Will mobile money cannibalise banks? Not really says GSMA Executive

Africa is adopting mobile technology faster than any other region and it is leveraging the power of mobile technologies to do business. It is estimated that the mobile ecosystem will add more than US$150 billion in value to Sub-Saharan Africa’s economy by 2022, equivalent to almost 8 per cent of the region’s GDP. In an exclusive interview during the recent GSMA M360 Africa Series, Goodluck Akinwale, the head of GSMA in Sub-Saharan Africa told Julius Bizimungu of The New Times about the trends in the Mobile Technology sector and the potential at play. Part of the conversation was mobile money. Is it timely? Mobile money is one of the jewels in the crown for Sub-Saharan Africa and it’s a place where we have excelled, and we are working with the industry and all stakeholders to ensure that we continue to excel in this space. This excellence is going to depend on supportive regulations, supportive taxation policies and moving the focus from person-to-person payments to using mobile money to develop the framework for person-to-government payment, for business-to-government payments and also for government-to-person payment. GSMA has a strong and growing presence in Africa, how would you describe the telecoms landscape in the region? The telecoms landscape in Sub-Saharan Africa is encouraging. If you look at key indicators, we continue to grow in terms of unique mobile subscribers. Even though the growth rate has sort of slowed down compared to five, six, seven years ago, we are at an annual growth rate of almost 5 per cent, which is almost twice the other regions in the world. We are growing and we continue to see more and more adoption of Broadband internet. This is also driven by the penetration of smartphones. The industry is doing well in terms of contribution to GDP with the mobile ecosystem contributing about 7 per cent and we expect this to go to 8 per cent in the next two to three years. But it’s not just a positive story. The industry has been a subject of sector-specific taxation. Some of these taxation practices are beginning to curb take-up and the barrier to entry. Imposing taxes in Africa is definitely not going to help in terms of industry purpose of connecting everybody and everything to a better future. Can telecoms do more to drive the mobile revolution? I can say that the mobile industry remains and continues to retain primary responsibility for connecting people. There is nobody else that is building the infrastructure like the mobile industry – nobody is putting up base stations like it does. All the other players are riding on mobile infrastructure, so you find all the OTTs [over-the-top services] rely one hundred per cent on infrastructure that has been built by MNOs [mobile network operators]. I think that going forward MNOs will continue to play in this space, and they must also innovate so that they can remain very relevant in the value chain. Let’s talk integration between telecoms and financial institutions? In terms of the alignment between the telecom sector and financial institutions, we have curved a very good niche in the area of mobile money. There used to be a myth that mobile money would cannibalise banks, but we see that data is proving otherwise. In markets like Kenya which probably has been the most prominent country in the world for mobile money, we are seeing that mobile money is actually driving the opening of proper bank accounts. It has created an awareness of the potential of accessing banking services on telephones. A lot of people in conjunction with mobile money M-Pesa type of accounts have also used phones to do proper mobile banking. I think there is a good example of good synergy between the two. More than ever, ATM and all points of sale terminals are starting to rely and sit on mobile networks. The numbers of mobile money operations are increasing. The number of active mobile accounts are equally increasing. Is that all for the industry? Not really. We need regulation and supportive policies in some markets in Africa like in Nigeria where there is a big opportunity to scale. We need Policy to allow mobile money to be telecom-led and to make it less bank-focused. The only thing hampering the continued scalability of mobile money is policy and regulation. And also, we are very concerned with some of the new taxes and fiscal measures for mobile money. We are concerned that mobile money is being associated with taxes levied on some of the sinful players in the industry like tobacco and alcohol. It’s now becoming a focus of different kinds of taxes with Uganda being a classic example. [Uganda recently introduced a 1 per cent exercise duty on all mobile money transfers]. But I am glad to report that the government is reconsidering and there is expected to be some mitigation so that we do not see the emerging trend of people returning back to cash. Give us an overview of the M360 Africa Series that Kigali just hosted? M360 Series is a range of more regionally-focused GSMA conferences in different parts of the world. For us in Africa, we like to think that M360 Africa is our own mobile congress. It was born out of research and engagement with attendees at the Mobile World Congress who often express the desire to have closer and more regionally-focused interactions, and this is what has led to M360 Series. In Africa we have two; M360 West Africa which targets West Africa and with very strong francophone West Africa content, and the more pan-African M360 which happened here in Kigali. What are the outcomes from these series of interactions? The outcomes are always driven by the theme of each conference. But in a nutshell, one bigger outcome for a lot of things that we are doing is that we are seeing progress with modernisation of regulatory and policy environment in Sub-Saharan Africa. As we address these issues at conferences and at roundtables, the discussions are beginning to have an impact on our regulators and policymakers and together we are crafting a way forward for Sub-Saharan Africa. What was the Kigali conference intended to achieve specifically? This conference had a few deliverables for us. On Monday (last week) we had the Africa Policy Day where the focus essentially was around privacy, data protection and identity. We had representatives from several African countries and also from data protection authorities sit down and try to break down a lot of privacy issues faced by the continent. As you know privacy is top of the agenda in the digital world. editorial@newtimes.co.rw

News

Will mobile money cannibalise banks? Not really says GSMA Executive