The African Union (AU) has approved President Nana Addo Dankwa Akufo-Addo’s initiative for mobile money interoperability across the African continent.
This initiative, deemed essential for Africa’s economic integration, aims to streamline economic transactions and boost intra-African trade and development.
The AU Heads of State and Government reached this decision after President Akufo-Addo submitted two reports for review at the Union’s Sixth Mid-Year Coordination Meeting of Regional Economic Communities in Accra last weekend.
The recommendations in the two reports, “Establishment of the African Union Financial Institutions (AUFIs)” or “Scaling up Interoperability for Economic Integration: Using Mobile Money to Buy and Sell Across Africa,” were endorsed unanimously by meeting. The meeting also endorsed that the reports be tabled for consideration by the 79th Session of the United Nations General Assembly later in September 2024.
The gathering was held to review the progress of the continental integration agenda and to assess the effectiveness of policy harmonization between the AU and the regional economic communities.
President Akufo-Addo, who also holds the position of AU Champion on African Union Financial Institutions, highlighted during the session that mobile money interoperability would not only further Africa’s integration goals but also enhance financial inclusion for its most disadvantaged populations.
He stressed the transformative impact of mobile money interoperability, particularly for small businesses and informal sector traders, who are the backbone of many African economies.
This initiative is expected to revolutionize business practices in Africa, create jobs for young people, and stimulate economic activity, as the continent already accounts for over 70% of global mobile money transactions.
“By leveraging mobile money technology, we can break down barriers to trade and boost and boost economic activities to empower millions of Africans in the continental and global economy.
“Our continent is home to a vibrant market of nearly 1.4 billion people, with majority being the youth; what they call Generation Z, with the Alpha Generation in tow…It is in our collective interest as today’s leaders to offer the youth of our continent the freedom to express their creativity economically and without border constrains and earn from their enterprise.
“Give the youth of Africa the freedom to aspire, and they shall be inspired to lead in creating the Africa we want, the Africa we desire, and the Africa they deserve.
“Let us leave Accra knowing we have committed our union, our Regional Communities, and our Member States to allowing our people the opportunity to buy and sell anywhere in Africa, using just their hand-held mobile device. Let us leave this room committing all our relevant institutions to fast-tracking the process.
“By championing interoperability, we are taking a decisive step towards realising the Africa that our freedom fighters dreamed of, which today is in our hands to bring about—a prosperous, integrated, and globally competitive continent,” President Akufo-Addo said, and urged his counterparts to demonstrate the will and commitment required to enable the ambitious agenda work for Africa.
The AU has called on member states, regional economic communities, and other stakeholders to commit to achieving mobile money interoperability by 2027.
This involves incorporating all member countries into the Pan-African Payment and Settlement System (PAPSS), enabling cross-border mobile money transactions, and establishing a continental regulatory framework for mobile money activities.
Africa’s mobile money transactions are valued at over $1.26 trillion, representing nearly 40 percent of the continent’s GDP.
Financial inclusion in West Africa has surged due to mobile money, reaching 71 percent and increasing.
East Africa boasts a 73 percent mobile money penetration rate, while Southern Africa stands at 45 percent and is on the rise.
The adoption of mobile money interoperability is a crucial step toward the African Union’s objective of creating a single, unified market for Africa.
It is expected to stimulate economic growth, reduce transaction costs, and enhance continental economic integration.
Mohammed Cheikh El Ghazouani, Chairperson of the African Union and President of Mauritania, stressed the importance of aligning national and regional policies to foster socioeconomic development on the continent.
The mobile money interoperability initiative is consistent with the AU’s aim of fostering economic stability and enhancing connections among member states.