Consultant: Special Report on Platform Economies in Africa / Case Study in Nigeria

1. Alliance for Financial Inclusion (AFI)

The Alliance for Financial Inclusion (AFI) is an innovative, member-driven organization that enables policymakers in developing countries to share their knowledge of financial inclusion policies that have delivered tangible results. The network currently comprises about 100 financial policy making and regulatory institutions, e.g. central banks, ministries of finance, microcredit regulatory authority, Insurance Regulatory Authority, from developing and emerging countries. Through providing members with the opportunity for peer learning and supporting technical level knowledge exchange on key aspects of financial inclusion policy, AFI works with its members to influence policy reforms, which results in expanding the reach of quality financial services to the poor.

Within AFI, working groups are the key source of policy developments and trends in financial inclusion and serve as “communities of practice” on key financial inclusion issues. They are the primary mechanism for generating and incubating knowledge in the AFI network and provide a platform for knowledge exchange and peer learning to allow policymakers to share, deliberate and deepen knowledge and understanding on key financial inclusion issues.

2. Project Background and Context

This RFP describes two (2) separate consultancy assignments with independent deliverables, proposals on either or both components from prospective consultant(s) are welcomed.

The expected deliverable per component is as described herewith.

2.1. Component #1: Special Report on Policy Interventions to Drive Platform Economies in Africa
Across the world, digital platforms are considered crucial for industrial modernization and economic development, and especially true in Sub-Saharan Africa, FinTechs and technology-led businesses are increasingly building platforms and ecosystems that present innovating ways to deliver products and services, and more recently digital financial services.

The increasing participation of this non-traditional financial service providers in the financial ecosystem of developing and emerging market economies is obvious, particularly, during the current COVID-19 global crisis, demonstrated ingenuity in facilitating remote and contactless payments, support to citizens in accessing and receiving essential products like groceries and cross border remittances, onboarded small and mid-sized businesses onto digital rails, assisted vulnerable groups with micro-payment and micro-insurance financial products, and even governments with the health crisis through the disbursement of financial support, aid & funds associated with stimulus programmes and, currently leading the way with robust recovery interventions.

Interestingly, with the rise of platform economies in Africa, outcomes such as gig and informal work, efficient delivery systems, remote and seamless payment alternatives, gender sensitive business models, sustainable and green finance initiatives, digital awareness and inclusion and more are observed on the world scene, addressing and mitigating in some measure, the growing record unemployment, dwindling income levels, economic downturn, and cascading impact on the world’s vulnerable population particularly women, rural population, informal sectors and MSMEs from global emergencies such as the COVID-19 pandemic. Platform economies are therefore observed as catalyst for the availability, access, usage and quality of digital financial services, and enablers of digital inclusion, precursors to deepening and sustaining financial inclusion.

China’s promotion of the digital platform economy sits within an ecosystem of major policy initiatives, such as Internet+, Made in China 2025 and China Standards 2035, an effort to standardize cutting-edge technologies, e.g. AI, cloud computing, IoT and big data[1]. The digital platform drive combined with flourishing consumer oriented service platforms such as video-sharing hub TikTok, the e-commerce portal Taobao, Alibaba global ecommerce, payments and SME platform, and Tencent’s payments and financial services WeChat ecosystem, have led to remarkable growth in digital and financial inclusion, economic prosperity to bottom of pyramid populations and sustainable wellbeing to women, the youth and elderly.

A similar narrative can be found on the American continent and Europe, where BigTechs (large technology conglomerates) such as Google, Facebook, Apple, Amazon, Microsoft, PayPal, VISA, Mastercard etc. are shaping the next wave of economic and societal development through several platform rails such as data analytics, payments, sharing-economies, and many more, can the African continent foster, adopt or implement similar approaches to attain digital and financial inclusion?

Similar to the learnings from other part of the world that have attained considerable levels of operationalizing digital platform economies across various sectors of society, can sub-Saharan Africa be the greenfield to replicate and adapt in greater measure lessons from countries such as China and the USA to the context of the jurisdictions within the African continent.

As Fintechs and platform economies are becoming major forces shaping the structure of the financial industry in sub-Saharan Africa, with the new technologies, business models and capabilities presenting a shift in the competitive landscape, potential efficiencies and also vulnerabilities, regulators are increasingly being challenged to deliver policy interventions and ensure the desired level of compliance, supervision and oversight in a plethora of functions and roles, without constraining innovation; from ensuring actors in the ecosystem adhere to regulations regarding market conduct, consumer protection, financial stability & integrity, transparency, AML/CFT measures, reporting, equitable access and usage regardless of gender and so much more.

Delivering on these expectations, particularly in this age of data abundance, digital disruption in the design and delivery of financial services – some of which fall within regulatory grey areas, places an urgency and demand on policymakers to respond faster and more comprehensively.

[1] https://merics.org/en/report/chinas-digital-platform-economy-assessing-d…

2.2. Component #2: Case Study on the role of Digital Financial Services and FinTech in emergency response and recovery to COVID-19 in Nigeria
The COVID-19 global emergency is one of the most testing periods for both developed and emerging market economies. It is evident that small and medium enterprises, labour force in unorganized sectors, gig economy, women, forcibly displaced persons, elderly, youth and poor will be severely impacted through the crisis.

The Central Bank of Nigeria (CBN), similar to several policy makers and regulatory authorities within the AFI network and beyond, pursued a range of regulatory and supervisory measures, leveraging on existing regulatory foundations and new policy interventions, to protect these vulnerable segments, demonstrating digital financial services and fintech innovations as important tools and initiatives to tackle the COVID 19 crisis. Some of which includes:
• Discounts/fee waivers of cash-in, cash-out, merchant payments and remote transactions
• Increase in transaction limits
• Awareness, financial and digital education initiatives
• Advisories to sanitize banking/agency/ATM and other channels
• Additional security measures to ensure resilience of digital payments infrastructure
• Measures to support tiered and proportional KYC and customer onboarding process
• Facilitation of digitization and remote payment mechanisms for disbursement of government subsidies, cash transfers, supply chain payments, small business payments and other types of bulk payments.
The case study must also evaluate the impact of the pandemic and the response from the regulator on women and youth across Nigeria.

3. Objectives

3.1. Component #1: Through the support of the AFI management unit, the consultancy is to develop undertake a comprehensive research on the presence, participation, impact, contributions, challenges, and potential for platform-based business to support and accelerate financial inclusion on the African continent.

Expected outcome is a comprehensive report highlighting ley learnings, insights and possible policy interventions, recommendations, and considerations for financial regulators in developing, emerging and transitioning economies in Africa to support, nurture and drive robust and inclusive digital economies with the active participation, operation and collaboration with platform-based businesses.

3.2. Component #2: With the support of the AFI management unit, the consultancy is to develop a case study on the Central Bank of Nigeria (CBN) actions from a policy, regulatory and action facilitation lens in responding to the global pandemic of COVID-19 particularly via digital financial services and FinTech and it’s approach using the robust levers to recover from the COVID-19 pandemic.

4. Scope of Work

4.1. Component #1: Special Report on Policy Interventions to Drive Platform Economies in Africa
To document in a report the outcome of a sub-Saharan Africa landscape diagnosis and analysis of the state of FinTechs and technology-led businesses, including the evolution and enablers of platforms economies and digital ecosystems, particularly distilling the role of policy interventions from financial regulators and authorities that accelerate growth in digital and financial inclusion on the continent.

Drawing from global examples as seen in China, the US and Europe, the special report should also provide comprehensive insights that will allow regulators and members of the AFI network move from their current state of supervision and oversight of platform economies actors and enablers to a future state that supports innovation, digital and financial inclusion without compromise to financial system and market stability, integrity, and transparency and particularly, consumer protection.

This special report should cite different use cases and countries experiences drawn from the AFI network within sub-Saharan Africa and beyond that provide key insights and recommendations that can shape regulatory approaches, policy interventions and promote a supervised and deliberate development of platform economies for equitable digital and financial inclusion.

The expected scope of work under this consultancy include:
• Preliminary consultations with AFI management unit on the scope, expected deliverables and related timelines.
• Review existing literature on policy interventions on platform economies, Fintech regulations and supervision, digital economies and technology-led service providers and any other relevant resource related to platform economies and specifically pertaining to financial services with a view to contextualize it to fintech and financial inclusion perspective.
• Identify and interview (or draw insights) key countries from sub-Saharan Africa and advanced country perspective to document best practices on policy interventions to support and accelerate platform economies.
• Develop outline of the special report along with key contours of key insights, proposed policy intervention considerations and/or recommendations.
• In consultation with AFI, conduct telephonic interviews with a broad range of relevant stakeholders. Regulatory interviews will include AFI member and non-member countries with evidence of policy interventions supporting and accelerating innovations attributable to platform economies. Further, interviews would also cover other stakeholders such as fintech providers and platform ecosystem enablers e.g. Alipay, VISA, Grab, Google, Facebook, Jumia, etc, academia, think tanks and research institutions, international development organisations etc. A total of 12-18 interviews may be conducted as part of this process. Where possible, AFI will assist in setting up the interviews.
• Collect feedback, guidance and recommendation from AFI members and other stakeholders.
• Prepare first draft of the special report based on literature review and inputs from telephonic interviews. Review of the draft guideline will be conducted by the AFI management unit, selected AFI members and stakeholders.
• Submit a final version of the special report by agreed timeline as indicated in the consultancy agreement (date indicated in December 2020) along with a summary PowerPoint presentation.

The final draft of the special report should provide:

o Analysis and recommendations of policy intervention principles will need to be very focused to look at key essential and enabling perspectives from digital financial services/fintech and financial inclusion perspective.
o Analysis and recommendations on policy intervention principles will consider perspective of various vulnerable segments related to gender, youth, and forcible displaced people etc.
o Analysis and recommendations on policy intervention principles will consider aspects of emergency response, especially in relation to the ongoing COVID-19 pandemic.
Note: This assignment is expected to be mainly desktop-based research of existing and extensive literature and information on the subject, with qualitative insights, data and validations from a regulatory perspective delivered through interviews supported and facilitated by the AFI management unit. It is our expectation that this is reflected in a proportionate financial proposal for this assignment.
4.2. Component #2: Case Study on the role of Digital Financial Services and FinTech in emergency response and recovery to COVID-19 in Nigeria

Following the AFI network ethos of peer learning and knowledge sharing, this assignment requires the development of a case study capturing the policy landscape related to DFS and FinTech in Nigeria prior and necessary to support the regulatory response to the COVID-19 emergency, detailing key insights, learnings and challenges associated with the implementation, approach, actions and any other measures adopted by CBN to mitigate the negative impacts of the global emergency. The case study should show clear linkages to digital and financial inclusion and how the regulator actively ensured agility, security and resilience in its financial system and infrastructure, and finally, how it intends to navigate a path towards recovery and the sustained gains delivered through digital financial services and FinTech innovations.

The expected scope of work under this assignment include:
• Preliminary consultations with AFI management unit and CBN on the scope, expected deliverables and related timelines.
• Review existing policies, regulations and directives promoting digital financial services, FinTech and other literature specifically pertaining to financial services with a view from the FinTech, women, youth and financial inclusion perspective.
• Develop outline of the case study along with key contours of the landscape, the response, learnings, outcome, and next steps towards sustained digital and financial inclusion post COVID-19.
• In consultation with AFI and the CBN, conduct telephonic interviews with regulators and other important stakeholders. Where possible, AFI and the CBN will assist in setting up the interviews.
• Collect feedback, guidance, and recommendation from AFI management unit, CBN and other stakeholders.
• Prepare first draft of the case study based on comprehensive literature review and inputs from telephonic interviews. Review of the draft case study will be conducted by the AFI management unit, CBN and select stakeholders.
• Submit a final version of the case study by agreed timeline as indicated in the consultancy agreement (date indicated in December 2020) along with a summary PowerPoint presentation.

The final draft must clearly present:

o Analysis and identification of existing policy and regulatory interventions from digital financial services/fintech and financial inclusion perspective that were pivotal and enabling to the comprehensive response to COVID-19 in Nigeria
o Analysis and identification of the role of stakeholders and ecosystem actors in implementing the response and ensuring its success from the perspective of various vulnerable segments related to gender, youth, and forcible displaced people etc.

5. Timelines

The assignments reflected in Component 1 & 2 is anticipated to follow the same timeline, commencing in February 2021 with completed deliverables submitted by April 2021.

Specific timelines for each component will be discussed and agreed with the successful consultant(s) and the AFI management and reflected in the workplan adopted for the project.

Note: Consultant(s) applying to both components should kindly clearly indicate their capacity and capability to work simultaneously on both components

During the assignment, the AFI MT will closely support the consultant by providing technical support, guidance and contributions in shaping the deliverable, facilitating interviews with relevant regulator(s), partners and strategic stakeholders, and providing inputs to deliverables.

6. Travel

No travelling is expected in this assignment.

7. Consultant Experience

• Advanced university degree in social science, international economics, development finance or other related field.
• 8+ years of professional experience in broad financial regulatory and policy interventions, digital financial services and financial technology, financial regulation for DFS and Fintech, digital economy, platform ecosystems and transformation, AML-CFT, public policy, financial inclusion and international development.
• Sophisticated understanding and experience in analyzing the issue of regulatory oversight and supervision around financial inclusion, stability, integrity, and consumer protection through the lens of growing digital technology.
• Experience working directly with central banks on policy development and implementation, preferably in regulatory oversight, supervision, reporting and enforcing policies and mandates.
• Knowledge of potential technological solutions for regulatory and supervisory technology (e.g. FinTech and RegTech applications) and their linkages to deepen financial inclusion.
• Excellent oral, writing and presentation skills in the English language is compulsory.
• Previous experience writing is desirable.

8. Reporting

Throughout the contract period, the Consultant will be reporting to AFI’s Policy team for Digital Financial Services and FinTech. The contract will be with the individual consultant or consulting firm with specific names of the team member(s) that would be working on the assignment.

9. Criteria for Evaluation

1. Academic Qualification; 10%
2. Experience and competence of the key staff for the assignment related; 50%
   • Adequacy for the assignment 30%
   • Regional/Global experience 20%
3. Adequacy of the proposed work plan and methodology in responding to the Terms of Reference; 20%
   • Technical approach and Methodology 10%
   • Workplan 10%
4. Sample work – Relevance to Assignment and demonstrated experience in writing; 20%