A few weeks ago, Sayo and I met in Johannesburg with MFS Africa's Founder and CEO, Dare Okoudjou, to record the episode we published this week: Making Borders Matter Less - A Conversation with Dare Okoudjou.

Dare told us something we found incredibly interesting, about what business he thought MFS Africa was getting into, and what business they're actually in now.

We started thinking we’re going after $15 billion intra-Africa remittance market that was being priced at 17, 20%. That was 2014, 15 when the hub started getting traction. What we found now is actually the cross-border trade market that we are servicing. 60% of the users in East Africa told us that they use the service for trade reasons, even if they’re using the P2P that is offered by the M-Pesa in Kenya, MTN in Uganda, Orange in Burkina Faso ...although the most used proposition is in a form of a P2P, originated from one of our mobile network partners on a phone, somewhere terminating on the phone, we know the reason behind this transaction is not migrant workers remittance. It’s trade.

SMEs on the continent are using (and are undoubtedly limited by their use of) consumer tools like P2P mobile money for cross-border trade. It's noteworthy especially in the context of existing data and sentiment surrounding the movement of money within the continent.

If you look at the World Bank's migration and remittance data, you'll notice that most small African countries are net-receivers of remittances. (You'll also notice that the data is annoyingly incomplete for a handful of said small African countries...) The general assumption has always been that these countries are the receivers of remittances from family in the global north.

On one hand, this remittance narrative is no longer accurate. 70% of Africans living abroad are living in other countries on the continent, and 40% of the $50 billion flowed into Sub-Saharan Africa is coming from other parts of Sub-Saharan Africa. (This number, I would imagine, is also quite heavily impacted by the huge volumes - $23 billion - flowing into Nigeria alone.)

And on the other hand, this inflow and outflow data, Dare told us, doesn't necessarily tell the whole story either.

We have to rethink trade routes. And if you actually think trade routes, you see the corridors that are going to emerge. You understand that actually Malawi is not a net receiver. It’s a net sender because it needs to port in Dar es Salaam… you take a country like Benin Republic, it’s a net sender to Nigeria. If you take places like Togo and Benin, there’s so much trade between the two that is so much bigger – if you believe the World Bank remittance numbers, we are doing something like 90% of that market. But if you add trade to it, now it looks more reasonable.

Looking at remittances paints one, generalized picture, about who the sender is and why they're sending money across borders. But knowing that it's actually trade and not migrant remittances paints an entirely different picture altogether.

And it's that market that MFS Africa aims to serve.

Last year, they acquired Beyonic, which provides digital payments solutions to SMEs. And just a few weeks ago, they announced their acquisition of the Nigerian agent network Baxi, which will connect 90,000 agents, in a market with no mobile money, to the MFS Africa hub across 30-plus markets.

How much of what looks like remittances (*cough* or crypto "trading" *cough*) is actually trade? And what happens when we build for these people, providing the proper tooling to make it easier for them to do business with each other across the continent?

We're already given some indications. In a piece on intra-Africa migration, The Economist shares what happens when people can more easily move across borders.

Since 2014, Rwanda, Kenya and Uganda have allowed movement across their borders with just an identity card. Within two years this had increased cross-border trade by 50%, says the Rwanda Development Board, a state agency.

And as we've podcasted and written about, the story of African (fin)tech today is a largely story about enablement and B2B infrastructure, on top of which much more can be built, making it easier and cheaper to transact than ever before.

Africans are sending money across the continent for trade purposes. And the easier it gets the more trade will increase.

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✌️ Justin

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