Perspectives 2019 2020 Public Sector

42 Mobile Money Momentum: The Race Towards Interoperability, Interconnectivity and Inclusivity Across Sub Saharan Africa Expansion of mobile subscriptions and mobile money ecosystem In 2018, there were 456 million unique mobile subscribers in Sub-Saharan Africa of the one billion plus population — representing a subscriber penetration rate of 44%. Sub-Saharan Africa is the fastest growing region, with a CAGR of 4.6% and an incremental 167 million subscribers over the period to 2025 (Source: GSMA). Half of the additional subscribers will come from five markets; Nigeria, Ethiopia, Democratic Republic of Congo (DRC), Tanzania and Kenya. In particular, Ethiopia’s new government has signaled the easing and opening up of foreign participation in its 80 million strong economy, which will attract investors in the mobile money and fintech communities. The total regional subscriber base will exceed just over 600 million by 2025, representing around half the population with West African States continuing to lead. Across the wider region, mobile data usage will grow four-fold by 2024. Figure A. GSMA Mobile Economy Statistics (Source: GSMA Mobile Economy Sub-Saharan Africa 2019) 2018 2025 Unique mobile money subscribers 456 million 623 million Mobile subscription penetration Rate 44% 50% Mobile internet users 239 million 483 million Mobile internet penetration rate 23% 39% Smartphones % of total connections 39% 66% Mobile Money Matures from Kenyan beginnings to Regional African ambitions Mobile money is the technology that allows people to receive, store, and spend money using a mobile phone device. Based on a combination of simplicity, convenience, and safety, mobile money has risen worldwide and become a real alternative to bank accounts and payment services in several emerging and frontier markets (Source: Citi GPS Report). Sub-Saharan Africa remains the nexus for mobile financial services and given the urgent need to innovate for progress. In 2018, there were 395 million registered mobile money accounts in the region, representing nearly half of total global mobile money accounts. The region is now served by more than 130 live mobile money services, many of them led by mobile operators, and a network of more than 1.4 million active agents. Today, more than 60% of the adult population has a mobile money account. Nearly 9 in 10 registered mobile money accounts are in East and West Africa. (Source: GSMA The Mobile Economy Sub-Saharan Africa 2019). Citi’s Mobile Money Model attempts to forecast future mobile money growth in the emerging markets based on key variables that will determine the speed of adoption. Markets with substantial upside for mobile money growth represent areas where these mobile money applications challenge the status quo. We look at factors such as cash usage, alternative payment methods, banking penetration, demographic change, and the regulatory and institutional environment. These are the inputs we used: • Mobile money success drivers • Cash dependency • Alternative payment options e.g. credit cards • Unbanked population: Percentage of people with bank accounts; • Demographics: change in urban population mix • Regulatory and institutional support for mobile money adoption