Digital Financial Inclusion and Digital Financial Literacy in Africa: The Challenges Connected with Digital Financial Inclusion in Africa

The Covid-19 pandemic disrupted the general status quo globally and affected all sectors of the economy. Governments responded to the pandemic with lockdown measures and social distancing requirements as well as encouraged reduced human interaction. Most companies encouraged remote working. The demand and access to cash were reduced and replaced by digital banking, digital transactions, and payments. Digital financial inclusion has thus become a topical global phenomenon as the demand for digital financial services heightened significantly. This increased demand for digital financial inclusion signalled the need for convenient and economical financial products to achieve inclusive and fair economic recovery in the aftereffects of the Covid-19 pandemic. While digital transformation and the Fourth Industrial Revolution are at an advanced stage in developed countries, the African continent is lagging. Much of the population is observed to be digitally and financially excluded. This chapter focuses on digital financial inclusion and digital literacy in Africa. This is because digital inclusion is vital for digital financial inclusion to be achieved, yet digital inclusion is affected by digital literacy. Through a comprehensive literature review, the chapter establishes that digital financial inclusion is important for the empowerment of the population, their financial management, spending, and investment decisions as well as the growth of the economy. It was also evident that digital financial inclusion is far from being attained in Africa due to challenges that include digital exclusion, digital financial literacy, redundancy barriers, lack of connectivity, high Internet data costs, and digital taxes.