Nigeria falls further behind Kenya, Ghana on Mobile money transfers

Nigeria is still several miles away from catching up with its African peers on mobile money transactions, despite boasting over 155 million active mobile phones, the highest number in Africa and seventh in the world.

According to data obtained from Nigerian Inter-Bank Settlement System (NIBSS), 21 mobile money operators (MMOs) licensed by the Central Bank of Nigeria (CBN) achieved N1.1 trillion volume of transactions in 47.80 million deals a 45.5 percent increase compare to N756 billion recorded in 2016.

However, this not only accounts for just 1.01 percent of the total e-payment transactions in Nigeria for 2017 but also fell below the value of transactions recorded in Ghana and Kenya in 2017.

The Central Bank of Ghana in its last report on bank performance said mobile operators in the country recorded total mobile transactions in 2017 worth N12.5trillion US$35.9bn a 98.5 percent growth from last year.

Similarly, Kenya Africa leader in mobile money operation also recorded 89 percent increase on the value of transaction to N12.9 trillion (US$45.3bn).

“The findings illustrate the difficulty of cracking the financial services market in Nigeria via mobile payments services, hence the need for MMOs to focus on their primary market of deepening digital inclusion in the grassroots,” said John Chukama a Consultant Agency Banker.

The NIBSS report showed that the total number of mobile money users stood at 2.3 million in 2017, which is less than 37.3 million in Kenya, and Ghana’s 11.119 million.

Razaq Ahmed Chief Executive Officer, of Cowry Wise a Fintech company, blamed the model employed by the government in regulating the sector.

Speaking to BusinessDay he said, “The fundamental challenge to mobile money adoption, growth and value delivery in Nigeria is the bank-led model currently in place, this is different from the Telecom-led model operational in countries like Kenya. The CBN has the regulatory responsibility to define the mandate of each player in the entire value chain.”

Agbolade Odunyemi, Digital Finance service consultant, also noted that Nigeria struggle in the last 5-10 years bothers on regulation, appreciation of the current financial service landscape and products, proper positioning and right business cases for the service.

“Ghana today has a national switch that’s less efficient than what Nigeria has as well as less card adoption, Kenya just recently adopted National Switching service with Banks coming together as well as Visa. These are conditions for mobile money to thrive,” he stressed

CBN, as part of its policy to bring the unbanked into the fold of formal banking system, launched mobile money services in 2011 and so far, 21 organisations, bank and non-bank, have been issued operating licences.
CBN early this year set a target of N2 billion recapitalisation by July 1 for all operator’s and observers believe 15 could operators could be affected.

Presently the players in the space are a mix bag of Banks and telcos including AfriPAY – UMo, GTMobileMoney, FirstBank/Pridar – FirstMonie, eTranzact – PocketMoni, PagaTech- Paga, Fortis MFB – Fortis Mobile Money, Stanbic IBTC, Monitize, FETS – my.wallet, Ecobank Mobile Money, . Zenith Bank – EazyMoney, Diamond bank mobile app.