Global Tech - Afrikan Heroes

How Telcos are Bringing Inclusion to Africa’s Financial Landscape

November 15, 2020

Mobile financial services are a global game-changer with an open money network being the connection needed between the financial industry and telecom to increase both the commercial and social benefits.As the world grapples with an unprecedented crisis in the form of the COVID-19 pandemic, consumers are cautious to use cash or making a withdrawal from an ATM and agent network. This has given mobile money a new dimension as customers can make payment anywhere at any time with their mobile devices as easy as sending a text message in geographies that are normally unable to benefit from banking structures.

This allows customers to seamlessly purchase products or services without having to physically hand over cash or swipe a card. The freedom to send, spend and receive money with a mobile phone is quickly becoming an essential part of life for billions of people.

Originally available in a few selected markets, mobile money is now a global phenomenon, recording astonishing growth in emerging markets and reaching a broad range of customers. Mobile money is currently present in 95 countries with 290 deployments worldwide. GSMA reported only 50 million new accounts registered in Sub-Saharan African its 2019 report.

According to this report, the mobile money industry has shown a tremendous achievement in reference to previous years with over a billion registered accounts, 372 million active accounts and close to $2 billion in daily transactions. In other words, we can say that mobile money has reached new heights in terms of digitisation of payments.

Mobile Financial Services (MFS) are a natural part of the connected world. For the mature markets/countries, they provide convenience, for the emerging countries they bring a possibility to make transactions where the financial infrastructure is weak or unreliable, providing ”banking for the unbanked”.

A large portion of the population in Africa needs to be brought into the folds of financial inclusion in order to generate sustainable economic growth. The high cost of opening a bank and long distances to banks are among the barriers to gaining access to financial services for the unbanked in the country.

Additional challenges are related to lengthy queues, processing time, high service charges while receiving payments are also common. What’s more, the amount of time taken to process money transfers, the distance from the place of transacting for international transfers can be frustrating – as can long processing and waiting times during bill payment provide opportunities.Ericsson reported more than 190 million registered users on its Wallet Platform with their monthly transactions surpassing $18 billion by the end of June 2020.

This is an indicator of how technology has enabled the connection needed between the financial industry and telecom to increase both the commercial and social benefits. What is the best outcome of enabling this inclusion you may ask?

Increasing financial inclusion through the use of digital technology is an essential element in furthering the economic development of Africa. When the access to safe and secure financial services is within reach, enhancement in energy, health, education and employment opportunities will follow.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Rwanda Coding Academy Receives $150,000 From AfDB

November 11, 2020

The Rwandan Ministry of Information Communication Technologies and Innovation has been awarded a grant of $150,000 by the African Development Bank (AfDB). This amount is dedicated to the Rwanda Coding Academy (RCA). It is a structure whose goal is the development of leading technological talents.

RCA welcomes high school students eager to pursue careers in coding and computer related trades. It provides them with lessons that can promote the acquisition of current skills. The stake is the stimulation of the digital economy which the government wants more and more dynamic.

AfDB Rwanda Coding Academy AfDB Rwanda Coding Academy

The $150,000 comes from the Rockefeller Trust Fund, which is administered by the AfDB. It will be used to finance several activities, including the purchase of computers and furniture for a modern innovation center. It is dedicated to excellence, connectivity, training of trainers and organizing career counseling appointments.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer

South Africa’s Western Cape Launches Tech Ecosystem Initiative

November 10, 2020

The Digital Economy unit at the Department of Economic Development and Tourism has collaborated with the Western Cape Government, City of Cape Town, Wesgro, and various facilitators in the tech ecosystem in the region such as CiTi, Silicon Cape, LaunchLab and Startup Bootcamp, to launch a new brand and initiative aimed at positioning the Western Cape as Africa’s Tech Capital.

The new brand aims to unite the tech ecosystem of the Western Cape, acknowledging the values, skills, talent, and innovation of numerous tech startups in the region. New brand launches that positions Cape Town and the Western Cape as Africa’s Tech Capital. In an official press release, Alan Winde, Premier of the Western Cape, revealed the new brand and initiatives’ logo at a launching event and commented on how the pandemic has accelerated the digitization of the local economy.

“We are excited to proudly declare Cape Town and the Western Cape as “Africa’s Tech Capital”. The Covid-19 pandemic has shown us just how important this new digital economy is and it bodes well for our province’s recovery plan that we are the leading in this space. I want to thank our Department of Economic Development and Tourism for their hard work on this pioneering project. And I also want to thank all those innovative start-ups for your role in developing our amazing tech ecosystem.”

Western Cape’s tech ecosystem is thriving with tech and digital businesses mainly located in Cape Town and the Stellenbosch region. According to the CEO of Wesgro, Tim Harris, who echoes Cape Town’s success in digital technology in an official press release, “we need to affirm our status as leader of the African tech ecosystem and declare this on the international stage. We have the overwhelming evidence that Cape Town is Africa’s leading tech capital. Now, we need to jointly tell the world”

The new tech ecosystem brand will offer tech startups and companies in the Western Cape the following: A community of diverse companies across the tech ecosystem. Supporting institutions to increase ease of business for tech-based companies or startups. Over 22 active incubators and accelerators in the region, providing business and tech support, mentoring, networking opportunities, and access to possible funders.

The University of Cape Town, Stellenbosch University, CPUT, and the University of the Western Cape, in addition to six TVETs (Technical and Vocational Education and Training) in the Western Cape, all contribute to the growing tech sector and assisted businesses during Covid-19. Alderman James Vos, Mayoral Committee Member for Economic Opportunities and Asset Management commented on the excellent IT infrastructure as The City of Cape Town funded Cape Innovation and Technology Initiative (CiTi).

“With an internet take-up of 63% and with one of the largest open-access fibre networks in Africa, Cape Town is home to the vast majority (almost 60%) of South Africa’s start-ups. The City-funded Cape Innovation and Technology Initiative (CiTi) is Africa’s oldest tech incubator and has turned out more than 2,000 businesses and supported more than 3,000 entrepreneurs since its inception in 1999. In response to this growing industry, the City of Cape Town is continuing to invest in IT infrastructure, and to date, the City has installed 848km of fibre-optic cable. As a City, we will continue to support and invest in high growth sectors that will create jobs for our residents. This is a caring city, but more so, Cape Town is an opportunity city and we are open for business.”

Covid-19 presented unforeseen challenges for businesses and as a result, many companies have adopted digital technologies. According to the Western Cape Government, the digital economy is an attractive investment opportunity that continues to bring international investments onto the local shores. In addition, the investment into the digital economy fosters the growth of tech startups/companies along with increased employment opportunities in the tech sector for locals in the Western Cape.

David Maynier, Western Cape Minister of Finance and Economic Opportunities acknowledges the challenges Covid-19 brings to businesses and ensures the launch of the new brand will assist in the economy’s recovery.

“The launch of this new brand couldn’t happen at a better time as we reopen our economy and begin rebuilding so we can save jobs in the Western Cape. The key to our economic recovery is the partnerships between the government and the private sector. And this new brand, which is a confidence boost to the sector, is a great example of a successful partnership between the government and the private sector.”

The Western Cape Government is encouraging tech startups and businesses to become apart of the tech ecosystem, in turn positioning the region as Africa’s tech capital. Tech companies are encouraged to submit their details online to build a data base for the new tech ecosystem.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Egypt’s Amjaad Raises funding to Expand its IoT Activities

November 9, 2020

One of Egypt’s leading Internet of Things (IoT) and smart metering startup Amjaad has raised an undisclosed amount in US dollar pre-Series A funding round to help it expand its product and grow its customer base at home and abroad. Founded in 2018 by Hussein Darwish, Amjaad has developed ioMeter, a web and mobile based platform for energy management and consumption monitoring purposes.

ioMeter provides customers with access to smart metering solutions to help them monitor electricity, export accurate bills, and manage energy consumption. Users can also use the platform to pay their bills. Amjaad has now raised funding from the Bahrain-based Dhaman Group, with the startup saying it would use the investment to add more features and payment facilities to the ioMeter system, add water and gas meters, and implement its platform in more compounds and malls in Egypt. Amjaad also has plans to start expanding into other countries.

“The market today is rapidly accelerating towards digital transformation and IoT has become the backbone of many systems around the world. Amjaad is a leading company in this field with a great vision to impact more than 10 million people by 2025 through our smart metering solutions and other IoT systems. This vision leads us to provide the best services to our clients to make their life easy and happy. So we want to thank the trust given to us by our investors, customers, and the great Amjaad team,” Darwish said.

Dr Mahmoud Al Hawary, chief executive officer (CEO) of Dhaman Group, said Amjaad was one of the promising companies in the field of energy management solutions. “One of my goals of investing in Amjaad is to increase the company market share and impact inside Egypt and to open new horizons and markets outside Egypt, especially the Gulf region,” he said.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Internet of threats – cybersecurity measures in the IoT landscape

November 8, 2020

By Kabelo Makwane

Internet of Things (IoT) refers to any object or device that is connected to the Internet. This rapidly expanding set of “things” – which capture, send and receive data – includes cars, appliances, smartwatches, lighting, home assistants, home security, and more. It’s predicted that by 2025, there will be 41.6 billion units of IoT connected devices worldwide. Internet-connected devices can make us more efficient, save time and money, and allow us connectivity from almost anywhere, but they also require that we share more information than ever.

**Kabelo Makwane, Managing Executive for Cloud, Hosting & Security at Vodacom Business**

The security of this information, and the security of these devices, is not always guaranteed. Once a device connects to the Internet, it could be connecting to all sorts of risks.

As the number of connected devices increases, especially as more people are working remotely with fewer security barriers at home, so do the possible entry points for cybercriminals. The IoT creates new security challenges for the IoT devices themselves, their platforms and operating systems, their communications, and even the systems to which they’re connected.

Protecting IoT devices, as well as their software, operating platforms and data, from the threat of a cyberattack should be a number one priority for businesses and individuals, but too often than not, we’re focused on the cost-effectiveness and convenience of IoT rather than its vulnerabilities.

According to technology research firm Gartner, 25% of identified attacks in enterprises involve the IoT, although the IoT accounts for less than 10% of IT security budgets.

Simple steps in IoT security

The first step in device protection, whether it’s at home or in a business, is to identify the devices on your network and determine their risk profile. An IoT security solution with Next-Generation Firewall can do this for you, determining which IoT devices are not running endpoint protection, and safeguarding all of them regardless.

Botnets can scan for easily identifiable usernames and passwords to take control of a device. Changing a device’s factory security settings from the default username and password to something unique and as long as possible is a simple precaution in IoT device protection. Strengthening access control mechanisms and user authentication can ensure greater security to the IoT framework.

Tamper-proof precautions for hardware can restrict entry points, stopping attackers from taking control of a device or reaching important data. They can also offer additional security features to software-based solutions.

Attackers are always finding new methods to gain access to data stores and systems. Whether it’s your computer, smartphone, or other network devices, the best defence is to stay on top of things by updating to the latest security software, web browser, and operating systems. If you have the option to enable automatic updates to defend against the latest risks, turn it on.

Securing the network is important in preventing hackers from intercepting communications between the device and cloud application. In addition, device data should always be encrypted when it is being sent, to protect against attacks. Identity verification and multifactor-authentication to gain access to the network and the devices on the network, as well as the applications, ensure that communication is not compromised.

Businesses need to see the whole picture

Many organisations traditionally have a decentralised line of action when it comes to cybersecurity, differing their tactics according to region, department and even product. However, as the IoT connects all parts of an operation in various ways and at a vast scale, collecting a huge scope of data (some accessed by third parties), a more integrated and holistic stance to IoT cybersecurity is needed.

IoT cybersecurity in a business needs to fortify every layer of IoT stack, at every level, and throughout a product’s life cycle, where there’s a collaboration between other players and stakeholders in the industry to establish effective protection measures. Anticipating scenarios, prioritising points of risk, and having a ready-to-adapt response plan will also mitigate the fall-out of a potential attack.

We can’t stop all cyberattacks from happening, but we can put proactive measures in place that mitigate threats to IoT devices, infrastructure, systems and valuable data. This is especially important in a business, where if IoT is secure, organisations can then truly maximise on the cost-saving, efficiency, and connectivity benefits of IoT.

Kabelo Makwane, Managing Executive for Cloud, Hosting & Security at Vodacom Business

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Binance Labs–Backed ‘DeFi Credit Union’ Bringing Higher Yields to Savers in Nigeria

November 4, 2020

The Nigeria-based startup Binance Labs is looking to bring decentralized finance (DeFi) to the world of credit unions. Built on the Binance Smart Chain, Xend Finance announced its public launch and a $1.5 million strategic funding round early this week. Aronu Ugochukwu, Xend CEO said that “a major problem faced by these credit unions or cooperatives is a constant devaluation of the currency, because most of the time our economy is unstable.” With backing from Binance Labs, Google Launchpad, AU21 Capital, TRG Capital, Matic co-founder Sandeep Nailwal and others, Xend aims for financial inclusion in the developing world by converting deposits into crypto and harvesting yield on DeFi platforms like Compound and Aave.

The protocol also allows users to create their own credit unions and cooperatives, eliminating traditional middlemen. “Traditional credit unions have a number of limiting drawbacks,” said Ugochukwu, “including only 1% annual percentage yield returns and geographical limitations.” By contrast, a press statement touted as much as 15% APY on Xend users’ savings. By tapping into DeFi, small savers can stake their local currency and earn compounded interest in a stable currency, Ugochukwu said, like the U.S. dollar.

The platform has already received $1,000 from one local cooperative to help onboard five of its members, including a group of doctors at the University of Nigeria Teaching Hospital (UNTH). Xend, a traditional fintech company and parent company of Xend Finance, has already built a network of 55,000 users which Ugochukwu hopes to bring over to the new DeFi platform.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Paxful Partners Uhuru Wallet to Ease Money Transfers

November 2, 2020

Ray Youssef, CEO, and co-founder of Paxful

Leading cryptocurrency firm in Africa, Paxful has partnered with Uhuru Wallet to add a new payment method to its platform. This collaboration is expected to give South Africans access to the crypto economy, making it easier to make money transfers.

The cost of financial transactions in Sub-Saharan Africa can be sky-high. Fortunately, the global crypto-currency space is providing African users with a cheaper alternative for personal and business-related transactions across borders.

A recent report by the blockchain forensic and research group Chainalysis on cryptocurrency use around the globe revealed that monthly crypto transfers under $10,000 to and from Africa jumped more than 55% in a year, reaching $316 million in June 2020. The number of monthly transfers nearly doubled, surpassing 600,000 transactions with most of the activity taking place in Nigeria, South Africa, and Kenya.

“Many Africans living abroad face difficulties when it comes to remittances or payments, as modern money transfer operators are often expensive and time-consuming. We are now providing our users with a practical and cost-effective process offering them a global financial passport. For true financial inclusion to happen, a free market for money transfers is required,” says Ray Youssef, CEO, and co-founder of Paxful.

Acting as a ‘fiat on and off-ramp’ on the Paxful platform, which already hosts over 300 different payment options, Uhuru Wallet will enable users to buy and sell Bitcoin (BTC) and Tether (USDT).

“This is the perfect opportunity to partner with local talent and support the growth of the crypto community in South Africa,” continues Youseff.

“By joining forces with Uhuru, we can unlock more options for our African users, many of whom are held back by restrictions of traditional financial systems, so we’re making crypto more accessible as a real-world payment method.”

Launched earlier this year by Uhuru Innovative Solutions, a Zimbabwean-born startup established in 2017, Uhuru Wallet believes that having a transaction account is the first step towards financial inclusion.

“We’re thrilled to be able to partner with a leading international marketplace like Paxful. Uhuru is a product for Africans by Africans, and we share Paxful’s vision of greater financial inclusion. We look forward to working with them to include more Africans in the global economy,” concludes Reginald Tsvetu, Marketing and Business Development Officer at Uhuru Wallet.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Huawei Launches its Search Engine, Petal Search to South Africa

Chinese tech giant Huawei Corporation took another giant leap in its efforts to wean its platforms of dependence on American software by launching their own search engine app Petal Search. This app has been launched in South Africa and will soon be launched in other African countries to link up with other 170 countries across the globe where the service has gone live, supporting more than 50 languages. This addition to the Huawei Mobile Services ecosystem allows users to instantly find the information they need. In addition, with the cooperation with global and local partners, Petal Search is vigorously developing local life search services, to provide users with a rich location-based and scenario-based search experience.

When a user looks up local live content, Petal Search provides high-quality and most popular localized information, such as personalized recommendations or nearby foods, worth visiting local attractions, and shopping discounts.

Petal Maps, meanwhile, is Huawei’s mapping and navigational tool, offering positioning services, immersive map displays, place searches, driving navigation and favourite place lists to users in over 140 countries and regions. It supports map displays in multiple languages, with voice notifications in English, French, Spanish, German, Italian, and Mandarin.

Petal Maps is also equipped with cutting-edge functions to give real-time transit updates in some major cities, helping commuters better plan their routes and take the worry off travelling. Utilizing pioneering technologies such as Super GNSS and image recognition algorithms, Petal Maps further heighten the accuracy and present users the most efficient and least congested routes.

Huawei Docs, available in more than 100 countries and regions, supports document viewing and editing across over 50 formats including PDF, PPT, and DOC. With real-time syncing enabled by cloud capabilities, Huawei Docs lets users seamlessly work on the same document on different devices logged into the same Huawei ID, enhancing the smart office experience.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

How Digital Payments could Foster African Development

By Murray Gardiner

The World Bank has estimated that Africa could potentially hold 90% of the global poor population by 2030 and has recently cut its economic growth predictions to between -2.1% and -5.1% in 2020 from the 2.4% of 2019.

The situation has been significantly worsened by the global pandemic, as the continent hits its first recession in 25 years. But this is not the picture that defines a continent that has long defied expectation and prediction.

In fact, a young population, a growing consumer market, and the rapid movement towards mobile inclusion and connectivity are shifting the conversation. Africa is poised on the cusp of change introduced by mobile and internet technology.

Africa has undergone a remarkable journey over the past 30 years. It has not only leapfrogged legacy technology and systems into a more relevant future, but it has done so in spite of challenging circumstances. This is particularly relevant when it comes to mobile – the technology, the connectivity, and the financial inclusion.

To date, according to the GSMA 2019 Mobile Money Report, there are more than one billion mobile money accounts in Africa that account for 57% of mobile money transaction values.

Over the next five years, also according to the GSMA, it’s expected that 84% of Africans will have access to a SIM connection and that mobile payments will play a critical role in empowering individuals, businesses and the economy as a whole.

This is the principle that’s dominating the current approach taken by the World Bank in an effort to provide Africa with much-needed support in the wake of COVID-19. The organisation is focusing on putting women at the centre of digital payment programmes and leveraging digital technologies to improve trade, government and resource management.

This underpins the organisation’s focus on national payment systems that are secure, affordable and accessible as these are the tenets that underpin an economy that’s focused on financial inclusion and stability.

African payment solutions are critical to minimising fraud while improving the free flow of funds to boost business and economic activity. Payment technology that allows individuals from all walks of life to manage their money securely is the equivalent of putting a bank into every person’s pocket.

Digital payments equalise engagements while improving transparency and control over finances and business. They also empower the small to medium enterprises (SMEs), giving them greater scope for inclusion and access to customers and markets.

This has become particularly true in the current environment. Digital payments are now, more than ever, the key to unlocking business growth on the continent. The rigorous regulations put in place by African countries to minimise the impact of the virus have led to inventive approaches to shopping and living. Digital payment platforms are significantly safer than cash and are increasingly being leveraged by governments and organisations to improve customer access to resources and services.

According to a study released by McKinsey & Company in June 2020, ‘innovation in payments should be one component of the industry’s response to the crisis’, and this should include promoting awareness of digital payments, partnering with other industries, and introducing new and relevant products.

In Africa, digital payments are more than just keys to open the doorways of financial inclusion, they are increasingly the steps that will take the continent out of recession and into a more dynamic and inventive future. This view is echoed by the investments made by the World Bank and organisations such as SWIFT and Bluecode Africa; programmes such as the African Continental Free Trade Area (AfCFTA), and the International Monetary Fund.

Investments that include cross-border payment platforms increased commerce capacity, cost management, digital innovation, and the empowerment of individual, micro-enterprise and SME. It’s time to educate businesses and individuals as to the costs and risks of cash as opposed to digital. To showcase the value of digital payments in not just opening up new markets and opportunities, but in providing tighter cash flow control at a better price point than cash.

The continent may not be showered in stunning statistics, few continents are at this point in time, but it is hovering on the edge of a future that has the potential to transform poverty, business and economy.

Murray Gardiner, MD of Bluecode Africa

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Mobile money key to Africa’s growth, but bad tax policies ruin it – By Bassim Haidar

October 27, 2020

Bassim Haidar, Founder & CEO, Channel VAS

After more than a decade since its emergence, mobile money has evolved as the formal financial service of choice for many underserved groups in developing countries. The rapid adoption and widespread use in these areas aren’t due to its convenience (as it is in many developed markets) but on its necessity, since it bridges gaps for unbanked people that the existing banking sector cannot.

As a result, emerging markets have become the epicentre of mobile money activity, with sub-Saharan Africa experiencing the most growth. Transaction volume and value in the region have seen double-digit growth during the last decade, and mobile money accounts are expected to reach 500 million at the end of 2020.

As expected, the success of such services attracted the attention of tax authorities seeking to expand their revenue base. After all, in sub-Saharan Africa, the formal economy represents about 34% of the population, putting extra pressure on states to seek new sources of revenue. Mobile money services have been such an opportunity.

‘Poorly designed tax policy’

While there is no doubt that African governments have to raise taxes and broaden their tax bases, they must also approach tax policy with a discerning eye. Despite the diverse methods proposed to tax mobile money, in most cases the results – especially on mobile money transaction – are controversial, proving the structural weaknesses of taxation in the region and putting Africa’s financial inclusion at risk.

A recent report from GSMA notes: “State authorities are unable to fully understand the nuances of emerging sectors, such as mobile-money services or even the wider digital economy.” The result has been “badly designed taxes which, although they may seem attractive at first sight, fail to consider the impact on the broader economy and society.”

A poorly designed tax policy, leads to deficient outcomes. Independent research and reports from prestigious organisations, such as the above mentioned GSMA, reveal aspects of the problematic way in which mobile money services are treated. This includes specifics of the population that uses these services or the negative impact on financial inclusion those taxes bring about.

Needing guidance

There is a lack of capacity within research units at the policy level and a lack of national policy frameworks to guide them. As a result, the full impact of mobile money taxes is not adequately assessed. “Political economy factors are ever-present too, which leads to these taxes being implemented without established processes being followed,” the GSMA report argues. It also adds that where these taxes have been implemented, mobile money transaction values have contracted, and “their growth trajectory reduced with negative implications for wider CIT and VAT tax takes.”

According to another report of GSMA, 77% of mobile money providers reported paying sector-specific taxes in 2019, whether on fees, transaction values, or total revenue. Additionally, 23% of those affected said taxation was harming the uptake of mobile money services and their business, revealing the regressive effect of poorly designed taxes.

Channel VAS‘ mobile financial services provide access to over $12m daily to a pool base of more than 750 million subscribers globally, a significant amount of which are in the sub-Saharan region. We have experienced first-hand these services’ growth, their beneficial effects on underserved populations, as well as how they can be hindered by poorly designed taxation.

Bottom line

Mobile money has enabled sub-Saharan Africa to achieve unprecedented financial inclusion levels and will continue to contribute to broader development goals. When contemplating mobile money taxation, authorities should consider the longer-term negative impacts of such policies and work on a more flexible, far-sighted and understanding framework that will lead to more growth and, in turn, more earnings for the states in the long run.

Bassim Haidar, Founder & CEO, Channel VAS

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry