Tanzania, the East African nation has currently registered 3.2 million subscribers in mobile money and the market is expecting to grow to $120.4 billion by 2027 from a value of more than $54.5 billion recorded last year.
According to a report for a quarter ending June 2022 by Tanzania Communication Regulatory Authority (TCRA) pointed out that in June 2022, 343,639,879 mobile money transactions took place, which recorded a total transactions value of $4.95 billion. The report also said that $4.55 billion were recorded in May and $ 4.4 billion in April, 2022.
The TCRA’s report said that Vodacom Tanzania’s Mpesa dominating the market shares by 39 per cent followed by Tigo with Tigo Pesa (26%), Airtel with Airtel Money (22%), Halotel with Halopesa (9%) as well as TTCL with (4%).
“In June 2020, the country recorded a total value of $4.6 billion and despite the up and down of mobile money, in June this year, we have seen an improvement recording of USD 4.95 billion almost $5 billion, this is not a bad trend but more efforts should be taken to improve the situation,” a Dar es Salaam based economist Juma Khamis said.
He added: “Therefore the expectation of a mobile money transaction to reach $120.4 billion by 2027 will be possible if the country continues to reduce the charging cost on mobile transactions on withdrawing or sending.”
However, the decision by the government to reduce the mobile money levy from 10 to 40 per cent from October 1, 2022, was received with joy by many Tanzanians, saying the move will conversing many people to continue using mobile money.
“We thank the government for listening to many complaints from its citizens; totally the levy on mobile money transactions was a financial burden to the people and the economy,” a political scientist Samson Emma told this magazine.
He noted: “The government’s decision on imposing levies to mobile money transactions wasn’t bad, the taxes were intended to be used to construct health centres and classrooms, and to fund other social projects. But the government should establish levies that are friendly so as to attract more transactions.”
What mobile firms said
Vodacom Tanzania Acting managing director Hilda Bujiku speaking during the briefing on the company’s Annual General Meeting held at the end of September, she said:
“During the year ending March 2022, we have recorded a Sh103.8 billion revenue loss due to mobile money transaction levies but the government decision to cut mobile money transactions levy by between 10 and 50 per cent, is encouraging.”
The Vodacom Tanzania Boss underscored that the move by the government to cut the mobile money transactions levy will help to recover the loss that Vodacom incurred during the last financial year due to the introduction of mobile money transactions levy.
Airtel Tanzania communication director Beatrice Singano said: “We have been in talks with the government on how to make telecom services affordable. Through the talks, we managed to established Bila tozo product, a product that absorbing the cost of levy when sending and withdrawing money amounting up to Sh29, 999 using Airtel Money without any additional cost.”
Kudos to President following the public outcry
The business community and the public, in general, applauded President Samia Suluhu Hassan after ordering the Finance and Planning minister, Dr Mwigulu Nchemba to review the mobile money transaction charges.
“President Samia’s order to the Finance Minister on scrapping levies to the mobile money transactions has to be applauded because it was a good decision due to the fact that mobile money is a key driver of socio-economic growth by creating employment, driving business productivity, facilitating savings and facilitating investment,” Nicolas Gilliard, a Dar es Salaam senior journalist and blogger told this magazine.
Gilliard insisted: “If the country wants to have a stable economy, it must improve mobile money services because this is the main driver of financial inclusion that used to contribute directly to Tanzania’s economic growth and social development objectives.”
“After the scrapped of the levies in mobile transactions, we are now observing many people again using mobile money; we are going to continue observing mobile money stimulating the development of other sectors including agriculture, health, transport and education,” he concluded.
However, announcing the scrapping of the bank services levy and cut in mobile money transactions levy in September, Dr Nchemba said the government’s levies were accounting for a small share of the total charges in bank services.
The Minister insisted that by sending over Sh3 million electronically, one had to incur a total cost of Sh14,000 with only Sh4,000 going to the government as levy and the rest being taken by banks as tariffs.
The state removed levies on withdrawals of up to Sh30,000 made through bank agents and automated teller machines (ATMs).
“The scrapped levies will also include those on money transferred from bank accounts to mobile networks, money transferred within the same bank and money transferred from one bank to another,” Nchemba said.
Mobile Money in Africa
Africa now accounts for 70% of the world’s $1 trillion mobile money value. The value of Africa’s mobile money transactions edged up 39% to $701.4 billion in 2021 from $495 billion in 2020, highlighting the future of African banking is mobile. GSMA's figures released on April 21, 2022, show the volume of mobile money transactions jumped 23% to 36.7 billion in 2021 from 27.5 billion in 2020.
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