Tech ushers in post-oil futures markets

As the world seeks to wean itself off fossil fuels, many oil-dependent countries in emerging markets are using technology and the digital economy to transition to a post-oil transition.

And not only are high-tech industries themselves important contributors to the economy, but the proper application of technology increases efficiency and opportunity in every sector.

For example, the United Arab Emirates (UAE) is often cited as one of the success stories of countries moving away from an oil-dependent economy, and the country seems to be betting heavily on the digital economy.

As one national strategy document puts it, “The future of oil is data.

Related: The increasing role of the UAE as a regional fintech hub

According to another report, the country’s fintech sector alone attracted $234 million in venture capital (VC) investment in the first half of 2022, accounting for 34 percent of all VC invested in the period.

Read more: UAE to attract $700M in investment in H1 2022, positioning it as MENA’s VC capital

This includes some impressive funding, such as a $54 million Series B now secured by buy-back, pay-later (BNPL) provider Tabby, which has since added an additional $150M in loans to its war chest to support expansion across the Middle East. and the North African (MENA) and Gulf Cooperation Council (GCC) regions.

Read: BNPL supplier Tabi gets $150M loan to expand in MENA

Among sub-Saharan African countries, Nigeria is another oil-based economy that is increasingly relying on the digital economy to boost revenue and foreign exchange earnings.

The country’s National Bureau of Statistics recently reported that the information communication sector, which includes telecommunications and information services, has been growing in recent years, surpassing the growth recorded in the oil sector.

For example, in the second quarter of 2022, the sector accounted for 18.44 percent of GDP, while the oil sector contributed a meager 6.33 percent of GDP during the same period.

Like the Emirates, Nigeria has attracted high-value fintech investments in recent years, with the likes of Flutterwave and OPay making headlines for their billion-dollar plus valuations.

Related: Nigeria’s Flutter Wave is valued at $1B at $170M

Also Related: Nigerian payments giant OPI in talks to raise $400 million at $1.5 billion valuation

Last month, QED Investors, a global VC firm specializing in fintech, entered the African market with an investment in Nigerian business payments and banking platform TeamApt.

know more: QED Investors made the first African investment in TeamApt

For these new markets, the digital economy represents a clear opportunity to transition from crude oil to a viable non-oil, modern economy focused on technology and sustaining economic growth at an even rate for years to come.

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A PYMNTS survey of 2,124 US consumers found that while two-thirds of consumers use fintechs for some type of banking service, only 9.3% call them their primary bank.