Obesity is on the rise globally, with 1 billion people predicted will be living with the disease by 2030. Obesity is no longer just a disease of rich countries. The incidence of the disease is now more pronounced in lower and middle-income countries, especially in poorer and more vulnerable communities. Evidence from recent systematic review and meta-analysis shows that as at 2020, there were more than 21 million overweight and 12 million obese ‘persons in the Nigerian population aged 15 years or more, accounting for an age-adjusted prevalence of about 20 percent and 12 percent respectively’. Figure 1 below further shows clearly that the number of people living with obesity (BMI>25kg/m²) in Nigeria is rising steadily. The causal factors for increased body mass index (BMI) include eating patterns, physical activity levels, and sleep routines
The World Obesity Federation (WOF) also shows that the Nigeria has a high national obesity risk with a score of 7.5/10. The WOF also shows that Nigeria’s chance of meeting the UN adult obesity targets for 2025 is very poor (sadly 0%) for both men and women. Failing to meet the obesity target jeopardizes other NCD targets, including the World Health Organization’s target of a 25% reduction of premature deaths from several leading non-communicable diseases by 2025.
People living with obesity may be at a greater risk of other chronic diseases such as type 2 diabetes, cardiovascular disease, many types of cancers, and premature death. Obesity increases the risk of certain mental disorders such as depression. The disease is also associated with cognitive decline, enhanced vulnerability to brain impairment and accelerate age-related diseases of the nervous system. Moreover, childhood obesity can severely affect children’s physical health, social, and emotional wellbeing, academic performance and self-esteem. Obese children also more likely to experience respiratory problems such as asthma, sleep disorders such as difficulty breathing while asleep (sleep apnea), high blood pressure and elevated blood cholesterol. …..
Obesity has significant impact on the Nigeria economy. Data from the global obesity observatory shows that in 2019, the economic impact of overweight and obesity in Nigeria was estimated to be over N1 trillion (US$2.37 billion). This is equivalent to US$12 per capita and 0.5% of GDP. Direct costs and indirect costs made up 20.2% and 79.8% of total costs respectively. By 2060, the cost implication of obesity, including healthcare and reduced productivity, among others, will amount to over US$35.38 billion. Without urgent intervention, the continuing increase in adult and childhood obesity will overwhelm the already precarious health care system of Nigeria and increase the high risk of lost productivity in the Nigerian economy. Therefore, the need for substantial policy interventions to prevent the rise of obesity in the nation cannot be overemphasized.
Currently, Nigeria’s health policies, interventions and actions aimed at reducing the prevalence of obesity include promoting breastfeeding, pre-packaged food (labelling) regulations, food-based dietary guidelines and the recent tax on sugar–sweetened beverages. Excess sugar consumption, especially from sugar-sweetened beverages has been consistent linked to increased risk of overweight and obesity in children, adolescents, and adults. Moreover, the World Health Organization (WHO) recommends taxation of sugar-sweetened beverages (SSB) to address obesity.
In 2021, Nigeria joined more than 54 other countries that have introduced taxes on SSBs. The SSB tax which is embedded in the Finance Act of 2021, levies a ₦10 tax on each litre of all non-alcoholic and sugar sweetened carbonated drinks. Recent development shows that the federal government commenced the implementation of the SSB tax on 1st June 2022.
Global evidence has consistently revealed that taxation of sugar sweetened beverages is an effective policy tool for reducing their consumption and consequently reducing the prevalence of sugar induced diseases including obesity. For example, a modelling study shows that the United Kingdom’s tax on soft drinks could potentially save up to 144,000 persons from obesity annually, prevent 19,000 cases of type 2 diabetes and avoid 270,000 incidences of decayed teeth. In South Africa, a 10% tax on SSBs was predicted to avert 8,000 type 2 diabetes’ related premature deaths. Similarly, in Indonesia, empirical evidence shows that SSB tax can help to reduce the number of overweight and obese and prevent over a million cases of diabetes. In addition, numerous empirical studies shows that that effective taxes on SSBs can lead to significant reductions in Disability Adjusted Life Years (DALYs).
It is therefore evident and plausible to conclude that taxation of SSB in Nigeria has the potential to reduce the health and economic burden of obesity in the country. However, greater public support for the policy measure is needed in Nigeria, and the fiscal revenue should be earmarked for improving the healthcare system and as well as providing healthy alternatives such as safe drinking water.
The digital economy is on the exponential rise due to its capability to transform and revolutionise economies and societies, influencing how we work, live, and interact. Otherwise known as digitalization, the digital economy refers to economic activities facilitated by digital technologies and digital data in businesses and organizations. One of the sundry blessings of globalisation, as it relates specifically to the thrust of this article, is its ability to necessitate a strategic cross-border collaboration between nations or/and continents in the digital space. It is well-documented that countries such as the United States, China, Singapore, and Chile have developed strategies to integrate their data governance and policy frameworks to drive the growth and development of their digital markets. This trend does not exclude continents like the European Union (henceforth represented in this article as the EU) and Africa.
This article examines the potential benefits of digital collaboration for the sustainable growth and development of Africa's digital economy. It explores the potential outcomes of this collaboration for Africa, such as the integration of data policy and frameworks for economic growth, closing the gender gap, fostering innovation-driven digital entrepreneurship, establishing data governance across Africa, and promoting the adoption of the EU's data model for protecting digital rights. In addition to attracting public-private investment and promoting digital inclusion. The article concludes by identifying the steps that Africa must take to harness the potential of the EU-Africa digital collaboration fully.
The EU-Africa Digital Collaboration – An Exegesis
Precisely on the 22nd of April, 2015, history was made in the faraway Brussels, where the College of the European Commission hosted the College of the African Union Commission for their annual meeting. The EU is never a stranger to Africa. For decades, it has been Africa’s biggest trading partner. Statistics, according to United Nations Conference on Trade and Development (UNCTAD), 2022, claim that almost a fifth of global Foreign Direct Investment (FDI) flows in Africa come from EU companies. The meeting in April 2022 provided these two strategic partners, who share common visions, aspirations and challenges globally, with the opportunity to formally design a political framework of partnership that would yield enduring benefits for each other. Christened the Joint Africa-EU Strategy (JAES), the framework for the EU-Africa partnership, popularly regarded as the first and only intercontinental partnership strategy ever, was aimed at tackling together issues of common concern such as peace and security, democracy, good governance and human rights; human development; sustainable and inclusive developmental growth and continental integration, and other global and emerging issues.
Meanwhile, today, the EU-Africa partnership has extended beyond the scope of the afore-listed concerns. It has birthed a strong and effective digital cooperation aimed at transforming and developing Africa’s digital economy. On different occasions, the continents have demonstrated strong commitment towards promoting exchanges and partnerships with the private sector, civil society organisations, enterprises, and data policy experts in the digital field. For instance, in 2018, both partners launched the EU-AU Digital Economy Task Force (DETF) to identify tangible policy recommendations and propose bona fide steps towards tackling significant barriers and enhancing cooperation in the digital field.The policy recommendations identified by the EU-AU Digital Economy Task Force are mirrored in the AU Digital Transformation Strategy for Africa 2020 – 2030. Some of these policy recommendations include but are not limited to the development and implementation of regional and continental digital strategies, the development and implementation of data protection and privacy policy and regulation in line with the Malabo Convention, the promotion of regional/continental licensing mechanisms to facilitate establishment of regional/continental operators’ networks and service providers, and the facilitation of policy coherence for the achievement of digital transformation in Africa The European Data Strategy mentions EU-Africa cooperation on data, stating, “the EU will support Africa in creating a data economy for the benefit of its citizens and businesses”.
With technological capabilities and dependable workforce (in terms of the concentration of digital policy experts) that can drive the realisation of an innovative digital economy, the EU holds an enviable position as a formidable agenda setter for digital business and digital governance on the global front. It boasts as the world’s most advanced digital regulatory framework. The EU has set notably high data protection and privacy policy standards through its adoption in 2016, General Data Protection Regulation (GDPR) after which most countries, especially in Africa, modelled their respective national data protection standards. Highly committed to the protection of personal data and privacy as a fundamental right of every data subject, the EU understands that setting high standards contributes in no small measure towards ensuring trust in the digital economy. Obviously drawing on the intercontinental appeal of its GDPR, the EU is currently setting an enviable agenda to promote and regulate the Digital Single Market for the next decade. This agenda includes proposals like the Data Governance Act, Digital Markets Act, the Digital Services Act and the Artificial Intelligence Act (the most recent addition).Interestingly, the EU’s data sovereignty provision has helped shape and strengthen its policy space.
Although moving at its own pace, which is considered somewhat slow when compared to that of the EU or other fast-paced digital economy, Africa is still making efforts to boost its digital economy on the global level. But if Africa, like the EU, the US and China, wants to catch up with the rest of the world, coordinated efforts must be made to bring about its digital transformation, which is being constrained by continent-wide challenges that range from connectivity issues, a crisis of capital to poor data protection regulatory framework. Currently, Africa’s domestic digital economy is being strategically leveraged for economic development. The method for implementing region-wide approaches, to create an enabling environment for digital transformation, is being developed. In line with the European Data Strategy, the EU has expressed its readiness to support Africa in creating a data economy to benefit its citizens and businesses. This reinforcement will give a fillip to the actualisation of the EU-Africa cooperation on data. As expected, the African Union (AU) is genuinely open to a sustainable collaboration with the EU, characterised by respect, transparency and equal opportunity. In the following section, the potential positive effects of the EU and Africa’s digital collaboration on Africa’s journey towards experiencing massive digital transformation in the next decade are discussed.
Integrating the EU and Africa’s digital markets for economic growth
The EU-Africa digital collaboration proffers a great opportunity for the integration of the continents’ digital markets. This development is, indeed, the pathway to unlocking a chain of economic values for the two continents. However, Africa stands to derive a welter of benefits from this collaboration, which cannot help but accelerate its pace towards the much desired digital transformation. The greatest of these benefits is the integration of all the digital markets across all the African member states to create a single digital market. This is enabled by the creation of legal frameworks, the harmonisation of regulations across countries and the strengthening of the institutions that are required to sustain the digital transformation. There is no gainsaying that, given the potential of this EU-Africa digital collaboration, the goal of inaugurating the African Continental Free Trade Area (AfCFTA) will be accomplished. It is projected that the EU-Africa digital collaboration, by the year 2025, will have grown Africa’s internet economy to $180 billion. African businesses, while engaging with the EU’s technological firepower that is a spinner of accelerated growth and development, would be repositioned to gain strategic access to a large consumers base in the world’s third-largest economy.
Bridging the gender divide in the African digital space
Findings from evidence-based research revealed that, in Africa today, the men use digital technologies more than the women do, thus bringing about a manifest gender digital divide. It is claimed that, as gender inequality pervades the physical world, so it does in the digital world. In Sub-Saharan Africa, there is a wide gap in women’s digital access when compared with men’s. Also, the digital penetration rate for the women is by far lower than for men. Many women in Africa either use simpler feature phones that do not support mobile internet use or do not have any. Women have been discovered to be much less likely than men to own a smartphone. Given their ownership of smartphones, African men have far more access to digital platforms and services than African women do. This development is not unconnected with the glaring disparities between both genders in terms of digital literacy and economic attainment. The EU-Africa digital collaboration will steer African organisations, businesses and governments towards building a shared digital future that promotes high digital inclusion and adoption, thus bridging the manifest gender digital divide in Africa’s digital space. When men and women have equal digital adoption, women will have access to the same diverse opportunities as men do.
Boosting digital entrepreneurship and innovation (growth of digital SMEs)
One of the four pillars upon which the aspiration of the EU-AU Digital Economy Task Force for the transformation of Africa is anchored is innovation-driven digital entrepreneurship. The other three are access to affordable broadband connectivity, digital infrastructure, digital skills, and e-services, which include e-government, smart cities, e-commerce and e-health. The EU-Africa digital collaboration will help create the required environment for entrepreneurs and businesses to thrive, as well as encourage innovation that will generate many socio-economic opportunities for the development of each African nation and the continent as a whole. A development such as this will promote small and medium-sized businesses, protecting them from digital-related threats which constantly put their operations in harm's way.
Capacity building and job creation
With the improved and affordable internet broadband connectivity, which will be one of the benefits of the EU-Africa digital collaboration, Africa will greatly benefit from improved internet connectivity for teaching students and learning in African training institutions. Access to virtual or online training, which will boost capacity, will be enhanced. This development will help Africa catch up with the developed nations, given its ability to pioneer groundbreaking research in the areas of science, technology and even humanity, all of which will attract growth and development to the continent. Also, job opportunities will be created as a result of accelerated digital infrastructural development, which will enhance employment and productive engagement of citizens.
Unlocking data governance in Africa
Today, the EU, alongside other global digital market giants like the US and China, is a model for digital governance. It has succeeded in making its mark in the global digital economy. The EU’s approach to governing the digital market and the regulatory legislation it has enacted to manage cross-border data flows is enviable. As earlier noted, the EU’s GDPR is so effective that most countries of the world have adopted it as their national standard of the regulatory framework of managing cross-border data flows in order to prevent data-related harms. This amazing digital capability of the EU, if it were to be adopted by Africa, would result in the latter having an effective data governance framework which would guarantee strategic digital transformation in the continent. Further, Africa will be stimulated to steer its states towards harmonising their disparate legislations into central or regional data legislation which ensures effective data protection in all the states.
Conclusion: Making the EU-Africa digital collaboration count
Given the aforementioned benefits that Africa stands to derive from its digital collaboration with the EU, Africa must do its utmost to ensure that this collaboration is successful. It must put in place strategic measures that will enable the collaborative efforts to yield the desired result. Hence, the hands of all the major stakeholders in Africa’s digital market must be on deck. Both policymakers and the private sector players in Africa’s digital space must demonstrate commitment towards creating a digital transformation-enabling environment that promotes the stakeholders’ dialogue; strengthens the standards for regional data use and cross-border data flows. Africa’s digital collaboration with the EU would undoubtedly be seen as a step towards a great economic boom for the continent, given the EU’s high global standing for having an advanced regulatory framework for data protection. Therefore, it is crucial for Africa to embrace this golden opportunity to truly become the next frontier for digital revolution.
Today, the 24th of January, the world celebrates the International Day of Education to recognize the role education plays in fostering peace and development. This year's theme is "to invest in people, prioritize education".
Education remains a veritable tool for eradicating poverty globally and achieving Sustainable Development Goals (SDGs). Without inclusive and equitable quality education, countries will not succeed in achieving gender equality and breaking the cycle of poverty that is leaving millions of children, youth and adults behind.
Over the years, CSEA has taken the lead in conducting large-scale evidence-based research on Education. One of our most recent engagements is the Research on Improving Systems of Education (RISE) Nigeria project, commissioned by the Foreign, Commonwealth and Development Office, which aims to understand how school systems in developing countries can overcome the learning crisis and achieve quality education.
The Centre is also part of the research organisations participating in the second edition of the Southern Voice “State of the SDGs” research which seeks to understand how the Covid-19 pandemic impacted education inequalities and learning trajectories. The first edition investigated three crucial questions: Exclusion in Education; Understanding synergies and trade-offs in meeting SDG4 in Nigeria and Global Systemic Issues.
CSEA is also conducting a comparative study of Accelerated Education programs and Girls Focused Education Models in Ghana, Nigeria, and Sierra Leone, commissioned by the Associate for Change.
To learn more about the outcomes of our research and policy recommendations, check out of some of our research on the education sector.
Learning assessments have played a key role in highlighting the extent of the learning crisis in Nigeria. The next step to addressing learning is improving assessments to close data gaps that still exist, and responding to evidence from them.
Large-scale learning assessments conducted in Nigeria have been crucial in examining the breadth and depth of the nation’s learning crisis. Results of learning assessments conducted over the last 25 years indicate five things:
Literacy and numeracy attainments at the basic school level are consistently low.
Attainment rates have been declining over time.
Foundational skills acquired at an early age stimulate advanced learning.
Assessing children early and at various grade levels is critical.
Any policy, effort, or programme to improve learning outcomes must be informed by context.
Nigeria continues to miss its financial inclusion targets. Many constraints around the formal banking system have meant that a greater percentage of the Nigerian population remains excluded from the formal financial sector. This article highlights the need to strengthen mobile money as a means of driving financial inclusion in Nigeria.
Introduction
The financial sector plays five crucial roles in the growth of any economy. One is easing the exchange of goods and services by providing a payment system that enables economic agents to pay for goods and services, thereby facilitating trade in the economy; Two is mobilising and pooling savings from savers and, thus, making the proceeds from such fund available for firms in need of funding Three is acquiring and processing information about enterprises and possible investment projects, thus enhancing efficiency in the allocation of investment funds in the economy; Four is monitoring investment and carrying out corporate governance; five is diversifying, increasing liquidity and reducing investment risk (Caporale, Rault, Sova, & Sova, 2009).
Among the five channels enumerated, mobile money finds its place within the first (easing the exchange of goods and services through the provision of a payment system which enables economic agents to pay for goods and services, thereby facilitating trade in the economy). Mobile money technology allows people to receive, store and spend money using a mobile phone. It neither requires one to own a bank account nor does it require internet. It is sometimes referred to as a mobile wallet (IGI-Global, 2022). Thus, it is a crucial driver of financial inclusion, especially among the unbanked in remote areas who also lack access to internet facilities and among traders in the informal economy. Mobile money gains its acceptance by this population demography as it requires minimal digital skills. If one can send an SMS using a mobile phone, they already have the digital skills to operate mobile money.
While Mobile money is considered a key driver of financial inclusion, there has not been enough attention by the Nigerian government to create an ecosystem where mobile money operations can thrive. Thus, leading to the inevitable consistent dwindling of financial inclusion. Since 2012 when the CBN launched the financial inclusion framework, progress has been slow due to several constraints identified by stakeholders, among which include the high capital cost of investments in mobile money, bureaucratic procedures and the requirement for KYC, which involves sim-NIN linkage. The federal government’s projection of financial inclusion in its 2012 National Financial Inclusion Strategy (NFIS), revised in 2018, was to achieve 70% financial inclusion by the year 2020. However, only 64% inclusion has been achieved in the last quarter of 2022, which is a variance of 6% from the target. Given that countries like Kenya, which prioritised mobile money as a key financial inclusion driver, achieved a remarkable increase in financial inclusion, it would be a smart strategy for Nigeria’s government to pursue a similar objective.
Due to existing obstacles in operating a formal bank in Nigeria, especially the need for too many document requirements for opening an account and lack of access to banks in remote areas, it can be argued that the Nigerian government cannot achieve its financial inclusion targets of 95% by 2024 without putting mobile money at the forefront of its Financial Inclusion strategy. But before further comments, it would be vital to explain what mobile money is about and how it works.
The Mobile Money project was jointly launched by the GSM Association (GSMA) and Western Union in October 2007 to help the financially excluded to access financial services (Bello & Adenuga, 2013). The initiative comes in three models, which are, the operator-centric model (which involves only the mobile network providers such as the MTN mobile money), the bank-driven model (which is set up and managed by the bank like the POS), and the collaboration model (involving both banks and mobile providers like the use of USSD) . The operator-centric model is the only model that does not require one to own a formal bank account, making it the easiest model for driving financial inclusion. The Network providers offer the technology, operate the transactions and compensate the system without bank involvement or the need for a bank. Because mobile operators already have a large customer base, they benefit from service fees, and in turn, customers are happy to make quick and convenient payment transactions, and the result is an economy with high financial inclusion.
Despite the fast-growing Fintech sector in Nigeria, Porteous & Omusi (2020) report that about 36.8% of the Nigerian population still lacks access to financial services, which necessitates a need for more flexible financial inclusion strategies such as the non-bank-centric mobile money models. This is evident from the statistics quoted by The Economist that the value of mobile money transfers and e-payments in 2018 was only 1.4% of the GDP in Nigeria, compared to 44% of Kenya’s GDP (The Economist, 2019).
(Account ownership at a financial institution or with a mobile-money-service provider (% of population ages 15+) - Nigeria, Kenya, Sub-Saharan Africa
As shown in Figure 1, financial inclusion in Nigeria is below the Sub-Saharan African average. Meanwhile, Kenya surpasses the Sub-Saharan African average, which could be attributed to the success of the M-PESA mobile money project.
This operator-centric model remains the key to driving financial inclusion among the poor, uneducated and unbanked. The model would ensure that all classes of society would have greater access to financial services. A good example of a successful operator-centric model is the M-PESA project in Kenya. M-PESA, which stands for mobile money transfer service, ‘M’ for mobile and “PESA” for money in Swahili, was introduced in 2007 in association with Safaricom, Kenya’s largest mobile network provider. Vodafone, the largest shareholder in Safaricom, founded and owns M-PESA. Since its introduction in 2007, M-PESA has seen tremendous success and serves as the best illustration of a typical m-money service for the unbanked and underbanked. Over 9.4 million consumers and more than 18,000 agents have used the M-PESA initiative since it began in 2007 for person-to-person (P2P) transfers. According to Bello & Adenuga (2013), there is hardly a home in Kenya that does not utilise M-PESA. In fact, up to 13% of Kenya’s GDP was transferred using M-PESA between 2009 and 2010. Through M-PESA, users can make deposits into an account held on their mobile devices, transfer balances to other users (including vendors of goods and services), and exchange deposits for cash via SMS technology.
Mobile money accounts have also begun to gain popularity in the rest of Africa. However, Nigeria is lagging. According to Global Findex latest data (2017), many African countries (especially Kenya) have shown remarkable improvement in ownership of mobile money accounts, but Nigeria has remained largely stagnant.
Figure 2. Ownership of mobile money accounts in Sub-Saharan Africa
As shown in the diagram in Figure 2, it is evident that Sub-Saharan Africa has made good progress in terms of ownership of mobile money accounts, moving from 12% in 2014 to 21% in 2017. In Kenya, while a small percentage did not have access to mobile money accounts in 2014, this changed drastically in 2017, with close to 100% of the population owning mobile money accounts due to the ease of use of the service. In Nigeria, however, the numbers have remained low at about 0-9% of the population from 2014 to 2017.
Currently, in Nigeria, the dominant form of mobile money is the collaborative model (between the banks and the mobile operators), i.e., the use of USSD to send money from your bank account to another bank account. The problem with this model is that it requires you to have a formal bank account. The tedious process and document requirements to own a bank account in Nigeria make it challenging for people in remote areas and villages to own and operate a bank account. Thus, necessitating the need for investments in operator-centric models. Although there are existing operator-centric models in Nigeria, such as the Paga wallet founded in 2009, the adoption rate remains minimal, which could be attributed to constraints limiting the private sector from innovating and expanding. Thus, the success of mobile money in Nigeria might require the collaboration (investments) of both the public and private sectors in forming public-private partnerships (PPP).
There is no doubt that mobile money has the potential to drive economic growth by encouraging savings which leads to investments. Beshouri et al. (2010) affirm that mobile money has the potential to allow two important questions to be addressed at the same time: on the demand side, it represents an opportunity for financial inclusion among a population that is underserved by traditional banking services. On the supply side, they explain that it opens up possibilities for financial institutions to deliver a great diversity of services at low cost to a large clientele of the poorest sections of society and people living in remote areas.
In the following section, four key facts about why the mobile money system should be prioritised in Nigeria are presented.
FACT 1: Nigeria’s high mobile phone penetration can support faster mobile money penetration
Although the M-PESA in Kenya has recorded massive success, Nigeria’s transaction volume in mobile money will be even higher due to its vast population. Since 2005, Nigeria has had consistently higher mobile phone penetration than the Sub-Saharan African average (WorldBank, 2022). As shown in figure 3, it is evident that in comparison to the Sub-saharan average (although still slightly lower than Kenya), Nigeria has had a higher mobile phone subscription rate since 2005, which shows the country’s potential in mobile money operations.
Given that Nigeria’s mobile phone penetration is still lower than Kenya’s despite having a higher population, the policy route to maximise mobile money will therefore include a strategy to increase mobile phone penetration in Nigeria
FACT 2: Mobile Money Drives Financial Inclusion
Credit and deposits are now easier to obtain by the unbanked as a result of mobile money service accessibility: mobile money lower transaction costs, particularly those associated with maintaining physical bank branches. In addition, Andrianaivo & Kpodar (2011) affirm that the increasing use of mobile telephony in developing countries has contributed to the emergence of branchless banking services, thereby improving financial inclusion. They add that mobile money allows expansion and access to financial services for previously underserved groups in developing countries, emphasising that this improved access to financial services for those who are underserved contributes to closing the infrastructure gap in the financial sector, particularly in developing nations where the expenses of travel and time are quite high for conventional banking services.
FACT 3: Financial Inclusion Contributes to Economic Development
Financial inclusion as a strategy has emerged as a global concern for policy, including in Nigeria. It is seen as a means of fostering inclusive Economic Growth and a transmission mechanism for eradicating poverty (Stephen and Wakdok, 2020). Access to financial services stimulates incentives for private investments made by people and thus promotes economic growth (Andrianaivo & Kpodar, 2011). Many empirical papers have presented overriding evidence of a positive link between financial inclusion and economic growth (Chakraborty and Abraham, 2021). The common channel through which financial inclusion impacts economic growth is that financial inclusion encourages savings which then lead to investment, and in turn, investment leads to economic growth. Financial inclusion (especially ownership of a mobile money account) also encourages entrepreneurial activities, especially in remote areas where there is a high risk of carrying physical cash. This growth of entrepreneurship helps to reduce poverty and foster economic development.
IMF Studies for African countries such as Kpodar and Andrianaivo (2011) have also shown that while mobile phone penetration positively impacts economic growth, the channel through which this happens is financial inclusion fostered by the use of mobile phones for financial transactions. These same findings are replicated in a recent study by Ifediora et al (2022) for African countries, where the authors demonstrate that ownership of mobile money accounts and mobile money transactions foster economic growth
Finally, the supply-leading hypothesis, which states that the development of the financial sector gives rise to an increase in economic growth, has been validated by several authors (McKinnon, 1973; Shaw, 1973; Schumpeter, 1934; Wesiah and Onyekwere, 2021; Apergis, Filippdis and Economidou, 2007; Vazakidis and Adamopoulos, 2011; Nyasha and Odhiambo, 2015). The authors are of the view that financial institutions and markets trigger economic growth through the efficient allocation of financial resources to the most productive investments.
Fact 4: Mobile Money Makes Lives Easier
Mobile money affects lives positively by making day-to-day transactions hassle-free. For instance, because of mobile money, people in remote areas can easily transfer money from any location to any location just by pressing a few commands on their mobile phones. They no longer need to commute to the bank to wait in a long queue before they can make a deposit. Thus, mobile money saves both time and cost. Secondly, mobile money drives a digital economy that makes people live happier with less banking stress. Another important benefit is that with mobile money, cash payments will be reduced, and traceable payment methods (especially in the informal economy) make it easy to prevent fraud. Back in the days when cash was used, anyone could easily deny that you made a payment to them. But with mobile money, it is easy to make such payments cashless, which is traceable and cannot be denied.
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