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IOL News
08-07-2025
- Business
- IOL News
Why this fintech founder thinks 'patient capital' is killing African investment
Ethiopia has newly liberalised its financial sector. Image: Fanuel Leul on Unsplash Last month, news broke about Kenya's KCB Group being on track to become the first foreign bank to secure entry into Ethiopia's newly liberalised financial sector. This represents a historic shift ending five decades of state control dating back to the 1974 Derg nationalisation. It's the kind of development that Bernard Laurendeau spent years laying critical groundwork for during his time embedded within Ethiopia's government machinery, though not all his efforts bore fruit. Government whispering After 15 years advising Fortune 50 clients (from Google and Cisco to UAE's Ministry of Finance), Laurendeau returned to Ethiopia in 2019 to serve as senior advisor to the jobs creation commission under the Prime Minister's office. The work wasn't always successful. For instance, a startup act he helped draft "never saw the light of day," he admits, though he declines to elaborate on why it stalled. What did emerge was his theory of "Gov-preneurship": the idea that Diaspora professionals should embed with African governments to transfer knowledge and build institutional capacity. "A lot of the leaders in Africa turned out to be very authentic, very genuine about what they're trying to do for their country, but they're lonely," he explained during a recent African Tech Roundup Podcast conversation. The timing proved fortuitous, if not entirely by design. Laurendeau had spent years watching Japanese companies struggle to decode African markets, relying on outdated World Bank data and Geneva-sourced reports. When Safaricom secured its Ethiopian telecoms licence in 2021, he found himself simultaneously building a fintech company and helping incumbent banks navigate potential mobile money disruption. This dual role raised eyebrows. "People think there was some conflict," he reflects, "but financial services sovereignty was always the goal. We needed to ensure technology transfer, knowledge transfer, and that we're really building institutions." Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. 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Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ Whether by careful positioning or fortunate circumstances, the approach appears to have yielded results. Laurendeau revealed that Arifpay is now poised to issue dividends (a rare milestone for African fintech) on the back of securing partnerships with Safaricom's M-Pesa and, more recently, local heavyweight Nib International Bank. Rather than the mobile money whitewash many feared ahead of Safaricom's (Vodafone) market entry, Ethiopia's payment landscape now features multiple players competing on service rather than regulatory capture. Capital myths But Laurendeau's most contrarian insight targets the "patient capital" narrative that dominates African investment discourse. Having relocated to Tokyo specifically to bring African market intelligence to Japanese boardrooms, he's witnessed firsthand how this positioning backfires. "Investors don't want to think long term," he proffers bluntly. "They can either invest on the stock market, whether in Tokyo or the US, and they have options. So if you tell them, 'Oh, you need to think long term,' that's not the right type of answer." Instead, his firm delivers what he calls "execution horsepower": the project management, policy design, and actionable expert insight that enables rapid decision-making. It's management consulting adapted for emerging markets, where the gap isn't capital but institutional capacity. Unglamourous wins This philosophy extends to his concept of "Gov-preneurship": embedding with governments to build the unglamourous infrastructure that makes everything else possible. Think core banking systems, Bloomberg terminals for local stock markets and payment rails that actually work. The unglamorous foundations that Silicon Valley-inspired entrepreneurs skip in their rush toward "fancy AI machine learning." "We cannot always do the fancy stuff," Laurendeau argues. "We need to do the boring stuff as well—building hospitals, infrastructure, the boring aspect of technology." It's a message that hasn't always landed well with African audiences expecting more inspirational rhetoric. But recent developments suggest the approach has merit. Ethiopia's banking liberalisation required years of policy groundwork, regulatory design, and stakeholder alignment; apparently, the kind of institutional building that Gov-preneurship enables. Quality standards The irony isn't lost on Laurendeau that he's making this argument from Tokyo, having positioned himself in the backyard of companies with 30-year track records of systematic African engagement through Tokyo International Conference on African Development (TICAD) summits. Japanese organisations bring uncompromising quality standards to everything they touch ("there's no such thing as downgrading") while creating superior knowledge transfer opportunities for African partners willing to meet those standards. "Sometimes we see all these new terms (crypto, AI, even entrepreneurship became very trendy)," he observes. "But innovation can make you lazy because it's basically pushing you to not do the mundane." Sovereignty test As KCB prepares its Ethiopian expansion and other regional banks eye similar opportunities, Laurendeau's thesis faces its ultimate test. Can African markets compete on execution quality rather than narrative sympathy? Can governments become genuine partners rather than supplicants seeking patient capital? His own trajectory offers a template for this transition. From mechanical and aerospace engineering at ENSTA France and Georgia Tech to consulting at BNP Paribas, from Silicon Valley big data analytics to Ethiopian policy design, Laurendeau has systematically positioned himself where technical expertise meets institutional need. The approach landed him everything from BBC World Service hosting gigs to Fortune 50 consulting mandates. By that token, it does appear that strategic positioning beats geographic sentiment. The bet now is whether an entire continent can make a similar transition at scale. Andile Masuku is Co-founder and Executive Producer at African Tech Roundup. Image: Supplied
IOL News
27-05-2025
- Business
- IOL News
The wobbly table problem: can Stablecoins fix global payments?
But the question for me isn't whether stablecoins will disrupt his cross-border payments orchestration business model—it's whether that disruption will prove liberating or merely transfer control to new gatekeepers, says the author. Image: flickr We've all been there. You're at a great restaurant, the food is exceptional, the company is sublime, but the table wobbles incessantly. Every time you reach for your drink, it rocks. Every bite of food becomes an exercise in careful coordination. The solution is simple—slide a matchbook under the short leg—but somehow no one ever does it. Instead, we spend the entire evening managing around the dysfunction, accepting the irritation as part of the experience. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ The global financial system suffers from the same wobbly table problem, only instead of disrupting dinner, it's costing African businesses billions and perpetuating economic exclusion on an industrial scale. The matchbook solution might finally be at hand, in the form of stablecoins. But the questions surrounding this fix demand careful scrutiny. $286 billion blind spot The $286 billion (R5.1 trillion) trade corridor between Africa and China represents an enormous market served by infrastructure that treats African businesses as an afterthought. Ola Oyetayo, Nigerian co-founder and CEO of Verto, revealed during a recent African Tech Roundup Podcast conversation that 96-97% of business cross-border payments still flow through traditional banks. It's a statistic that exposes the profound resistance built into global finance. 'Traditional banks have no incentive to fix this,' Oyetayo observed. 'The current system works perfectly well for developed markets. Why would they engineer solutions for markets they've systematically excluded?' This exclusion isn't accidental; it's architectural. Correspondent banking relationships, designed when emerging markets were peripheral to global trade, remain stubbornly unchanged despite those markets' growing centrality to the future of global trade. Banks close on weekends. Settlement periods stretch interminably. Capital controls create regulatory mazes. Since coming out of Y Combinator (YC) in 2019, Verto has grown into what Oyetayo calls a profitable, cashflow-positive fintech company playing across several African markets. The firm recently made waves after bagging the prestigious USD 1 million Milken-Motsepe Prize in FinTech. When asked what prepared him for cross-border payments work, Oyetayo's response was revealing: 'The honest answer is none of those [previous finance] roles. Sometimes the people that end up solving bigger problems are folks that literally fall into it very naively.' Perhaps naivety is required because anyone who truly understands the system recognises that the dysfunction serves specific interests. Deliberate dysfunction The system isn't broken, it's working as intended. Financial institutions operate through closed networks of trust, brand, and credibility built over time. This isn't about competence; it's about control and access. Controlled access. The traditional financial system creates a privilege paradox: markets needing alternative payment solutions most have the least access to infrastructure that makes adoption seamless, while markets with seamless traditional finance have little incentive to adopt alternatives. Walking through the City of London, where Oyetayo built his institutional finance career, you realise how small that world actually is. Yet this small bubble controls trillions in global flows. The exclusion of African businesses from efficient cross-border payments isn't a bug—it's a feature preserving existing power structures whilst extracting maximum fees from those with the fewest alternatives. Enter stablecoins—with strings attached This is where stablecoins become seductive, though not necessarily liberating. Opera's MiniPay has attracted over 7 million wallets across 50+ countries, enabling dollar transfers for less than USD 0.01 in under two seconds. For comparison, traditional remittances in Africa can cost up to 20% of transaction value. Fintech leaders have praised stablecoins for their potential in addressing cross-border payment challenges the world over. However, Oyetayo offers a contrarian insight: 'Stablecoins solve liquidity, volatility, and capital control challenges that banks simply ignore, but there's no case for them in developed markets. People talk about disrupting Visa and MasterCard—I don't see that coming anytime soon.' Stablecoins don't appear to challenge the fundamental architecture of global finance. They do, however, make it more efficient while concentrating control. They address pain points without necessarily tackling power structures, solving immediate problems while potentially creating longer-term dependencies. Mar-a-Lago whispers Behind closed doors, more ambitious theories circulate. The rumoured Mar-a-Lago Accord—described as the strategic foundation of Trump's tariff-led trade policy—could theoretically involve stablecoins to maintain US dollar dominance through a proposed sovereign wealth fund. This theory suggests widespread stablecoin adoption could enable a coordinated global reset, allowing heavily indebted nations to restructure obligations while preserving the dollar's reserve currency status. Foreign holdings of US Treasuries could be converted into long-term bonds, easing fiscal pressures while stablecoins handle commerce flows. Such speculation remains unverified, with no concrete evidence of such coordination. The surveillance premium Stablecoins' efficiency comes with a surveillance premium. In a digital economy where every transaction can be monitored, we're courting scenarios that erode financial privacy and personal freedoms. Traditional cash transactions, for all their inefficiencies, preserve anonymity. Stablecoins enable platforms and governments to map economic relationships and scrutinise financial decisions comprehensively. MiniPay's user-friendly interface, with onboarding via Google or iCloud accounts, simplifies access but raises privacy concerns. The service is built on Celo, a public blockchain where transactions are fully trackable and transparent. While non-custodial, the setup could still enable transaction tracking, creating a potential panopticon where every economic move is visible. Innovator's dilemma Meanwhile, for cross-border payments fintech businesses like Verto, stablecoins represent a Faustian bargain. Their business model navigates the wobbly table of traditional finance, but the stablecoin 'solution' replaces it with one owned by different interests. Oyetayo, an early advocate for stablecoins, remains optimistic. But the question for me isn't whether stablecoins will disrupt his cross-border payments orchestration business model—it's whether that disruption will prove liberating or merely transfer control to new gatekeepers. Opera's MiniPay, by abstracting crypto complexity and focusing on usability, creates a parallel financial system that bypasses traditional infrastructure while fostering dependencies on Silicon Valley platforms and American monetary policy. Price of efficiency What are we willing to sacrifice for stability? Stablecoins might democratise access to global finance, enabling African businesses to participate in international trade without traditional gatekeepers. But they also create sophisticated dependencies, tying emerging markets to dollar-denominated systems controlled by American interests. Both narratives may hold true: stablecoins could solve immediate pain points for African businesses while reinforcing structural dependencies. They might reduce transaction costs while increasing surveillance and control. They might enable financial inclusion while facilitating new forms of exclusion. The matchbook solution is here, promising to stop the table from wobbling. But when we slide it underneath, we might discover we've traded one dysfunction for another—this time, with monitoring capabilities built into every transaction. As African businesses navigate expensive, slow, and unreliable cross-border payments, the promise of sub-cent transfers in under two seconds proves irresistible. But in our rush to fix the wobbly table, we should ask who's designing the replacement—and what they plan to do with all the data it will inevitably collect. Andile Masuku is Co-founder and Executive Producer at African Tech Roundup. Connect and engage with Andile on X (@MasukuAndile) and via LinkedIn. Andile Masuku is Co-founder and Executive Producer at African Tech Roundup. Image: Supplied BUSINESS REPORT Visit:
