As many living in the continent continue pondering on the often repeated statement that “Africa is rising”, a new report indicates that it one specific sector, it is.
The research carried out by American firm Boston Consulting Group (BCG) found out that Ghana and Kenya have the second and third highest mobile payment usage in the world, after China. Both nations contributed a huge chunk to the value of global mobile financial services transactions in 2020, which it estimated to be between $15 trillion and $20 trillion.
The study titled “Five Strategies for Mobile-Payment Banking in Africa,” found that 87% of Kenya’s GDP is held in transactions via mobile wallets and phones and 82% in Ghana. The World Bank has recognized Ghana as the fastest growing mobile money market in Africa over the last five years.
Mobile money itself is not an indicator of economic prosperity. In fact, experts say that these systems only became popular because of the slow, tepid nature of traditional banking in developing countries.
Sub-Saharan Africa accounted for 43% of all new mobile money accounts, according to the GSM Association. More than half of such accounts are in Africa, which has been the fastest-growing region for mobile phone growth for several years.
Registered mobile money accounts in Africa grew 12% to 562 million in 2020, while monthly active accounts were 161 million, an 18% increase, the report found. Total transactions hit 27.5 billion (up 15%) valued at $495 billion (up 23%). The continent has 171 active mobile money services.
Global daily transactions exceeded $2 billion for the first time. They are expected to pass $3 billion a day by the end of 2022.
In Kenya and Ghana, the mobile payment sector has vastly matured compared to the rest of the continent. However, transaction charges tend to be higher than traditional banks.
For more progress especially on digital payments, central banks need to remove a number of regulatory and network bottlenecks that threaten to kill innovations in this industry.