In a post-Brexit climate, it’s evident that UK businesses have had new hurdles to tackle. But as one door closes, another opens in Africa.
The continent has emerged as a key expansion opportunity for British companies looking to grow internationally. According to the World Economic Forum, Africa’s consumer spending is projected to reach $2.5 trillion by 2030. However, navigating African markets comes with financial complexities, particularly in cross-border payments, which can create barriers to entry. In this article, Ola Oyetayo, Co-founder and CEO of Verto, outlines strategies to help companies overcome these hurdles and unlock new opportunities.
Key business opportunities
Countries like Nigeria, Kenya, and South Africa are home to dynamic, fast-growing economies, driven by key sectors such as agriculture, natural resources, and technology. They also benefit from a tech-savvy youth population that is accelerating the adoption of new technologies, especially for financial services. With new post-Brexit trade frameworks supporting UK-Africa relations, the opportunity to trade, invest and establish partnerships across the continent has never been greater.
This growth in digital financial services – driven by mobile banking, e-commerce, and fintech adoption– is reshaping business practices. As businesses expand, financial innovation will play a critical role in ensuring seamless transactions and market success.
Cross-border payment challenges
UK businesses venturing into African markets face several key payment obstacles that can impede their operations and growth. Currency volatility is a primary concern. Fluctuating exchange rates – driven by economic and political shifts – can erode profit margins if not properly managed.
Limited financial infrastructure in some regions contribute to transaction delays and inefficiencies. High transaction costs associated with international transfers eat into profit margins, while regulatory complexity across different African jurisdictions create compliance hurdles. Additionally, a lack of transparency in the payment process can create uncertainty and complicate financial forecasting for businesses.
Overcoming payment barriers
While cross-border payments can be complex, businesses can adopt these key strategies to reduce risks and enhance efficiency:
Navigate currency volatility
Use fintech tools like multi-currency wallets to reduce risks associated with fluctuating exchange rates. This allows businesses to transact in local currencies and minimise unnecessary conversion costs.
Enhance efficiency and scalability
Leverage API integrated solutions from established payment providers. These platforms have built-in compliance features, seamlessly aligning with regulatory frameworks to ensure Anti-Money Laundering (AML) and Know Your Customer (KYC) compliance across multiple African markets.
Prioritise transparency
Work with payment platforms that offer clear fee structures and real-time exchange rates to simplify financial planning. Greater transparency improves financial forecasting and enables more strategic decision-making.
Africa presents significant opportunities for UK businesses, but navigating cross-border payments requires careful planning. Addressing currency risks, regulatory hurdles, and inefficiencies is not just a necessity–it’s a strategic imperative.
By embracing financial innovation, leveraging fintech partnerships, and developing a market-specific payment strategy, UK businesses can establish a strong foothold in Africa’s high-growth economies with confidence.
