The Current State of Europe’s Economic Growth
Europe possesses a strong workforce, political stability, and a single market, yet economic growth remains stagnant with only an estimated 0.5% growth in 2023, as reported by the European Commission.
Challenges and Opportunities in Building Relationships with Frontier Markets
Europe’s long-term economic prospects rely not only on intra-European initiatives but also on fostering relationships with rapidly expanding frontier markets like Africa. However, historical imbalances in international interactions hinder regulatory and fintech connections with these markets, posing obstacles for European businesses to scale and vice versa.
Outdated Practices:
- Regulatory Arbitrage: European businesses face challenges in expansion due to unfamiliar regulations in new markets. Obtaining licenses, maintaining them, and securing banking services become complex without adequate knowledge and connections.
- Financial Connections: Challenges in foreign exchange pricing and payment structures impede European businesses from effectively operating in African markets. Improved integrations with African fintech companies can enhance pricing and payments reliability.
Initiatives for Sustainable Growth:
- Regulatory Clearances: Encouraging European businesses to adapt to diverse regulatory environments through better support systems and guidance for market expansion.
- Financial Integration: Strengthening partnerships between European banks and African fintechs to streamline currency exchange and payment processes, facilitating smoother business operations.
Addressing these challenges and embracing collaborative efforts between Europe and frontier markets can pave the way for sustainable economic growth and increased opportunities for businesses on both sides.
Elizabeth Rossiello is the Founder of AZA Finance, a pioneering EU/Africa fintech company. At Euronews, we value diverse perspectives. Contact us at [email protected] to contribute to the conversation.
