W’Africa lags behind in mobile money revolution

COUNTRIES in the West African region are lagging behind their peers, especially those from the East African region in terms of adoption, development and usage of mobile money platforms, a new report has confirmed.

   Today, West Africa, which is home to 18 countries including Nigeria, Ghana; Sierra Leone; Mauritania, Benin; Mali, has over 301.6 million population compared to East Africa with eight countries including Kenya, Tanzania, Ethiopia, Eritrea with about 201.9 million population.

   The arguments of experts had been that with the huge population the Western region commands and the accelerated adoption of mobile phone, penetration of mobile money should be huge.

   For instance, Nigeria alone has about 136 million active telephone users, with 98 per cent banking on the mobile technology to communicate, but ironically, adoption of mobile money, which thrives on the mobile technology has been low. This has become a huge concern for operators in the region.

    But a report by Mondato, a mobile financial services industry research and advisory company, with its head office in Washington DC, USA, disclosed that East Africa has recorded significant growth and uptake of mobile money platforms, largely propelled by expanding usage in Kenya and Tanzania among other countries in the region.

  However, Mondato noted that West African countries have been slow to seize the opportunity presented by mobile money.

   “Ghana is the regional star pupil, but up till now the ecosystem was confounded by a quixotic regulatory environment. Nigeria … has a huge addressable market and a large number of mobile money deployments, but low levels of adoption and usage have continued to dwarf growth,” the report noted.

    According to the report, Sierra Leone and Liberia which suffered outbreaks of Ebola last year managed to capitalise on mobile money revolutions and increased usage of such platforms in deploying financial assistance volunteers, aid workers and others involved in the fight against the outbreak of the deadly epidemic.

  “Sierra Leone and Liberia have, however, learned from observing the experience of these countries (in West Africa), and just last May, Liberia promulgated a new set of mobile money regulations designed to loosen banks’ grip on mobile financial services and encourage a market-led growth in the ecosystem, just in time to allow mobile money to play a greater role in the response to the Ebola outbreak.”

   The report said more than 16 000 Ebola response workers received ‘danger money’ payments through mobile money in 2014.

   Mondato added that there was even wider scope for growth in mobile phone usage in the three countries that were affected by Ebola last year.

   “Barely three out of five Guineans or Liberians have a mobile. In Sierra Leone, that number drops below half, and all three countries lie in the lowest docile of the 187 countries ranked on the United Nations’ Human Development Index,” it said.

    Indeed, reports from a poll conducted by Nigerian opinion poll and research organization NOI showed that 59 per cent of Nigeria population of more than 160 million is unaware of mobilemoney, while 13 per cent of those aware of mobilemoney currently use it and 71 per cent of non-users said they could consider using mobilemoney service in the future.

   The poll also stated that analysis was based on geo-political zone as it related awareness levels of mobilemoney in Nigeria vary in different regions.

   So basically, analysts are of the opinion that mobilemoney needed time to nurture into the peoples’ daily lifestyle and that the mentality has to change in other to embrace this welcome development because it was a fact that a typical Nigerian has no trust for the system.

   Nigeria needed at least 250,000 agent locations to proliferate and go to scale.

   However, analysts believed that if government can introduce basic forms of mobilemoney education into schools, if sensitization and awareness level on mobilemoney increases in the economy and also if competitions amongst the mobilemoney licensees become steep, then Nigeria will take the world by storm.

   However, on a positive note, mobilemoney brings promising opportunities for financial inclusion. The provision of financial services to over 100 million regarded as unbanked, would lead to a higher standard of living and an improved social equity including a veritable vehicle in tackling the cankerworms of corruption in the society.

   The unbanked can make use of the opportunity to save, borrow money to pursue business opportunity and transfer funds efficiently and effectively.

    From the business perspective, financial inclusion is an opportunity to expand the financial service market and build a viable long-term goal. However, for a better financial inclusivity, market observers opined that stakeholders need to invest more on service delivery and weaning process by encouraging branchless banking whereby agents will be rewarded for providing mobile financial services which will drive a controllable traffic of transactions.

     It also important where government and non-governmental agencies and the private sector embrace mobile money as a means of salary payments for its staffs, the cash-lite policy of the CBN would have gained a major boost and patronage.