By Ajong Mbapndah L *
In the bustling markets of Dakar, the sprawling commercial districts of Abidjan, and the dusty town centers of Lomé and Niamey, money rarely changes hands the way it once did. Instead of bundles of cash, traders and customers increasingly rely on mobile phones—tapping, dialing, or scanning to send and receive money in seconds.
This quiet shift has reshaped daily life across West Africa. What began as a basic tool for small peer-to-peer transfers has evolved into one of the most powerful financial transformations the region has ever experienced. Mobile money has become infrastructure: a banking system without bank branches, serving millions who were once locked out of formal finance.
According to the GSMA, the global association representing mobile network operators, mobile money surpassed two billion registered accounts worldwide in 2024, with more than 500 million monthly active users. That same year, global mobile money platforms processed 108 billion transactions worth about $1.68 trillion. Sub-Saharan Africa accounted for nearly 82 billion of those transactions—roughly three-quarters of all global mobile money activity—underscoring the continent’s central role in digital finance.
Within Africa, West Africa has emerged as one of the fastest-growing and most deeply embedded mobile money regions, not simply because of new accounts, but because of how extensively these services are woven into everyday economic life.
Across the West African Economic and Monetary Union (WAEMU)—which includes Senegal, Côte d’Ivoire, Niger, Togo, Benin, Burkina Faso, Mali, and Guinea-Bissau—mobile money has moved decisively from the margins to the mainstream.
Regional data published by Sika Finance, citing WAEMU banking authorities, shows that the total value of mobile money transactions in the bloc more than doubled in 2023, rising to 171,959 billion CFA francs (around $285 billion) from about 69,806 billion CFA francs the previous year. These volumes reflect how deeply mobile money now underpins trade, remittances, retail commerce, and household finances.
Financial inclusion has expanded in parallel. GSMA data indicates that inclusion rates across WAEMU climbed from about 56 percent in 2018 to more than 70 percent by 2022, driven largely by the spread of mobile wallets. For millions of people, the first formal financial account they ever held was not a bank account, but a mobile phone number.
Few countries illustrate this transformation more vividly than Côte d’Ivoire, now regarded as one of West Africa’s digital finance powerhouses.
According to figures cited in the GSMA State of the Industry Report and summarized by African Exponent, Côte d’Ivoire has more than 28 million registered mobile money accounts, with over 13 million active users. In 2024, the value of mobile money transactions exceeded 85 trillion CFA francs—approximately $140 billion—rivaling the output of entire formal sectors of the economy.
Mobile money now underpins daily commerce, from market purchases and transport fares to salary payments, utility bills, school fees, and micro-credit disbursements. Analysts increasingly describe it not as a parallel financial system, but as the backbone of informal and retail commerce.
In Senegal, the story is equally striking. Over the past decade, registered mobile money accounts have expanded from roughly seven million to more than 38 million, according to data compiled by Ecofin Agency and GSMA sources. Penetration now exceeds 200 percent of the population, reflecting the widespread use of multiple wallets by individuals and businesses.
More importantly, mobile money has become a measurable pillar of the national economy. GSMA estimates indicate that mobile money contributed nearly $6 billion to Senegal’s GDP in 2023, equivalent to about nine percent of total economic output. For many Senegalese—particularly in rural areas and informal urban communities—mobile wallets function as primary financial tools, channeling wages, remittances, savings, and everyday purchases through phones rather than cash.
In Niger and Togo, where bank branches are sparse and incomes are often informal or seasonal, mobile money serves as a lifeline rather than a convenience. Digital wallets provide safe storage, enable domestic remittances, and facilitate payments for essentials such as food, transport, healthcare, and school fees. GSMA regional studies consistently show that in such environments, mobile money improves household resilience to economic shocks and strengthens women’s financial participation. In these markets, mobile money is not replacing banks—it is replacing exclusion.
The significance of mobile money goes far beyond transaction volumes. It has lowered transaction costs, reduced the risks associated with carrying cash, and allowed small businesses to operate more efficiently. It has also catalyzed wider fintech innovation, from micro-savings and insurance products to digital credit and cross-border remittances, laying the foundation for more sophisticated digital financial ecosystems.
Yet as mobile money volumes soar, so too does government interest in tapping this digital bloodstream for revenue. Under mounting fiscal pressure and constrained tax bases, policymakers across West Africa are exploring ways to tax the very transactions that have powered inclusion.
In Senegal, a levy of up to one percent on mobile money transactions has become the clearest expression of this new approach. Supporters see it as a practical step toward domestic revenue mobilization. Critics see something more fragile at stake.
The concern, legal experts argue, is not taxation itself, but where and how the burden is placed. Samba Diouf, a legal expert in digital regulation, cautions that policy missteps could unintentionally weaken one of the region’s most dynamic innovations.
“Across the region, governments would benefit from working more closely with operators and fintech companies that have demonstrated remarkable creativity in delivering financial services at scale. An indirect tax on consumers remains deeply uncertain in such a context, particularly when operators retain the flexibility to shift their focus toward other market niches, ” Samba argues.
His warning goes to the heart of the debate: tax the transaction, and you may shrink the transaction. Industry groups warn that transaction-based levies fall heaviest on low-income users making frequent small payments—the market women, motorcycle taxi drivers, and informal workers who rely on digital wallets daily. Reporting by Ecofin Agency has highlighted fears that higher costs could discourage usage, slow adoption, and quietly push transactions back into cash.
GSMA research across multiple African markets suggests these risks are real. Transaction-level taxes often lead to reduced mobile money activity, especially among poorer users, weakening digital ecosystems and undermining long-term inclusion goals. As one GSMA policy brief bluntly put it, taxing mobile money at the transaction level is effectively taxing poverty.
Many experts argue that alternative approaches—such as taxing provider profits, platform revenues, or broader digital value chains—are less distortive and more sustainable, allowing governments to raise revenue without eroding one of the region’s most successful financial innovations.
West Africa now stands at a crossroads. Mobile money is no longer a peripheral innovation; it is embedded in the region’s economic fabric, supporting trade, strengthening household resilience, expanding women’s participation, and contributing billions of dollars to national GDPs.
The policy choices made today will determine whether mobile money continues to drive inclusive growth—or stalls under the weight of short-term fiscal pressures.
For millions across West Africa, the mobile phone is more than a communication tool. It is a wallet, a bank, and a bridge to economic participation. Protecting the accessibility of mobile money is therefore not just a regulatory decision—it is a development imperative.
*Culled from Feb edition of PAV Magazine
