisation (WTO), Mrs Ngozi Okonjo-Iweala, has said the global trading system is experiencing the worst disruptions in the past 80 years.
The trade body chief warned about the consequences as the WTO ministerial conference opened Thursday in Cameroon.
“The world order and the multilateral system we know has irrevocably changed,” she said, adding: “We cannot deny the scale of the problems confronting the world today.”
The organisation’s 166 members appear deeply divided as trade ministers gather in the Cameroonian capital for the WTO’s top conference, amid global economic turmoil linked to the Middle East war.
Over four days in Yaounde, WTO members will try to revitalise an institution weakened by geopolitical tensions, stalled negotiations, and rising protectionism — against the backdrop of the war in the Middle East, which poses a serious threat to international trade.
“The scale of the problems confronting the world today, even before the conflict in the Gulf, destabilised trade in energy, fertiliser and food,” Mrs Okonjo-Iweala said.
“National governments and international institutions alike have been struggling to navigate rising geopolitical tensions, intensifying climate pressures, and rapid technological change.
“Accompanying these shifts has been an increasingly loud questioning of multilateralism,” she added.
Mrs Okonjo-Iweala said these disruptions were just one symptom of broader upheavals shaking the international order created after World War II to prevent a repeat of the disasters of the first half of the 20th century.
“It feels appropriate that at the moment when the world is in turmoil with conflict in the Middle East, Sudan, Ukraine, and elsewhere, at this time of great disruption and uncertainty, we have gathered in Africa to discuss the road ahead for the global trading system,” she said.
“Africa is the continent of the future.”
WTO ministerial conferences are typically held every two years. The current edition in Yaounde is the second to be held in Africa, after Nairobi (Kenya) in 2015.
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