West Africa: The Emerging Powerhouse of Mobile Money
Over the past decade, West Africa has transformed into a significant player in the global mobile money landscape. The number of registered mobile money accounts in the region has doubled between 2013 and 2023, with Nigeria, Ghana, and Senegal leading this remarkable growth. This surge is not just a regional phenomenon; it reflects a broader trend in sub-Saharan Africa, which now accounts for nearly three-quarters of the world’s mobile money accounts.
The Rise of Mobile Money in West Africa
According to the GSMA’s 2024 State of the Industry Report on Mobile Money, the mobile money sector has seen exponential growth over the last two decades, significantly driving financial inclusion and creating opportunities for entrepreneurs and small businesses. As of 2023, there are approximately 1.75 billion registered mobile money accounts globally, processing an astounding $1.4 trillion annually—equivalent to about $2.7 million every minute.
The report highlights that while global registered mobile money accounts grew by 12% year-over-year in 2023, the growth rate is beginning to slow, indicating a maturation of the industry. However, the transaction volumes have surged, with a 23% increase, reaching 85 billion transactions annually.
Sub-Saharan Africa: A Key Driver of Growth
Sub-Saharan Africa has been a critical driver of mobile money’s success, contributing over 70% of the total growth in registered accounts in 2023. The region has seen a significant increase in mobile money’s contribution to GDP, with estimates suggesting that mobile money has added more than $150 billion to the region’s economy between 2013 and 2022. In East and West Africa, where mobile money adoption is particularly high, GDP growth rates have been even more pronounced, at 5.9% and 4.1%, respectively.
The GSMA’s findings indicate that countries with mobile money services have experienced a GDP that is $600 billion higher than those without, showcasing the economic potential of mobile financial services.
West Africa: A Unique Ecosystem
West Africa, particularly Nigeria, Ghana, and Senegal, has established itself as a leader in mobile money adoption. The region accounted for over a third of new registered and active accounts globally in 2023. Unlike East Africa, where mobile network operators (MNOs) have dominated the market, West Africa has seen a rise in non-MNO-led mobile money services, fostering a competitive environment that has spurred innovation.
The enabling regulatory frameworks in the region have facilitated a shift towards digital transactions, significantly enhancing financial inclusion. For instance, the West African Economic and Monetary Union (WAEMU) added over 110 million new mobile money accounts between 2018 and 2022, increasing financial inclusion from 56% to 71% for a population of over 137 million, with a significant portion residing in rural areas.
Socio-Economic Impact of Mobile Money
Mobile money is not just a financial tool; it is a catalyst for socio-economic growth. The GSMA asserts that mobile money has the potential to drive sustainable development and has contributed to achieving 15 out of the 17 United Nations’ Sustainable Development Goals (SDGs). As the market matures, mobile money providers are diversifying their offerings, introducing adjacent financial products such as credit, savings, and insurance.
In 2023, there was a remarkable 73% increase in the number of credit products offered by mobile money providers, reflecting a growing sophistication in service offerings. This diversification is empowering underserved populations, including women and rural communities, to save and manage their finances more effectively. Notably, there was a 98% increase in the number of unique female customers saving via mobile money between September 2022 and June 2023.
The Future of Mobile Money in West Africa
As mobile money continues to evolve, the average revenue per user has also seen significant growth, rising from $2.2 in September 2022 to $3.2 in June 2023—an increase of over 40%. This growth underscores the increasing acceptance and reliance on mobile money services.
However, to ensure the continued success and accessibility of mobile money, it is crucial for governments and regulators to collaborate with financial service providers. Launching financial literacy programs can empower underserved populations, enhancing their financial decision-making capabilities and ensuring that mobile money remains safe, accessible, and affordable.
Conclusion
West Africa’s emergence as a mobile money powerhouse is a testament to the region’s innovative spirit and commitment to financial inclusion. With a robust ecosystem that encourages competition and regulatory support, the future of mobile money in West Africa looks promising. As the industry matures, it will undoubtedly continue to play a pivotal role in driving economic growth and improving the lives of millions across the region.