Over the last two decades, Africa's monetary systems have advanced. However, most Africans still lack access to credit and other forms of credit-based financial services despite liberalization, privatization, and stability. Most African financial institutions have enough capital and liquid assets. Although deeper, wider, and cheaper financial resources have been made available, they have yet to bear fruit. Over the last 20 years, Africa has made great strides in tightening banking regulation, leading to far more stable financial institutions. While there has been some improvement in the quality of supervision, it has been gradual. In this article, we’ll provide you with information on 3 of the main countries of Africa, where the financial market keeps developing more compared to other African countries. Also, we’ll cover how a certain country’s national currency performs and what payment systems are accessible to local people.

Kenya

The Shilling is Kenya's official currency. Since Kenya is a net importer of goods and services, its currency, the shilling, has lost 3.5% of its value versus the US dollar thus far in 2021. Importantly, the Kenyan shilling closed at Kshs 113.0 on the 17th of December 2021, marking a new all-time low and a fall of 7.2% from its peak in 2020.

Importers' desire for foreign currency towards the end of the month was likely to put a strain on the shilling in the following days. Due to reasons like rising oil prices and dollar demand from corporations in the energy and industrial sectors, the shilling is down roughly 5.5% versus the dollar in 2022, establishing multiple record lows.

Over time, Kenya's financial infrastructure has seen several modifications and transformations. In 2002, when phone companies realized they had accidentally created something that looked nearly like money, work began on the initiative that would become M-Pesa. Users in Kenya were buying "airtime" (phone data, or minutes), reselling it, transferring it to family members, and even utilizing it as a savings account by investing the bulk of their income in airtime to resale at a later date. In addition to that with M-Pesa Kenyan investors nowadays can start trading in financial markets. For example, FX trading in Kenya using mpesa as time goes by becomes more and more popular, because investors find this payment method quite convenient. According to studies, regions that were using mobile payment systems saw substantial economic development. In Kenia, 72% of the population uses mobile money.

Kenya has made significant strides in this direction, beginning with the modernization of its domestic payments infrastructure and the deployment of the Real Time Gross Settlement (RTGS) system in 2005, continuing with the introduction of mobile money services in 2007, and most recently with the implementation of improvements to strengthen and automate clearing systems.

Nigeria

On the African continent, Nigeria stands as a cultural and economic powerhouse. Across Africa, Nigeria is leading the pack in economic growth. Nigeria uses the Naira as its official currency. Presently, the country is struggling with an unchecked pace of inflation, which has a deleterious effect on the value of the national currency. The National Bureau of Statistics reported that in August, Nigeria's annual inflation rate increased to 20.5% from 19.6% the previous month.

The NBS said that the annual inflation rate rose because of a combination of factors, including a shortage of food; higher import prices as a result of the currency's prolonged devaluation, and higher manufacturing costs overall.

Incentives to speed up the development of agent networks throughout the nation, as well as the central bank's financial inclusion effort, have contributed to the growth of payment-focused solutions during the last two years. When it comes to doing send-and-receive transactions and bill payments, Paga, Tingg, and other mobile money services compete with mobile banking apps and bank unstructured supplementary service data (USSD) channels.

South Africa

South Africa's official currency is called the South African Rand. As expectations of aggressive tightening by the Federal Reserve drove up demand for the US dollar, the South African rand plummeted beyond 17.5 per USD, trading at levels not seen since August of 2020. Due to the deteriorating prognosis for the global economy and the resumption of severe load-shedding by Eskom, investors have been fleeing to safer currencies, including the South African rand.

Transactions are the grease that keeps the economy running. People and companies in South Africa make daily payments totaling millions of rand. A broad range of payment options, from cash to digital transactions, are available to South Africans (such as Card, debit orders, mobile payments, and real-time online internet payments). The National Payment System processes more than ZAR 576 billion in daily settlements (NPS). The NPS encompasses around 18 distinct payment methods available to consumers and businesses in the South African market. PASA controls and oversees a wide variety of monetary systems, from the use of prepaid debit cards to the trading of bonds for cash.