Do well while doing good
MasterCard’s global CEO and president, Ajay Banga, says the company’s vision and guiding principle is to ‘do well, while doing good’. Meibach feels this is the cornerstone of their success across Africa.
“This influences our approach to conducting business in Africa,” he maintains. “It is thanks to this vision and the implementation of a sustainable business model founded on mutually beneficial partnerships that MasterCard has significantly increased financial inclusion, while growing its business operations across the continent.”
And MasterCard have quickly understood that finding solutions for financial inclusion is not a one-size-fits-all proposition, and cannot be done in isolation. And the key to this has been to strike the right partnerships.
This partnership approach yielded a number of successes in 2013, with MasterCard collaborating with a multitude of public and private partners including governments, telcos, merchants, financial institutions, technology providers, and NGOs to deliver affordable – and interoperable – financial products and services to the mass market.
Another good example of MasterCard’s financial inclusion model in Africa was the Nigerian National Identify Smart Card initiative – the largest formal electronic payment solution in Nigeria and the broadest financial inclusion initiative of its kind on the African continent.
The payments technology company and the Nigerian National Identity Management Commission (NIMC) last year partnered to introduce a new National Identity Smart Card with biometric and electronic payment capability. The collaboration entails the rollout of 13m cards in the pilot phase, and means 12.5% of the population can access secure identity and payment mechanisms.
Once rolled out nationwide, this programme will eventually bring all the adult population in Africa’s most populous country into the financial fold. Combining that functionality with MasterCard prepaid payment capability creates a game changer, as these benefits are all bundled together on a payment card, breaking down one of the most significant barriers to financial inclusion – proof of identity, while simultaneously enabling a citizen of Nigeria to become a participant in the global economy.
Accra tops as “best future investment destination”
Ghana’s capital city has been voted “the African city with the highest potential for inclusive growth”. It is the second consecutive year that the West African port has taken top spot in the MasterCard African Cities Growth Index (ACGI).
Initiated in 2013, the ACGI maps the continent’s economic outlook according to the inclusive urbanisation of its cities. Sets of historical and forward-looking indicators were used to rank the cities’ level of inclusive urbanisation, forecasting potential for inclusive growth.
The 74 cities analysed were organised into three categories by population size: large (over 1m) medium (between 500,000 and 1m) and small (under 500,000). Once ranked, the cities’ growth potential was categorised as high, medium-high, medium-low or low.
“Inclusive growth occurs when the benefits of an expanding economy are widely shared with the population,” explains Dr Yuwa Hedrick-Wong, co-author and chief economist at the MasterCard Centre for Inclusive Growth. “We believe that inclusive urbanisation is a prerequisite for inclusive growth and so the ACGI is a lens through which African cities can be assessed as future investment destinations.”
Accra was top ranked overall and was credited as the only African city with high inclusive growth potential.
“Accra has the legislation, policy and resources in place to increase and sustain economic inclusivity among its citizens,” notes Hedrick-Wong. “This contributes to Ghana’s potential for inclusive economic growth and development.”
Notes co-author of the report, Professor George Angelopulo of the University of South Africa and co-author of the report: “For the second year Accra ranked well across the assessment criteria and received one of the highest government scores. The city is not Africa’s richest or most populous in terms of per capita GDP, but it has made progress towards conditions that are conducive to inclusive urbanisation.”
Angelopulo says that while Ghana as a whole faces macroeconomic challenges, the country has had four successful elections following a peaceful transition of power, in 2000. “The ACGI affirms the importance of advancing and protecting individual freedoms to ensure ongoing economic development,” he reports.
Casablanca (Morocco) and Freetown (Sierra Leone) were ranked second and third in the large city category, both with medium-high inclusive growth potential. This suggests that while cities in this ranking might not currently have the adequate structural foundations or governance for inclusivity, the necessary resources exist for future development.
“Interestingly,” observe the report’s authors, “the large and medium cities with the highest inclusive growth potential are situated predominantly in North and West Africa, while the small cities with the highest rankings are located on Africa’s island states.