Statistics published by the Bank of Ghana indicates that Ghana’s mobile money ecosystem has grown by a significant 186% between November 2022, when e-levy was revised from 1.5% to 1% and March 2024.
The Central Bank’s Fintech Statistics, which captures the performance of the mobile money ecosystem from January 2020 till March 2024, indicates, that prior to the e-levy reduction, the health of the ecosystem, which is determined by how many times one cedis circulates on e-money platforms – calculated by dividing value of transaction by the actual balance of float, grew to over 20 times on the average in 2021.
Then in earlier 2022, when the e-levy was introduced at 1.5%, the movement of the cedi on the mobile money platforms dropped to below 10 times monthly. This was mainly because Ghanaians adopted coping strategies to avoid the e-levy, so money transfer on digital platforms took a hard hit.
This affected, not just wallet to wallet transfers, but also wallet to bank, bank to wallet and even bank to bank. As a result, government was able to raise only GHS93 million in the first two months of e-levy implementation, which was a far cry from the GHS1.46 billion it targeted for the period.
So, in November 2022, government announced a reduction of the e-levy rate from 1.5% to 1% and that has paid off as far as the health of the mobile money ecosystem is concerned.
In November 2022, the balance of float in mobile money bank accounts was GHS10.93 billion, while the value of transactions at the time stood at GHS116.96 billion, meaning every GHS1 moved around on the platform 11 times (10.7) that month.
Fast forward to March 2024, Bank of Ghana reports that the balance of float in mobile money accounts with commercial banks reached GH¢18.69 billion, while value of transaction for the same month stood at GH¢576 billion. As a result, every one cedis circulated on the platform 31 times (30.8), which indicates a growth of 186% from November 2022.
The Balance of Float is the combination of customers, agents, partner banks and the service provider’s own cash deposit against which they have been provided Electronic Money.
The mobile money balance of float indicates that mobile money is one of the most effective tools that can be used to mobilize money outside of the banking system for national development. More importantly, the growth in the number of times one cedi circulates on the mobile money platform indicates the power of the ecosystem and the extent to which it can drive economic activity if its full potential is properly harnessed.
A strong mobile money market is a panacea to financial inclusion, job creation, increased economic activity, financial stability, improved tax collection, increased access to credit, improved government services, increased transparency and accountability, enhanced economic efficiency and improved data collection to drive accelerated development.
Meanwhile, total volume of transactions for the first quarter of 2024, stood at 1.86 billion, which is more than twice the 492.4 million recorded in November 2022. The volumes were even lower during the period e-levy stood at 1.5%.
Again, total registered customer accounts ending March 2024 stood at GH¢67.3 million (November 2022 – 54.46 million) while registered mobile money agents was 835,000 (November 2022 – 689,361).
