Home Business BoG Reports 186% Surge in Mobile Money Ecosystem Post E-Levy Reduction

BoG Reports 186% Surge in Mobile Money Ecosystem Post E-Levy Reduction

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E-Levy
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Statistics published by the Bank of Ghana reveal a significant 186% growth in Ghana’s mobile money ecosystem from November 2022, when the e-levy was reduced from 1.5% to 1%, to March 2024.

The Central Bank’s Fintech Statistics, covering the period from January 2020 to March 2024, highlight the ecosystem’s health by measuring the circulation rate of one cedi on e-money platforms—calculated by dividing the transaction value by the actual balance of float. In 2021, before the e-levy, the average circulation rate was over 20 times.

However, the introduction of the 1.5% e-levy in early 2022 caused this rate to drop below 10 times monthly, as Ghanaians employed strategies to avoid the levy, significantly reducing digital money transfers. This affected all types of transfers—wallet to wallet, wallet to bank, bank to wallet, and bank to bank. Consequently, the government raised only GHS93 million in the first two months, far below the GHS1.46 billion target.

In response, the government reduced the e-levy to 1% in November 2022, which positively impacted the mobile money ecosystem’s health. At that time, the mobile money float balance was GHS10.93 billion, and transaction value was GHS116.96 billion, resulting in each cedi circulating 11 times that month.

By March 2024, the float balance had risen to GHS18.69 billion, with transaction values reaching GHS576 billion, causing each cedi to circulate 31 times, a 186% increase from November 2022.

The Balance of Float represents the total cash deposits from customers, agents, partner banks, and the service provider’s funds against which electronic money is issued. The growth in the mobile money balance of float signifies its effectiveness in mobilizing funds outside the traditional banking system, highlighting its potential for national development.

A robust mobile money market fosters financial inclusion, job creation, economic activity, financial stability, tax collection, credit access, improved government services, transparency, accountability, economic efficiency, and data collection.

Furthermore, the total transaction volume for the first quarter of 2024 reached 1.86 billion, more than double the 492.4 million recorded in November 2022. The volumes were even lower during the period when the e-levy was at 1.5%.

Additionally, by the end of March 2024, registered customer accounts stood at 67.3 million (up from 54.46 million in November 2022), and registered mobile money agents increased to 835,000 (up from 689,361 in November 2022).

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