2018 - 2019 Edition of Citi Perspectives for the Public Sector

24 Banking without Barriers: Digitization across Africa, Middle East and Asia 1. Sub-Saharan Africa leads the way on mobile Sub-Saharan Africa (SSA) is experiencing a digital revolution. It is catalyzed by the rapid growth of mobile phone penetration, favorable demographics, continuing bandwidth infrastructure investments and a growing middle class which is adopting new cultural norms and buying behaviors. SSA leads the world in mobile money account use; it has experienced rapid advancement in a relative short timeframe. According to the Global System for Mobile Communications Association (GSMA), mobile adoption reached nearly 444 million users, or 44% of the 1.1 billion population in 2017. For many across this region, the mobile phone is not just a communication device but also the primary channel to get online, as well as a vital tool to access various life-enhancing services. Access to mobile connectivity is vital to empowering consumers and driving economic growth. The maturing mobile money ecosystem has facilitated digital access to many essential services, including education, health and utilities, while also enabling new business models that support the efficient and sustainable delivery of key services through mobile-based platforms. Of note is the nascent innovation in the agricultural value chain — critical because agriculture remains the key employer of labor in Africa, and a key contributor to GDP. Mobile network and money ecosystems now deliver information and value, which disintermediate the traditional middle- man and give direct access to markets. Mobile is driving innovation and inclusion Since the 2007 launch of M-Pesa in Kenya, mobile payments and collections have grown exponentially; SSA recorded the fastest adoption globally. The market has become increasingly sophisticated across East, West and Central Africa in terms of business-to-consumer (B2C) flows and consumer-to-business (C2B) flows. In the region, total mobile money users grew from zero to 277 million in a decade; they now surpass the number of bank accounts (178 million in 2015). GSMA figures show that 135 mobile money services are already live in 39 African countries and it estimates that by 2025 another 300 million users will come online. This mobile transformation is contributing to economic and social development across the region, driving digital and financial inclusion for millions in Africa. The market has become increasingly sophisticated across East, West and Central Africa in terms of business-to- consumer (B2C) flows and consumer- to-business (C2B) flows.