Fastest growing economy in Africa? Please add fastest growing mobile money market to that list. It’s clear that Ghana’s economy is currently enjoying a new lease on life. World Bank data reveals that Ghana has earned this new status with registered accounts increasing six-fold between 2012 and 2017.
At the heart of this growth is the blossoming of mobile financial services which have thrived courtesy of poor services from the traditional financial sector. And guess what! The case is not different across Africa.
Reduced length of transaction, risks, and cost have also helped mobile financial services thrive. But before all of these factors, the primary factor remains the explosive mobile phone penetration rate in Africa.
The success was built on right initiatives
About 128% of Ghana’s population have access to mobile-money services, including the rural areas. Perhaps even more important is that Ghana’s success is the product of a right mix of consumer-driven practices and a favourable regulatory environment for the industry, built on the back of early infrastructure investments.
The revised 2015 e-Money Issuer Guidelines shifted to a more flexible approach that allowed new players in the provision of financial services and more scope for experimentation.
But where is all the money going to?
Ghanaians have primarily used mobile money services in transferring funds from person-to-person. Bank of Ghana data, shows that the total value of all mobile money transactions reached 156 billion GHS ($29 billion) in 2017, compared to 35 billion GHS ($6.5 billion) in 2015.
So far but still a long way to grow
Ghana gradually continues to expand what Ghanaians can do with their mobile wallets, however, there’s still a lot to be done.
- Finding a way to digitize government collections and utility payments, government-to-people (G2P) and vice versa. They are still mainly paid in cash.
- Many of its mobile money users are not financially literate and sometimes fall victim of predatory practices. Going forward, the consumer-protection agency needs to keep the activities of service providers in check.