Back in 2013, M-Pesa, Africa’s largest mobile money platform, faced a significant obstacle—its system couldn’t support instant payments for critical services like insurance and banking. For instance, payments to Kenya Power took two days to process, while contributions to the National Hospital Insurance Fund often took up to three days. A key issue was the platform’s limited capacity of 200–300 transactions per second, far below the requirements for seamless operations.
To overcome this bottleneck, M-Pesa, owned by Vodacom and Safaricom, sought help from Chinese tech leader Huawei. Over 18 months, Huawei upgraded M-Pesa’s infrastructure, enabling the platform to accommodate its 12.8 million active users more efficiently.
Fast-forward eight years, M-Pesa now serves 50 million users across seven African nations, including Kenya, Tanzania, Lesotho, Ghana, Mozambique, Egypt, and the Democratic Republic of Congo. The platform processes over a billion transactions each month. Additionally, Huawei worked alongside Beijing Murong Technology, a Chinese software firm, to integrate innovative features into M-Pesa’s ecosystem.
Leveraging Success: TeleBirr’s Rapid Growth
Building on M-Pesa’s achievements, Ethiopia’s state-owned telecom provider, Ethio Telecom, partnered with Huawei to develop TeleBirr, the country’s first mobile money platform. Launched in May 2021, TeleBirr quickly attracted six million users within its first two months, catering to Ethiopia’s vast population of 115 million.
Huawei’s contributions to mobile payment solutions now extend to 19 African countries, reflecting its strategic expansion from traditional telecom infrastructure to advanced digital ecosystems. This success has encouraged Huawei to establish a research and innovation center in Tunisia to further its role in North Africa.
A Broader Trend: China’s Growing Digital Footprint in Africa
The success of M-Pesa and TeleBirr underscores a broader movement—China’s shift from physical infrastructure projects like roads and bridges to building Africa’s digital backbone. Africa’s young, fast-growing population, projected to reach 1.7 billion by 2030, presents a prime opportunity for Chinese investors. With half the population still unbanked and internet penetration under 40%, the potential for growth in financial inclusion and connectivity is immense.
Chinese Tech Companies: Cornerstones of African Innovation
Chinese firms like Huawei and ZTE have been integral to Africa’s tech ecosystem since the 1990s, stepping in when Western interest waned. This involvement has yielded tangible results. For instance, Transsion, Africa’s top phone manufacturer, dominates the market with brands like Tecno, Infinix, and itel, many of which come preloaded with apps like PalmPay.
PalmPay, a digital payments platform backed by a $40 million investment led by Transsion in 2018, provides services such as money transfers and bill payments in Nigeria and Ghana. Similarly, Huawei’s collaboration with Alipay resulted in VodaPay, a super app aimed at fostering financial inclusion in South Africa.
Wapi Pay, a fintech startup facilitating Africa-Asia cross-border payments, also utilizes Huawei’s mobile money solutions, reflecting the reliance of African fintech on Chinese technology.
Challenges and Concerns
Despite its contributions, the expanding presence of Chinese companies in Africa has sparked debates about data security and monopolistic practices. Critics point to concerns over Huawei’s ties to the Chinese government and the potential misuse of African data. These issues are exacerbated by the lack of robust data protection laws across much of Africa.
Some experts argue that while Huawei’s data practices remain opaque, its products are cost-effective and tailored to Africa’s needs. This affordability leaves African nations with limited alternatives. For many, the choice isn’t between Huawei and other providers like Nokia or Ericsson but between Huawei and having no solution at all.
The Future of Competition
Africa’s fintech sector still has significant room for growth, with less than 50% of the population owning mobile phones compared to higher global averages. However, some analysts warn that China’s long-term approach to digital and physical infrastructure could make it difficult for competitors to break its dominance.
Over the last decade, Chinese technology has been pivotal in advancing Africa’s digital landscape. While this partnership has brought immense benefits, it also raises concerns about the potential risks of over-reliance on a single player. The challenge ahead lies in balancing innovation with regulatory oversight and fostering a competitive ecosystem.
