Governments across Africa are doubling down on their efforts to tackle the fallout from the COVID-19 pandemic with a view to saving livelihoods and safeguarding their economies. In many African countries, policy makers have been quick to proactively devise and implement strategies to contain the outbreak, ensure the supply of essential products, help vulnerable communities and maintain the stability of their financial systems.
The economic repercussions of COVID-19 for Africa are expected to be far reaching. The African Union, as expressed in a report published 03/04/2020, expects harmful exogenous effects across the continent, including a decline in remittances, foreign direct investments and official aid assistance, as well as endogenous effects related to disrupted economic activity, reduced revenues, and increased public expenditure.
Needless to say, remittances play a significant role in spurring economic growth across Africa. According to the African Union report, “remittances have been the largest source of international financial flows to [the continent] since 2010, accounting for about a third of total external financial inflows.” At Western Union, we are proud to have played a central role in enabling a fast, reliable and convenient flow of remittances to Africa for more than two decades.
With the global economic slowdown, local lockdowns, and movement restrictions taking a toll on money movement and remittances–at least in the near term–Western Union continues to do everything possible to help customers receive their transfers when and where they are needed. We are working closely with agents, partners and regulators across the continent to ensure we continue to provide money transfer services as an essential service to communities during the current COVID-19 crisis, and mitigate the impact on our consumers and their loved ones in Africa.
To this end, Western Union has focused on accelerating the expansion of its digital money transfer capabilities so more consumers, including the African diaspora, can make essential cross-border payments and transfers to their loved ones from the comfort of their homes. These efforts include, among other things, easier onboarding and assisted services, including the recently announced ‘Digital locations’ service that is available in select countries. Further illustrating our commitment to providing digital money transfer capabilities to our consumers, Western Union’s digital services capture all the top 20 of the world’s primary remittance-sending countries, as ranked by the World Bank.
While the response to COVID19 and its repercussions on our customers, agents and partners in Africa remains a top priority for us at this stage, Western Union will continue to deliver on its long-term strategy in Africa. The latter has been devised to drive inclusive innovation, expand our network, develop new partnerships, roll-out digital services and support regional integration and local economies.
Championing Inclusive Innovation
We think no one should be left out of the global economy and innovation should be inclusive and driven by the voice of the customer and their genuine needs. While some companies limit the number of corridors they serve in Africa to the most popular ones, Western Union challenges itself to spread farther, reaching not only big cities but also remote rural posts. For us, it is not just about reaching to the farthest corners, it is about striving to meet our customers where, and at whatever level of technological sophistication, they want.
Unlike digital-only companies that target select customers and corridors, Western Union adopts an inclusive omni-channel strategy that aims to address the needs of the diverse African customer base, including the sizable unbanked and underbanked populations. Pairing our fast-growing digital network with our retail, account and mobile wallet pay-out capabilities allows us to serve customers using their choice of digital or cash, creating a truly inclusive platform.
Developing new partnerships
Western Union’s unique ability to partner with an array of tech leaders and financial institutions enables us to help connect Africa to the global financial system and assist local companies to pursue their global ambitions. It also drives financial inclusion and improves last-mile access for millions of unbanked and underbanked populations. Going forward, our new open-platform strategy will play a vital enabler role to this end.
For example, we are enabling Safaricom—a company that has revolutionized financial inclusion with their e-wallet—to scale money transfers to more than 200 countries and territories. Western Union has also recently concluded a strategic agreement with Bharti Airtel, a leading global telecommunications company with operations in 18 countries across Asia and Africa, to launch real-time payments into millions of Airtel Africa Mobile Wallets across 14 countries in Africa.
Equally important, African banks are set to benefit from our open-platform strategy in enhancing their cross-border money movement capabilities and customer experience. If you look across each of Western Union’s strategic pillars, which include distribution, compliance, FX/settlement and licensing, there are different components that could add value to African banks in different ways. From our global reach and network of more than half a million Agent locations to our ability to embed our digital assets in a bank partner’s platform, Western Union can complement bank partners’ own ecosystems so they can offer more services to customers in a reliable, fast and transparent way.
Through our collaborations and partnerships across the continent, we aim to achieve impactful innovations and help companies and financial institutions better address the challenges of scale, regulation, compliance and trust.
Western Union’s footprint on the continent has grown significantly both in terms of number of countries and Agent location network. Today, Western Union services are available at more than 45,000 Agent locations spanning more than 51 markets in Africa. Western Union is committed to the expansion and development of its pan-African digital and retail network to provide a critical link to the ever-growing African diaspora living and working in countries around the world. Our digital services are now live in ten countries in West Africa and we are working on adding new countries to our digital footprint.
Moreover, Western Union’s consumer-to-consumer money real-time cross-border payments capability is now active when sending to select banks or digital wallet providers in 17 African markets out of 50 globally active countries. We are assessing more countries for real-time capabilities by the end of 2020 and beyond, demonstrating Western Union’s commitment to invest in Africa on par with other developed regions.
Supporting Regional Integration
Intra-Africa remittances are poised for significant growth, fueled by the African Continental Free Trade Area, changing migration flows and the growth of regional economies. This will result in more cross-border payments, commerce, movement of people and regulatory commonalities. Western Union stands ready to empower regional economic integration and the growing flow of trade, investments and human capital within Africa, leveraging its strong and unmatched cross-border money movement and payments platform.
Mohamed Touhami El Ouazzani is the Regional Vice President for Western Union Africa