There are now over 184 million active mobile money wallets in Africa
Africa is in the news again as it now accounts for 70% of the world’s $1 trillion mobile money value. This is according to a publication by Quartz Africa which reports that the value of Africa’s mobile money transactions spiked by 39% to $701.4 billion in 2021 from $495 billion in 2020.
Deduced from GSMA’s or Global System for Mobile Communications figures, In the review period, registered mobile wallets in Africa topped 621 million, a 17% increase from 562 million captured in 2020.
Still on the report, Africa now has over 184 million active mobile money wallets on the continent compared to 161 million accounts just over a year from the previous report.
Africa due to its peculiarities like a long distance to a bank has now become a major driver of mobile money with an ecosystem rapidly diversifying as is the rest of the world, from business-to-consumer (B2C) to Business-to-business (B2B).
2021 saw the mobile money industry become instrumental in helping small businesses operate more efficiently and improve the customer experience.
Most notably, mobile money-enabled merchant payments in an outstanding run almost doubled in value from 2020, reaching a global average of $5.5 billion in transactions per month.
It is pertinent to state that the pandemic was also pivotal to Africa embracing mobile money banks as conventional banks were under lock and key, pushing the mobile money market to the $1 trillion value.
Here are what Ashley Olson Onyango, Head of Financial Inclusion, GSMA has to say on Africa’s impressive run,
“As a result, businesses and individuals alike have benefited from this fast-paced digitization of payments, unlocking access to more products and services, building financial resilience, and bringing about commercial opportunities,”
“A key feature of the industry’s progress in the past years has been mobile money’s rapid diversification beyond its key traditional use case: person-to-person transactions (for example transferring money to family and friends),”
Contributing Regions
- Transaction values grew fastest in the Middle East and North Africa (49%), sub-Saharan Africa (40%) and Latin America and the Caribbean (39%.)
- In 2021, Ethiopia saw the launch of a mobile network operator (MNO)- led mobile money service, and the Central Bank of Nigeria granted Approval in Principle to leading MNOs to run mobile money services in the country.
- As an overview in 2021 in its entirety, Africa grew by 68%, followed by Latin America and the Caribbean (34%) and East Asia and the Pacific (23%.)
The rest of the report reads,
“In 2021, as in past years, the vast majority of new active (30-day) accounts were added in Africa and Asia, specifically sub-Saharan Africa, East Asia, and the Pacific. However, the fastest growth by far was in the Middle East and North Africa (MENA) region due to remarkable growth in the Middle East,” GSMA said in the report.
In 2021, the mobile money map was redrawn, with sub-Saharan Africa seen accounting for just over half of active accounts and South Asia for 20%, surpassing East Asia and the Pacific (19%.)
In a decade, the number of mobile money providers almost doubled and their reach grew dramatically. In 2012, most services (83%) had fewer than 100,000 active accounts and only four (2%) had more than a million active users
By 2021, this number had swollen to 67 services (22%) and the landscape was much more complex, with services of all sizes.
Tax Potentials
- With a growth in the mobile money market, tax administration across the different African regions can key into this potential to get operators to pay taxes on services rendered.
- The administration can also derive tax from employees in the sector in a Pay as you Earn arrangement.
