(3 minutes read)
· Covid-19 would have created disruptions in the supply chain,
kept the people indoors and cast shadows on economic growth of most of
the countries in Africa, but it has brought to the fore some positive
spin offs particularly for the mobile and e-payment companies
· One significant factor for this development is that mobile
money providers to attract more and more people as their clientele
have reduced or waived transaction fees
Covid-19 would have created disruptions in the supply chain, kept the
people indoors and cast shadows on economic growth of most of the
countries in Africa, but it has brought to the fore some positive spin
offs particularly for the mobile and e-payment companies. The most
benefited region is western Africa, where e-transactions were in the
backburner as compared to the East Africa. Safaricom, the largest
mobile and e-payment company, which has operations in many African
countries has scripted a radical change in the payment system in the
eastern Africa. In almost all countries in that region, Safaricom is
the largest player both in the mobile and e-payment space.
One significant factor for this development is that mobile money
providers are attracting more and more people as their clientele have
reduced or waived transaction fees. Coupled with this, the governments
are also encouraging digital payments to reduce person-to-person
contact to slow the spread of the virus. But a large canvas has to be
covered to catch up with destinations beyond Africa. For instance,
data point out that in Africa, only one in four adults are using
digital platforms to transact payments. That is very low compared to
many other countries even in the emerging economies.
Mobile and e-payment companies are hoping on Covid-19 for people to
switch over to digital cash payment to avoid personal contacts. Also,
mobile platforms can bring a large number of people from the informal
sector to the mainstream. Importantly, East Africa, particularly
countries like Kenya, Uganda and Tanzania have registered quantum
jumps in the number of people using digital platforms for payments.
Higher literacy of the people would have helped spread digital money
in this region. However, that is not the case with the West African
countries, where level of illiteracy is high coupled with cumbersome
documentation works to get a mobile connection.
