By Bright Ntramah and Doreen Ampofo
The African Union (AU) has adopted President Akufo-Addo’s proposal for mobile money interoperability across Africa. This initiative, which is seen as a significant step towards economic integration, aims to enable seamless transactions and economic integration across the continent.
At the AU Mid-Year Coordination Meeting in Accra, Ghana, President Akufo-Addo who is the AU Champion on Financial Institutions presented two reports. These are the “Establishment of the African Union Financial Institutions (AUFIs)” and “Scaling up Interoperability for Economic Integration: Using Mobile Money to Buy and Sell Across Africa.” The reports were endorsed by the AU, paving the way for implementation of mobile money interoperability across Africa.
The interoperability platform will create a seamless currency exchange platform for Africans to buy and sell from each other, using their own local currencies electronically and without reliance on any third foreign currency. The adoption of this initiative is expected to boost intra-African trade, promote economic integration, and enhance the livelihoods of Africans especially with the implementation of the African Continental Free Trade Area, AfCFTA.
The total value of mobile money transactions was recently estimated to be over $1.26 trillion, according to GSMA, that is around 40% of Africa’s GDP. In regions like West Africa, financial inclusion has significantly improved due to mobile money, rising to 71% and growing. East Africa boasts a 73% mobile money penetration rate, while Southern Africa stands at 45% and growing. With over 70% of global mobile money transactions occurring in Africa, this move has the potential to unlock tremendous economic opportunities for the continent.
President Akufo-Addo emphasized the importance of mobile money interoperability, stating that while creating business opportunities and helping to tackle unemployment among the youth, continent wide interoperability will also make it easier for SMEs to conduct business and expand their reach.
The AU has called upon member states, regional economic communities, and relevant stakeholders to commit to achieving mobile money interoperability by 2027. This includes bringing all member states on board the Pan-African Payment and Settlement System (PAPSS), allowing cross-border mobile money interoperability, and developing a continental regulatory framework for mobile money operations.
The adoption of mobile money interoperability is a significant step towards achieving the African Union’s goal of creating a single, unified market for Africa. It is expected to promote economic growth, reduce transaction costs, and enhance the overall economic integration of the continent.
