Report: Mobile Money Significantly Impacts Economies, Boosts Global GDP

Emma Okonji

A report by GSMA has revealed that mobile had a significant positive impact on economies, lives and livelihoods in many of the countries where the services operate, thus enhancing the growth rate of Gross Domestic Product (GDP) of countries surveyed across Africa and the rest of the world.

The GSMA is a global organisation unifying the mobile ecosystem to discover, develop and deliver innovation, foundational to positive business environments and societal change, with a vision to unlock the full power of connectivity so that people, industry and society can thrive.

According to the report tagged, “The State of the Industry Report on Mobile Money 2024,” mobile money transactions accelerated regional growth, where registered global mobile money accounts reached 1.75 billion, amounting to over 12 per cent rise in 2023 and the global transaction volume reached 85 billion amounting to over 23 per cent rise in 2023. The global transaction value of mobile money reached $1.4 trillion, which amounted to over 14 percent rise year on year as at 2023.

The report further said, out of these global figures, the total number of registered mobile money accounts in Africa was 856 million, amounting to over 19 per cent rise in 2023, while total volume of mobile money transactions in Africa reached 62 billion which amounted to over 28 per cent rise in 2023. The total mobile money transaction value in Africa, reached $919 billion, which amounted to over 12 per cent rise in 2023.    

Giving details of the report, the Director General, GSMA, Mats Granryd, said beyond improving financial inclusion and access to other digitally enabled services, the adoption, use and growth of mobile money are now reflected in macroeconomic indicators.

According to him, “Between 2013 and 2022, the total gross domestic product (GDP) in countries with a mobile money service was $600 billion higher than it would have been without mobile money. This is the equivalent of mobile money increasing GDP by around 1.5 per cent over the same period. Beyond contributing to financial and digital inclusion, increasing mobile money use has led to higher GDP, particularly among countries in East and West Africa.”

He attributed the positive impact and growth of mobile money to factors, which he listed to include: Higher adoption of mobile money combined with higher transaction values; An increase in ecosystem transactions, i.e. international remittances, merchant payments, and bill and bulk payments; and Stronger network effects, as more users adopt mobile money and transact with more people.

According to the report, agent networks continue to grow, driven by increased agents in sub-Saharan Africa.

In 2023, mobile money transaction volumes grew faster than transaction values, leading to a drop in average transaction values. Transaction values grew year-on-year by 14 per cent, lower than the 22 per cent increase seen in 2022. Similarly, transaction volumes grew at a slower rate in 2023 (23 per cent) compared to 2022 (27 per cent). However, transaction volumes grew faster than transaction values. Mobile money is now used more frequently albeit for smaller transaction sizes across almost all use cases, the report said.

Focusing on mobile money’s role in driving financial inclusion in Nigeria, the report said: “Mobile money growth in Nigeria has been driven by both Mobile Network Operator (MNO-led and non-MNO-led) providers, both of which are subject to different types of licences. The licences allow some similar activities, but the difference in what each type of licence holder can offer may influence their impact on financial inclusion. Overall, as more mobile money providers have emerged, digital payment use has grown in Nigeria. In 2018, the Central Bank of Nigeria (CBN) introduced the Payments Service Bank (PSB) licence, allowing MNOs to offer financial services.”

It further said: “The licence is reserved for non-bank mobile money providers, 25 per cent of whose operations must be in rural areas. PSBs can offer deposits and withdrawals, cross-border remittances, and can issue debit cards, but not credit cards. Among MNOs, Glo and 9Mobile were the first to be granted a PSB licence in 2020. In 2022, the Central Bank of Nigeria issued PSB licences to SmartCash PSB (Airtel) and MoMo PSB (MTN). Each MNO was required to form a specialised subsidiary as part of the licencing conditions.”