Nairobi — Mobile money and remittances will continue to play an important role in Africa's economic development if they are supported with tools to boost data-driven transparency and compliance, according to a new whitepaper that was released on Thursday by Global Voice Group (GVG), a global provider of ICT and RegTech solutions for governments and regulatory bodies.
The whitepaper reveals that the market for digital financial services is expanding significantly, with a growth rate that is challenging to quantify precisely.
This tendency is particularly noticeable in mobile money (MM), a crucial instrument for promoting financial inclusion in many African countries.
The whitepaper suggests that overall, data technologies also have the potential to revolutionize policymaking by enabling evidence-based decision-making.
They make it possible for policymakers to quickly collect and efficiently analyze large amounts of data to obtain actionable statistics.
This can help them better understand the challenges facing the digital financial ecosystem and make informed decisions based on the evidence.
While reacting to the findings of the whitepaper, GVG Chief Delivery Officer Edouard Docteur has called for a stepped-up investment in digitization in a bid to curb illicit financing.
"With the massive increase in digitization, African governments must ensure the implementation of effective monitoring solutions in the mobile money and remittance sectors," he said.
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The whitepaper highlights how governments in Africa must invest in regulatory frameworks and leverage technology to ensure compliance, streamline taxation processes, protect end-user's data, improve Know-Your-Customer (KYC) procedures, and mitigate risks associated with money laundering, financial terrorism, and scams," he added.
Remittances play a huge role in Kenya's GDP, with data from the Central Bank of Kenya (CBK) showing that the value of mobile money transactions reached 56.8 percent of GDP by the 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.
In the report, remittance inflows as of May 2023 totaled $352.1 million compared to $320.0 million in April 2023, an increase of 9.9 percent.
The cumulative inflows for the 12 months to May 2023 totaled $3,997 million compared to $3,992 million in a similar period in 2022, an increase of 0.1 percent.
