Mobile money transactions in Kenya has hit 68 percent of GDP as remittances continue to drive growth, according to data company Global Voice Group (GVC).
It is estimated that Kenyans make an average of Sh21.7 billion worth of mobile money transactions, highlighting the pivotal role mobile money plays in the economy.
Data from the Kenya National Bureau of Statistics for the year 2022 shows that the overall value of mobile money transactions reached an astounding Sh7.91 trillion, marking a 15 percent surge compared to the figures reported in 2021.
Increasing use of mobile money has sparked competition between mobile money wallets and commercial banks, as Kenyans gradually abandon cash-based transactions, which remain dominant, in favour of digitally enabled alternatives, particularly mobile money.
A paper titled "Data-Driven Transparency and Compliance in the Digital Financial Ecosystem in Africa, by GVC shows that mobile money and remittances will continue to dominate Africa’s economic development if supported with tools to boost data-driven transparency and compliance.
GVG Chief Delivery Officer Edouard Docteur however warns that African governments must ensure the implementation of effective monitoring solutions in the mobile money and remittance sectors to combat money laundering through these new channels.
“The whitepaper highlights how governments in Africa must invest in regulatory frameworks and leverage technology to ensure compliance, streamline taxation processes, protect end-users’ data, improve Know-Your-Customer (KYC) procedures, and mitigate risks associated with money laundering, financial terrorism, and scams” said Docteur.
Data from the World Bank shows that remittances accounted for at least 10 percent of the GDP of emerging and developing countries.
As of 2022, international remittances sent to low and middle-income countries reached $626 billion (Sh91.5 trillion).
This has been boosted by the growth in the uptake of mobile money with reports from the GSMA (which coordinates global mobile communication) showing that the global number of mobile money users grew ten-fold from 134 million in 2012 to 1.35 billion in the second year of the pandemic (2022).
Sub-Saharan Africa alone now accounts for 70 percent of the global market.
The paper examined the adoption of new technologies and the incorporation of global, regional, and national policies with a particular emphasis on mobile money, financial inclusion, data governance, and their impact on African economies.
Data from the Central Bank of Kenya (CBK) shows that the value of mobile money transactions reached 56.8 percent of GDP by end of 2021, an increase from 48.7 percent in 2020 and was projected to surge to 68 percent by the end of the 2022/2023 Fiscal Year.
The current data protection and sovereignty requirements would require increasing the current numbers of data centres to at least 700 across the continent.
