Mobile money growth in Sub-Saharan Africa is expected to increase substantially up to over 600 million by 2025, according to findings by the IMF, World Bank, and GSMA, in a way bound to disrupt traditional value chains across the region.
As of 2018, the number of registered mobile money accounts in Sub-Saharan Africa is 395.7 million, representing almost half of total global accounts, as projected in The Mobile Economy Sub-Saharan Africa 2019 report by GSMA.
Improvements in productivity and efficiency due to increased take-up of mobile services will bring mobile’s contribution in SSA to almost US$185-billion (9.1% of GDP) by 2023, up from current US$144.1-billion – especially in high-growth markets like Nigeria and Ethiopia where subscriber addition is expected to be concentrated.
Nigeria is the largest remittance-recipient country in Sub-Saharan Africa and the sixth-largest among low and middle-income countries, the World Bank states. It has reportedly received more than US$24.3-billion officially in 2018, an increase of over US$2-billion compared to 2017.
According to GSMA, nearly 9 in 10 registered mobile money accounts are in East and West Africa. West Africa, which leads mobile subscriber penetration, is home to most of the countries with the highest remittances as a share of their GDP: The Gambia, Cabo Verde, Liberia, Senegal, Togo, Ghana, and Nigeria.
Remittances to the region are expected to continue to increase, albeit at a lower rate, to US$51-billion by 2020 after reaching an estimated US$48-billion in 2019, from US$46-billion in 2018.
It will coincide with an increase in the 23% of the region’s population (about 239 million people) that currently use the mobile internet regularly and smartphones – which currently account for 39% of mobile connections – increased to two-thirds of connections.
Telcos are also expected to invest an estimated US$60-billion on network infrastructure and services by 2025 as the mobile economy supports more than 3.5 million jobs.
According to an IMF report The Rise of Digital Money, e-money is being readily adopted, driven by convenience, integration with social media, faster and cheaper cross-border transfers and efficiency.
The IMF has identified certain risks associated with rapid e-money adoption including impacting privacy, monetary policy transmission, market contestability (the emergence of large monopolies), financial integrity as well as policymaking in general, in the event of data loss.