Mobile money access is a cornerstone of Africa’s economic future and among the technologies highlighted by Christine Lagarde during remarks in Addis Ababa on Friday.
The managing director for the International Monetary Fund was in Ethiopia to address the United Nations Economic Commission for Africa, with a speech that emphasized government leaders’ capacity to support technological innovation.
“Too often, we see the endgame of innovation,” Lagarde said, pointing to examples like medical supply drone deliveries in Rwanda or online peer networks among Ugandan farmers. “We tend to overlook the conditions that helped foster innovation and allowed it to grow.”
Among those conditions is financial integration, and mobile money continues to bring a revolution in everything from better credit access and lower remittance costs, to improved gender parity and business opportunity.
For governments, the shift to digital cash can mean reduced budget costs, as in the case of Nigeria. The IMF estimates that the government’s shift to digital payments could save about 1.7 percent of GDP, ranging between USD$5 and 9 billion in budget dollars, Lagarde said.
Kenya remains a mobile money leader, but other countries are catching up fast. There are more than 100 million active users across sub-Saharan Africa. In 2016, more than 40 per cent of the adult population was using mobile money in Gabon, Ghana, Namibia, Tanzania, Uganda, and Zimbabwe too, according to the most recent GSM Association report.
“What does it mean to have banking through your phone? Well, it may mean the difference between being approved for a loan or not,” Lagarde said. “Or it may mean that someone who is losing his or her job can more easily face the hardship because friends and family can send money quickly. In short, it can mean the difference between being empowered and being marginalized.”
For Lagarde’s complete speech, see this link.
A copy of the GSMA report is available here.
Image: Christine Lagarde