Mobile Money, Remittances Play a Huge Role in Kenya’s GDP – Report

According to a new whitepaper released on Thursday by Global Voice Group (GVG), a global provider of ICT and RegTech solutions for governments and regulatory bodies, mobile money, and remittances will continue to play a significant role in Africa’s economic development if they are supported with tools to boost data-driven transparency and compliance.

The whitepaper indicates that the market for digital financial services is rapidly developing, at a rate that is difficult to estimate precisely.

This trend is especially visible in mobile money (MM), a critical tool for fostering financial inclusion in many African countries.

Based on the whitepaper, data technologies have the potential to revolutionize government by enabling evidence-based decision-making.

They enable policymakers to collect and analyze vast amounts of data rapidly and efficiently in order to provide useful statistics.

This can help them better comprehend the difficulties confronting the digital financial sector and make evidence-based decisions.

In response to the whitepaper’s conclusions, GVG Chief Delivery Officer Edouard Docteur has asked for increased investment in digitization to combat illicit finance.

“With the massive increase in digitization, African governments must ensure the implementation of effective monitoring solutions in the mobile money and remittance sectors,” he said.

“The whitepaper emphasizes how African governments must invest in regulatory frameworks and leverage technology to ensure compliance, streamline taxation processes, protect end-user data, improve Know-Your-Customer (KYC) procedures, and mitigate risks associated with money laundering, financial terrorism, and scams,” he continued.

Remittances contribute significantly to Kenya’s GDP, with data from the Central Bank of Kenya (CBK) indicating that the value of mobile money transactions reached 56.8 percent of GDP by the end of 2021, up from 48.7 percent in 2020, and was projected to rise to 68 percent by the end of the fiscal year 2022-2023.

According to the data, remittance inflows were $352.1 million in May 2023, up from $320.0 million in April 2023, a 9.9 percent rise.

Inflows reached $3,997 million in the 12 months to May 2023, up from $3,992 million in the same time in 2022, a 0.1 percent rise.