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Mobile money services have significantly boosted Kenya’s economy, adding Sh3.1 trillion ($24 billion) to the country’s Gross Domestic Product (GDP), according to a recent report.
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The study, titled ‘Mobile Money’s Impact on Economic Growth in Five African Markets’, highlights mobile money’s significant impact, particularly in the manufacturing and real estate sectors, where digital transactions have been crucial for financial inclusion and business development.
In Kenya, mobile money made up 8.6 percent of the total GDP, reflecting a 20 percent increase from 2022.
“The results reaffirm earlier studies showing mobile money’s vital role in fostering long-term economic growth and improving financial inclusion,” the report stated.
In five African nations—Côte d’Ivoire, Ghana, Kenya, Senegal, and Tanzania—mobile money services boosted GDP by an estimated 8 to 10 percent compared to a scenario without digital transactions.
This growth has more than doubled over the past decade, increasing from 3.9 percent in 2013, surpassing the Sub-Saharan Africa regional average of 4.5 percent.
The report also highlights regulatory challenges that could limit future growth.
For example, Kenya faces issues like the absence of government-backed identity verification solutions and its grey-listing by the Financial Action Task Force (FATF) in 2024.
“Enhancing regulatory frameworks could unlock even more economic potential,” the report noted.
Outside Kenya, mobile money has had a significant economic impact in other countries. In Tanzania, it contributed $15 billion to GDP, benefiting sectors like manufacturing, finance, and insurance.
In Côte d’Ivoire, mobile money’s economic impact is comparable to that of the information and communication sector, while in Ghana, its influence rivals that of the manufacturing and transport industries.
A notable development in 2024 was the reduction in cross-border mobile money remittance fees, with average charges dropping to 3.54 percent, making it the most affordable option worldwide.
However, mobile money still accounts for only 4 percent of international remittances, indicating room for growth.
With ongoing investments in digital infrastructure and favorable policies, mobile money has the potential to further fuel economic growth across Africa, solidifying its position as a transformative financial tool.
