Vice President of the Republic of Ghana, Dr. Alhaji Mahamudu Bawumia, has stressed that Africa does not require a common currency to facilitate intercontinental trade due to the advancements in digital payments.
In his address at the opening ceremony of the Continental Mobile Money Interoperability Symposium organized by the Africa Prosperity Network at the Labadi Beach Hotel on Friday, July 5, Dr. Bawumia highlighted the transformative impact of mobile money and mobile money interoperability on financial inclusion across the continent.
“For many, many years since independence, many African countries have struggled with the issue of banking the unbanked,” he noted.
Historically, only 30 to 40% of the population had access to banking services, leaving a large segment unbanked.
The introduction of mobile money has significantly increased financial inclusion.
Dr. Bawumia pointed to Ghana as a leading example, particularly after the country introduced mobile money interoperability in 2018.
“Ghana’s mobile money interoperability was unique because it facilitated interoperability not only among telecom operators but also between telecom operators and banks,” he explained.
This innovation has propelled Ghana to the forefront, boasting the fastest-growing mobile money market in Africa and the highest level of financial inclusion on the continent.
Dr. Bawumia stressed that the success of Ghana’s mobile money interoperability model can be replicated across Africa.
He argued that by scaling up mobile money interoperability continent-wide, African nations could reap the benefits of a common currency without actually needing one.
“The idea of a common currency, which came in 1963, has really been overtaken by the digital payments age,” he said.
“Today, you can think about mobile money as a common currency if we make it interoperable.”
He further elaborated on the challenges that have historically hindered the achievement of a common currency, particularly within the West Africa Monetary Zone.
Despite efforts since 1998, countries have struggled to consistently meet key macroeconomic convergence criteria such as inflation, deficits, reserves, and exchange rate stability.
“It has been a constantly moving target,” Dr. Bawumia noted.
Given these challenges, he proposed a shift in focus from macroeconomic convergence criteria to digital payments convergence criteria.
“If we are serious about it, we can work towards mobile money interoperability at the continental stage,” he asserted.
This would involve establishing necessary convergence criteria to enable countries to achieve mobile money interoperability, a goal he believes is within reach.
Dr. Bawumia’s speech underscored the potential of digital payments to revolutionize trade and financial inclusion in Africa, advocating for a pragmatic approach to achieving economic integration through technology rather than traditional monetary frameworks.
