Mobile Money Moves Ahead in Africa
by Tomasz Smilowicz, Managing Director, Global Head of Mobile Solutions Global Transaction Services, Citi and Filippo Sabatini, Managing Director, Global Public Sector Head, Global Transaction Services, Citi
Economic and political commentators are saying that the 21st century will be Africa’s century, and that the continent is finally about to realise its potential. There are many favourable conditions at work for this to happen: economic growth, global demand for Africa’s commodities, greater political stability, and investment in infrastructure, education and social services.
The mobile phone is a major catalyst for Africa’s transformation. It is not just a means of communication for the continent’s citizens, businesses and governments, it is also a major medium of economic, social and political development. One of the mobile phone’s most important and exciting uses is to deliver banking and payments services to Africans, particularly those from the lowest income strata who have had little or no access to formal financial services.
A conference in Nairobi, Kenya last December, organised by Citi and the GSM Association (GSMA), the trade body for the worldwide mobile telecommunications industry, discussed trends in mobile banking and payments in Africa. The two-day event, ‘Mobile Money Policy Forum: Partnerships for Financial Inclusion in Africa’, focused on the successes of governments, financial regulators, development entities and other business bodies in the region, and assessed how further progress could be made in delivering mobile financial services to the continent’s poor.
Maria Otero, US Under Secretary of State for Democracy and Global Affairs, and James Wolfensohn, chairman of Citi International and a former president of the World Bank, gave keynote addresses. Professor Njuguna Ndung’u, governor of the Central Bank of Kenya (CBK), also gave a presentation, as did government representatives from Tanzania, Uganda, Congo, Cameroon and Gabon.
Other speakers included executives from mobile network operators (MNOs) as well as officials from non-governmental organisations (NGOs) active in promoting financial inclusion, such as the Consultative Group to Assist the Poor (CGAP) and the Bill and Melinda Gates Foundation.
The audience consisted of senior officials from public sector entities in Africa, such as ministries of telecommunications, finance and economic development, whose role is to promote economic development and financial inclusion, as well as to regulate the telecommunications and finance sectors. Also among the delegates were executives from utility companies, mobile network operators and providers of telecommunications and payments hardware and software.
Reaching the unbanked
Ade Ayeyemi, head of Africa, global transaction services (GTS), the division of Citi that co-hosted the forum, told delegates that the development of mobile commerce in Africa was not only dependent on what mobile operators and banks were doing, but on what governments were doing to create the right regulatory environment. “The mobile phone’s ubiquity provides an existing and cost-efficient channel for the unbanked to reach the market and the market to reach the unbanked,” he said.
Gabriel Solomon, senior vice president (SVP) for public policy at the GSMA, told the forum that mobile telecommunications is accelerating economic and social development across the globe. “With more than five billion connections, mobile is the only platform that can be leveraged to achieve broad financial inclusion,” he said. “As the GSMA and Citi partnership demonstrates, mobile money is a win-win for banks and mobile operators; working collectively, we can all capitalise on the significant opportunity before us.”