By Our Correspondent
Nigeria trails South Africa and Kenya in the development of key business-to-business (B2B) payment processes across Africa. This includes the adoption of electronic bank transfers as well as the speed of processing invoices and payment automation, according to a new report by Duplo.
The report titled: ‘Exploring the State of B2B Payments in Africa’, covered surveyed opinions of more than 1,200 professionals from Kenya, Nigeria, South Africa and Ghana. South Africa led the way in electronic bank transfers, with 49.1% choosing it as their preferred way to pay vendors, followed by Nigeria with 48.5%, Ghana with 34% and Kenya with 31.9%.
Kenya led in payment automation, with 83.4% of Kenyans saying that their payment system was either semi-automated or fully automated, compared with Nigeria’s 79.9% South Africa’s 71.69% and Ghana’s 67.23%. When it came to the speed of processing invoices, South Africa had a slim lead, with 39.93% stating that it typically takes a day or less to process invoices compared with Nigeria’s 39.74%. Africa’s B2B payment sector represents a significant, yet largely untapped opportunity. This is partly due to the complexity and larger transaction volumes associated with B2B payments.
According to the World Bank, the continent’s share of the global B2B payment opportunity stands at $1.5 trillion. However, despite this promising potential, many businesses grapple with considerable payment delays and other issues with their payment processes that negatively impact their cash flow and slow their growth. In recent years, digital payment solutions have eased many of these challenges but there remain several issues to be addressed in the journey of easing the flow of money between businesses in Africa.
For example, security ranked as the most critical feature across the board for respondents when choosing B2B payment software, with 35.89% selecting it as the feature they valued the most. Across individual countries, security was also the top feature – Kenya, 39.9%, Ghana, 36%, South Africa, 35.6%, and Nigeria, 32.2% – emphasizing the importance companies attach to safeguarding their financial data.
Functionality and ease of use 17.6%, multiple payment options 13.5% and speed 12.9%, follow, showing a preference for payment flexibility and quick transactions. Pricing, 11.5% and scalability, 8.2% are less prioritized, suggesting a focus on functionality and immediate needs. Speaking on the report, Chief Executive Officer and co-founder of Duplo, Yele Oyekola, said despite various challenges, the future of B2B payments in Africa is set for dynamic growth and innovation, signalling a new era of opportunities and expansion for the continent’s business ecosystem.
In another development, the UK Foreign Secretary James Cleverly has announced a 58-million pound ($73 million) aid package to boost food security in Nigeria, during his first official visit to Africa’s most populous country. The funding included 55 million for projects to lift Nigerian food production and resilience to climate change, plus 2.89 million pounds for rural communities to improve animal health and promote cleaner cooking practices that reduce carbon emissions, according to reports on Wednesday evening 2 August 2023.
The money is part of a 95 million pound program announced at the COP27 climate summit in Egypt last year. “Nigeria has a booming population and the largest economy in Africa — there is huge potential for an even closer partnership between UK and Nigerian businesses which will be of mutual benefit to both countries,” Cleverly told reporters in Abuja, the nation’s capital. Two thirds of Nigeria’s workforce is involved in agriculture and the vast majority of its farmers are smallholders who cultivate modest plots of land.