Experts and industry players in the financial and telecommunications sectors in Africa have made a clarion call on heads of state, heads of financial institutions as well as regulators in the financial and telecommunications industry to commit to a payment architecture that will be interoperable across all borders on the continent.
A continent-wide system where all African countries can purchase goods and services and make payments through the use of a mobile money interoperability infrastructure, according to experts and industry leaders, is attainable, but the commitment of decision-makers is needed to make it a reality.
The policy proposals were made at the Mobile Money Interoperability Symposium organised by the Africa Prosperity Network (APN), under the theme; “Scaling Up Interoperability — Using Mobile Money to Buy and Sell Across Africa.”
Expert Proposals
The experts essentially discussed financial inclusion as a catalyst for prosperity and emphasised the importance of interoperability in driving economic growth across Africa. They highlighted the potential for mobile money to bridge gaps in financial services and empower communities.
On the subject of payment systems, industry players discussed the essential components and strategies for creating an integrated payment system to boost intra-African trade. The focus was on leveraging digital trade, regulatory support, and innovative technologies.
Panellists at the symposium also underscored the need for regulatory harmonisation and cooperation between countries to facilitate seamless transactions, emphasising the importance of building a unified regulatory framework that supports innovation while ensuring security and compliance.
Representatives from leading telecommunications companies shared insights on their preparedness, the technological advancements needed to support interoperability as well as the challenges and opportunities in implementing cross-border mobile money solutions.
On what needs to be done in the short, medium, and long term to achieve interoperability in Africa, the experts and industry leaders called for continued advocacy across key policy partners.
They proposed the finalisation of a legal framework and the constitution of a governance committee that would work with a technical working group, including a SAPA team, as well as the execution of a pilot mechanism with anchor bank, fintech and telco partners.
Mobile Money/Common Currency
Vice-President of the Republic of Ghana, Dr Mahamudu Bawumia, in his keynote address at the opening ceremony of the interoperability symposium, highlighted the need for central banks in Africa to put in more effort in making mobile money interoperability a reality on the continent.
Dr Bawumia said this could replace the idea of a single currency which has been on the drawing board for decades due to the inability of several African countries to meet the convergence criteria.
“The idea of a common currency which came in 1963 has been overtaken by the digital payment age… that today you can think about mobile money as a common currency. If we make it interoperable, we don’t need to have the common currency before we get the benefits.”
“Making mobile money interoperable allows our citizens across the continent to trade seamlessly, and so this is where I believe as African countries we need to focus on. One of the common problems of achieving a common currency was the difficulty of our respective countries in achieving the macro-economic convergence,” the Vice President said.
“I believe that if we are serious about it, we can work towards mobile money Interoperability at the continental stage and, therefore, we should move away in this regard from the macro-economic convergence criteria to digital payment convergence criteria,” Dr Bawumia added.
Interoperability Agenda
Vice-President Mahamudu, in his statement, indicated that he has decided to champion mobile money interoperability across the African continent after successfully spearheading a successful implementation of the same in Ghana.
“We need the political will to get this done. In my own experience without political will, it is not likely to be done, because it takes a lot to pull these Telcos together to come on a common platform to get things done. I have told my boss, the President [Akufo-Addo], that after finishing with domestic mobile money interoperability, I am going to now focus on continental mobile money interoperability,” Dr Bawumia said.
Impact of Mobile Money Payments
Ahead of the experts’ discussions and deliberations, the executive chairman and founder of Africa Prosperity Network (APN), Gabby Asare Otchere-Darko, in his welcome address said that the African continent has witnessed a remarkable digital revolution in recent years, particularly in the financial sector.
Mobile money, a service that allows people to transfer money and make payments using their mobile phones, according to Mr Otchere-Darko, now plays a significant role in the daily lives of millions of Africans and there are available statistics to justify this assertion.
“Africa represents close to 70% of global money transaction values. In 2021, 50% of adults in Sub-Saharan Africa made or received a digital payment, up from 34% in 2017. The average annual volume of transactions increased by 47% in 2018, while the average value increased by 39%”, Gabby Otchere-Darko said.
“For a continent where the majority of our people earn their daily wage through Micro, Small, and Medium Enterprises (MSMEs), what is absolutely and undeniably clear to us is that the future of Africa is being more and more defined by the freedom of inclusion, the abundance of opportunities and the ladder to prosperity which digital economy provides,” the Executive Chairman of APN remarked.
Success Stories
To this end, Mr Otchere-Darko pointed out that some countries on the continent such as Ghana, Kenya, Zimbabwe, and Botswana, among others, have been able to introduce mobile money interoperability domestically and there should not be any reason why the same cannot be achieved on the entire continent.
“We in Ghana appreciate the value that interoperability has brought to both our social and economic lives since our government took that significant policy step a few years ago, and that experience is now shared in several countries across Africa. There is a market of 1.4 billion or so consumers out there in our 55 nation-states.
“Imagine what it will mean for a young Ghanaian tailor, whose clothes on Instagram can be bought by consumers in Zimbabwe using Zimbabwean dollars (not US dollars) from their Econet mobile wallet and this tailor in Tamale, receiving payment in cedis? The technology to make that happen is before us. What is required is the will to make it happen,” Mr Otchere-Darko said.
“Currently, numerous mobile operators and financial institutions operate in silos, creating an environment of limited interoperability that constrains the continent’s economic potential.
“Key stakeholders, including Mobile Network Operators (MTN, Orange, Telecel, Safaricom, Vodacom, and Airtel), Financial Institutions (Commercial banks, Development banks), Regulatory Bodies (Telecom Regulators, Central Banks, National Security Agencies), Trade Associations and Governments, hold pivotal roles in this ecosystem.
“Above all, we need the political will of African leaders and the courage and commitment of our central bank governors to make cross-border [payments a possibility],” the Executive Chairman of Africa Prosperity Network (APN) added.
Commendation
Governor of the Bank of Ghana (BoG) Dr Ernest Addison commended the Africa Prosperity Network (APN) for spearheading the symposium on advancing interoperability in Africa. Governor Addison observed that effective collaboration is crucial in achieving cross-border payments and that the BoG is ready to partner all African central banks to make the laudable idea of a continent-wide mobile money infrastructure a reality.
“I would like to extend my sincere thanks to the organisers of this symposium for their dedication towards the launch of this initiative. Your commitment to fostering collaboration and innovation in this crucial area is commendable, permit me to also add that the initiative to scale up cross-border payment interoperability aligns with the broader financial digitisation and inclusion agenda of BoG,” Addison said.
Africa Prosperity Network (APN)
The Africa Prosperity Network (APN) is a non-profit organisation founded to advance the vision of “The Africa We Want” as outlined in the African Union’s Agenda 2063, with a particular focus on promoting Africa’s prosperity and economic integration.
APN is the vehicle that runs the Africa Prosperity Dialogues, an initiative committed to creating platforms for partnerships among political and business leaders, civil society, academia, and traditional authorities in Africa.
This is aimed at driving the rapid development of the continent through dialogues and consensus-building on issues of trade, commerce, and strengthening of African economies.
Africa Prosperity Dialogues (APD)
The African mobile money interoperability symposium is a follow-up to one of the main focus areas of the 2024 edition of the Africa Prosperity Dialogues (APD) and seeks to accelerate intra-African trade through the Africa Continental Free Trade Area (AfCFTA), instituted by the African Union (AU) and headquartered in Accra.
The Africa Prosperity Dialogues series offer a strategic platform where the movers and shakers of the African economy elevate the economic integration objectives from ambitions to real actions.
Set in Accra, Ghana, where the African Continental Free Trade Area (AfCFTA) Secretariat is headquartered, the APD is a one-of-a-kind event where African leaders from diverse areas of national endeavour gather each year to expedite, among other things, the implementation of the agreed initiatives within the AfCFTA trade bloc and shape the Africa Agenda for Action.
APD brings into practical focus, the continent’s critical challenges and industrialisation priorities and advance aggressively the commercial and infrastructural interventions to achieve the vision of an Africa Beyond Aid. The APD is an annual conference held every January.
APD is a summit of the highest political and business decision-makers in Africa, supported by various leaders, who propose practical, actionable initiatives to enhance trade in Africa and create prosperity for Africans. The Summit accelerates investment and amplifies public-private partnerships.
