By Jean-Pierre Afadhali
Sub-Saharan Africa has the highest levels of global mobile money adoption, mobile transactions increased gross domestic production in the region by more than $150 billion, translating into 3.7 percent between 2013 and 2022, a report released by the global Telecom Industry lobby group, GSMA reveals.
The State of Industry Report on Mobile Money 2024, published on Tuesday shows between 2013 and 2022, the total gross domestic product (GDP) in countries with a mobile money service was $600 billion higher than it would have been without mobile money.
“This is the equivalent of mobile money increasing GDP by around 1.5 percent over the same period,” the report authors explain. “Beyond contributing to financial and digital inclusion, increasing mobile money use has led to higher GDP – particularly among countries in East and West Africa.”
Mats Granryd said in the report’s foreword that for over two decades mobile money services have grown exponentially, driving financial inclusion for billions of people, opening up incredible opportunities for entrepreneurs and small businesses across the world.
“Over the years, Sub-Saharan Africa has been a key driver of mobile money’s success, home to almost three-quarters of the world’s accounts,” Granyrd further added.
According to the latest state of Mobile Money industry report, mobile money adoption and active use continue to grow but at a slower rate than the previous years. Registered accounts grew to 1.75 billion in 2023, a 12 percent year-on-year increase. However, this is a lower annual growth rate than the 15 percent seen in 2022 and 19 percent seen in 2021.
The GSMA study notes Agent networks continued to grow, driven by increased agents in Sub-Saharan Africa. “Compared to 2022, registered agents grew by 22 percent in 2023 to reach 18.6 million, while active agents grew by 14 percent to 8.3 million. These agents were responsible for digitising more than two- thirds of all the money entering the mobile money ecosystem: $307 billion in 2023, 12 percent higher than the previous year.”
GSMA says now west Africa has become a global power house in mobile money adoption. “In 2023, over a third of new registered and active 30-day accounts globally were from West Africa. This was more than any other region with Nigeria, Ghana and Senegal the main drivers of growth.”
The report’s authors saywest Africa’s vibrant mobile money ecosystem has developed differently from East Africa. For instance, the report reveals west Africa has seen more non-mobile-network-operator (MNO)-led mobile money services emerge to compete with MNO- led providers.
The state of mobile money industry notes in 2023, mobile money transaction volumes grew faster than transaction values – leading to a drop in average transaction values. “Transaction values grew year-on-year by 14 percent, lower than the 22 percent increase seen in 2022.”
Similarly, transaction volumes grew at a slower rate in 2023 (23 percent) compared to 2022 (27 percent).
However, transaction volumes grew faster than transaction values. “Mobile money is now used more frequently albeit for smaller transaction sizes across almost all use cases,” notes the report. “Much of the higher-value transactions occurred during the height of the COVID-19 pandemic when the demand for digital transactions was very high.”
Mobile money boosts international remittances
According to the GSMA report international remittances and merchant payments were among the fastest-growing mobile money use cases in 2023. “Transaction values for international remittances grew to almost $29 billion, a one-third increase compared to 2022. Much of this growth was driven by West Africa.”
Merchant payments grew by14 percent, reaching around $74 billion in 2023. Many customers now use mobile money to pay for goods and services: in 2019, one in every ten dollars circulating in the mobile money ecosystem was spent on merchant payments; in 2023, this grew to two in every ten dollars.
The state of the mobile money industry stresses that interoperable transactions continued
to rise, despite a slowdown in growth between 2022 and 2023.
Collectively, bank-to-mobile and mobile-to- bank transactions grew by 15% year-on-year
to $210 billion in 2023, says the report.
“Many mobile money users are making interoperable transactions more frequently, which has led to lower average transaction values.” The report authors explain. “This is due to mobile money providers being connected to an average of 27 banks – around 50 percent more than the previous year.”
Lastly, the report reveals some use cases shrank for the first time: transaction values for both bill payments and bulk disbursements dropped in 2023.
Bill payment transaction values fell by 11 percent to $75 billion, while bulk disbursement values dropped by 1percent to $83.6 billion. Despite this, both use cases saw higher transaction volumes: between 2022 and 2023, bill payments grew by 23 percent, while bulk disbursement volumes grew in 2023 by 10 percent.
“Both these trends were heavily influenced by regulatory changes in Kenya, where bank-to-wallet transaction charges were reintroduced.”
