Mobile money growth in Sub- Saharan Africa imminent, say reports
Findings in separate reports released by the IMF, World Bank and GSMA support the notion that mobile money growth in Sub-Saharan Africa will increase substantially in the next five years.
Growth is expected from mobile-enabled platforms that will increasingly disrupt traditional value chains across the region.
The number of registered mobile money accounts in Sub-Saharan Africa is 395.7 million as at 2018 represents almost half of total global accounts, according to GSMA’s The Mobile Economy Sub-Saharan Africa 2019 report. The number of accounts is expected to increase to over 600 million by 2025.
Improvements in productivity and efficiency due to increased take-up of mobile services will bring mobile’s contribution in SSA to almost US$185-billion (9.1% of GDP) by 2023, up from current US$144.1-billion – especially in high-growth markets like Nigeria and Ethiopia where subscriber addition is expected to be concentrated.
The World Bank states that Nigeria is the largest remittance-recipient country in Sub-Saharan Africa and the sixth largest among low and middle income countries. It has reportedly received more than US$24.3-billion officially in 2018, an increase of over US$2-billion compared to 2017.
Nearly 9 in 10 registered mobile money accounts are in East and West Africa, according to GSMA. West Africa, which leads mobile subscriber penetration, is home to most of the countries with the highest remittances as a share of their GDP: The Gambia, Cabo Verde, Liberia, Senegal, Togo, Ghana, and Nigeria.
Remittances to the region is expected to continue to increase, albeit at a lower rate, to US$51-billion by 2020 after reaching an estimated US$48-billion in 2019, from US$46-billion in 2018.
It will coincide with an increase in the 23% of the region’s population (about 239 million people) that currently use the mobile internet on a regular basis and smartphones – which currently account for 39% of mobile connections – increased to two-thirds of connections.
Telcos are also expected to invest an estimated US$60-billion on network infrastructure and services by 2025 as the mobile economy supports more than 3.5 million jobs.
According to an IMF report The Rise of Digital Money, e-money is being readily adopted, driven by convenience, integration with social media, faster and cheaper cross-border transfers and efficiency.
The IMF has identified certain risks associated with rapid e-money adoption including impacting privacy, monetary policy transmission, market contestability (the emergence of large monopolies), financial integrity as well as policymaking in general, in the event of data loss.