Africa's mobile money outlook

The mobile money landscape in Sub-Saharan Africa has been rapidly evolving, with the region leading the way in innovative financial services. According to a recent report by GSMA, Sub-Saharan Africa accounts for more than half of the 277 mobile money programs globally. The study highlighted a significant shift in the adoption of mobile money services, with almost 29 percent of active accounts now based in West Africa, moving away from the historically dominant East Africa. Nathan Naidu, the Director of Policy and Advocacy for the Mobile Money Program, shed light on the key trends and challenges shaping the industry in an interview with CNBC Africa. One of the major factors influencing the growth of mobile money services in Africa is the regulatory environment. Naidu emphasized the importance of a level playing field for all financial service providers, including mobile operators and non-bank entities. Enabling regulation in 30 African markets has been instrumental in the success of mobile money, allowing banks and mobile money providers to compete effectively. However, Naidu acknowledged that some large African markets still impose restrictions on mobile money providers, limiting access to financial services for the population. Despite the challenges, mobile money has made significant strides in several African countries, with 40% of the adult population actively using mobile money in seven countries. Countries like Uganda, Tanzania, Gabon, Zimbabwe, Namibia, and Ghana have seen widespread adoption of mobile money services, paving the way for financial inclusion and digital empowerment. Looking ahead, Naidu highlighted the future trends in mobile money, including the expansion of ecosystem transactions, bill payments, and the integration of e-commerce platforms. The GSMA envisions a synergistic relationship between mobile money and e-commerce, driving growth and financial inclusion in the region. Naidu also addressed the regional dynamics of mobile money adoption, noting the rise of West Africa as a key player in the industry. While East Africa has traditionally been a stronghold for mobile money, West Africa has witnessed a surge in mobile money usage in recent years. The region's enabling regulation and investment climate have fueled the growth of mobile money, with new use cases emerging rapidly. Naidu cited examples from countries like Cote d'Ivoire, where mobile money is widely used for school fee payments. The shift towards West Africa signifies the broader spread of mobile money services across the continent, promising a more inclusive financial ecosystem. As mobile money continues to revolutionize the financial landscape in Africa, stakeholders must address regulatory challenges and harness the potential of emerging trends to drive sustainable growth and financial empowerment for all.