From Adanna Nnamani, Abuja
Africa’s cross-border payments market is set for remarkable growth, with projections indicating it will triple in size over the next decade to reach $1 trillion by 2035, up from $329 billion in 2025.
This is according to a new report by Oui Capital, an Africa-focused venture capital firm, which attributes the expected surge to expanding fintech innovation, the rapid adoption of mobile money, and growing intra-African trade.
The report highlights Africa’s leading role in mobile money adoption, with the continent recording 781 million registered mobile money accounts in 2022—a 17 percent increase from the previous year. These platforms processed an astounding $837 billion in transactions, representing 66 percent of global mobile money volumes and underscoring their growing influence in cross-border transactions.
Oui Capital noted that fintech-driven solutions are significantly lowering the cost and speed of remittances, with average fees now at 3.5 percent—less than half of what is charged by traditional banks. Transactions that once took days are now completed in minutes, a change that has greatly benefited small businesses and individuals. Still, the report cautions that Africa continues to record the highest remittance costs globally, averaging between 7.4 and 8.3 percent, due to lingering inefficiencies and policy bottlenecks.
One of the more troubling issues identified is the lack of regulatory cohesion across the continent. According to the report, only 55 percent of African countries currently permit electronic Know-Your-Customer (e-KYC) procedures, forcing financial institutions and fintech firms to duplicate compliance efforts across markets—slowing progress and adding unnecessary costs.
Foreign exchange instability is another major barrier. The report estimates that $5 billion is lost each year due to poor FX liquidity, double currency conversions, and the absence of interoperable digital payment systems. This challenge is compounded by Africa’s continued reliance on offshore U.S. dollar and euro clearing for transactions between African nations. In places like Nigeria, inconsistent forex policies and liquidity shortfalls further deepen the challenge.
Despite these constraints, the report points to a number of promising opportunities to unlock value in the system. Improving interoperability between mobile money platforms could save billions annually, while more robust digital infrastructure—especially API-based systems—would help streamline cross-border payments. Additionally, the adoption of stablecoins and cryptocurrencies has the potential to slash transaction costs by as much as 60 percent and accelerate settlements without the need for traditional foreign exchange channels. The establishment of decentralized African FX exchanges is also presented as a viable path toward reducing conversion costs, stabilizing exchange rates, and enhancing regional trade.
Oui Capital’s report paints a picture of a continent on the verge of a digital payments revolution, but it also offers a sobering reminder that without coordinated reforms and sustained investment, Africa risks falling short of realizing the full promise of its $1 trillion opportunity.