Mobile Money in a Cashless Economy in Ghana

-Challenges and Possibilities

By Kwesi Atta Sakyi

17th August 2014

The explosive growth in the use of mobile phones in Africa has brought with it a lot of business opportunities, not least the phenomenon of mobile money transfers whereby users of mobile phones can use their cell phones or handsets to transact a lot of business such as paying for utilities through direct debit or DDAC, checking their bank balances online, instructing their banks to deal in monetary and capital assets, transferring money to relatives and creditors, among others. No more do people have to get stuck in traffic jams or queues in alleys, highways, and offices in Accra to go and pay their water, electricity, school and other bills and fees as they can transact such businesses from the comfort of their homes or offices.

Thanks to electronic cash and the use of Visa cards, Master cards, Thomas Cooke, and others which combine well with the use of cell phones. Welcome plastic money!

In Kenya, Airtel money comes in the form of MPESA, and Kenyans have become innovative whereby transport fares for the Matatus, Molues, Tro-tros and taxis (public transport) are paid for by those who have pre-loaded mobile money unto their SIM cards. The phenomenon is also catching on fast in Nigeria, and hopefully in Ghana. It is a question to do with the rate of diffusion of innovation and degree of adventure-taking or risk taking of the people. Is mobile money going to overtake normal banking transactions? No, and yes. Mobile money is flexibly mobile and accessible while banking accessories are stationary and bureaucratic.

We are practically moving away from a cash economy to a cashless electronic money system, leading to a lot of disintermediation and averting the security risk of moving around with lots of cash. The work of banks and money transfer providers such as MoneyGram, Western Union, and PayPal is facing fierce competition from Airtel, MTN, Vodacom, Vodafone, among other telecom service providers. In Kenya, many farmers and out-growers can receive technical advice, backup, marketing tips, and payments for their produce no matter how remote they are, provided they are on the mobile phone network. Of course, with 419 frauds being rampant, many people want to play it safe by following traditional methods of doing business as usual, hence their risk-taking appetite being low for mobile money and mobile banking. Fancy being stuck in your car in the midst of nowhere, and your car tyre is burst or you have no fuel. The only source of help is through your cell phone and the use of your credit card.

Farmers and fishermen in rural areas can now transact business with those in urban areas through cell phone connectivity, thus bridging the rural-urban divide. This development should augur well for the future and stem the tide, and reverse the unhealthy trend of the rural-urban migration syndrome. Many banks do not want to be attenuated from the rapid development in the ICT sector, and as such, they are collaborating and complementing the efforts of the telecom providers to bring banking nearest to the doorsteps of the majority unbanked communities. In this way, a whole gamut of the unbanked population can be mobilised for savings and investment for rapid growth of our GDP. Every handset holder is a potential candidate for savings or a candidate to receive government grants, bank loans, and Constituency Development Funds (CDF).

The Ghanaian Government should seek collaboration with the telecom providers to provide a national database for identifying the vulnerable people so that they can be supported by social welfare payments as poverty-reduction intervention, which can help to achieve some of the goals of the MDG (Millennium Development Goals) of the UN which was launched in 2000 and ending in 2015. Cell phone owners who are registered can provide a national database for the National Registration Cards programme, which programme has been treated by the government without any sense of urgency.

Furthermore, the unemployed youth can be identified from the telecom database to be targeted for the Youth Empowerment Scheme (YES) which some sceptics have pooh-poohed as another GYEEDA (Ghana Youth Economic Empowerment Development Agency). Well, we are yet to know as it is early days now. The cell phone owners’ database can be used in many novel ways for research, market segmentation, targeting, planning, data-mining, data drilling, and data warehousing. Of course, it can also be used for national security concerns, such as warding off activities of economic saboteurs and those engaged in nefarious activities such as money laundering, narcotics, terrorism, paedophilia, Small Arms Trafficking (SAT), Human Trafficking, among others.

Where traditional banks are squeamish, bureaucratic and conservative in opening accounts for some people, these could be circumvented by the telecom providers who are ubiquitous in the country, and they have a wider reach at minimum cost than the commercial banks. We can engage in faceless banking if the necessary security protocols are enhanced by technology such as voice recognition ID, user ID on phones, among other security features. Cell phone users can engage in the use of mobile money for petty transactions and at the same time, engage in major transactions through mobile banking or online banking, using their hand-held sets, in a win-win manner. In this scenario, the whole mobile handset holders become a body cooperative which can be segmented for SME projects.

The vast opportunities opened up by mobile money and mobile banking are endless, especially with the introduction of more advanced cell phones such as Apple’s iPod, Samsung’s Galaxies, Blackberries, and Android, among other smart phones. There are infinite business possibilities and permutations which can open up in the sinking Ghanaian economy, Senchi or no Senchi Accord, with the introduction of these gadgets. However, some sceptics are whimsical about security concerns. The Akans, in a proverb, say that if you fear the eye of the fish, then do not eat the head. Those technophobes had better think twice because sustainability in this 21st century is hinged heavily on being a technophile and a technology lover.

Those who fear to engage in internet or online business, using their phones and computers, may soon learn to their chagrin and consternation that they have become irrelevant in a fast-changing technophile world, thus they need to switch from being technophobes to being Nerds, Geeks and technophiles to survive in this 21st century world. Our educational policy makers ought to move fast in Ghana or else we face a strategic drift from the rest of the world, and we will become like the analogical changeless Greek Temple or Boiled Frog phenomena.

Let us put our money where our mouth is by providing ICT facilities in all our schools because very soon, without advanced qualifications in ICT such as Computer Driving Licence (CDL), you cannot be employed by a multinational or an international organisation, or you cannot be accepted in an educational institution abroad.

ICT literacy in Ghana is too low from my own experience and observation. Rwanda is one African country breaking new grounds in ICT and they are using ICT as the cornerstone to drive their economy. A silent and progressive tsunami-like revolution is taking place in that country, and very soon, it will become the cynosure of all eyes in Africa. Ghana is capable of emulating this paradigm through adoption of STEMIC education or Mathematics, Technology, Science, and ICT-based educational system, found in places like Canada, Australia, Scotland, USA, Japan, South Korea, and in fact in all progressive countries in the world. Israel, Switzerland, UK and others have moved away from hard polluting industries and they have concentrated on soft industries in the knowledge sector in order to have clean environments and also not depend too much on natural resources-based industries. Ghana should also concentrate on the service industries in the tertiary and quaternary sectors.

In the last couple of months, I have attended two international conferences for ACCA and CIMA in Zambia at which it was made known that from January 2015, most of ACCA and CIMA exams are going to be Computer-Based Assessments (CBAs). How ready are we in Ghana for such seismic, tectonic, and paradigmatic transformations? I bet you, fewer students are going to pass these exams not for want of knowledge but for being computer-illiterate, or some are going to shy away from these professional bodies and switch to other avenues where they may still have the option of paper-based exams.

But for how long, as global warming and climate change stare us ominously in the face, what with the rapid depletion of scarce global natural resources? The powers-that-be may stop producing paper to force everyone to go electronic, and to embrace the principles of recycling, reducing, reusing and going for alternative energy-saving sources, as well as going green, reducing our carbon footprint, embracing Elkingham’s Triple bottom-line of concern for the planet, people and profit. We may have to revisit Carroll’s Pyramid model of CSR (Corporate Social Responsibility) concerning being philanthropic, ethical, economic, ecological, legal, and socially sensitive (PEEELS).

Let us be proactive and move fast. My daughter recently wrote her BECE exam and I did not appreciate very much her Basic Technology text book which has material which is about 30 years obsolete. How often are our school textbooks updated? Do we have enough computer laboratories in our schools throughout Ghana to be examining children in this subject? What about the teachers? Are they doing hands-on teaching or theoretical teaching? How often do ICT teachers retrain or go for refresher courses?

What happened to the many promises made by successive governments in Ghana to provide one laptop to each pupil, or the plan made by the UN to the same effect of sourcing for cheaper assembled mini-laptops from India, in collaboration with Microsoft Inc.? Can our own indigenous company, rlg Ltd, headed by Agambila, step in to fill the vacuum? If knowledge uptake in ICT in schools in Ghana is neglected, we are doomed because we will be left behind other countries, and we shall have no competitive edge as a nation. Our consumers will be ignorant, our youth will be unemployable, and our output will be low.

We call upon our mobile service providers to roll out more innovative products which will provide interventions to solve many of our national problems such as the hassles connected with accessing loans, transferring money within and abroad, among others. Western Union and MTN are already in a beautiful synergistic and symbiotic relationship for our good as customers, and other competitors should take note and emulate them. Of course, some of these service providers such as Airtel have become complacent and are fleecing consumers and providing very shoddy services indeed. They must be brought to book by a powerful lobby of Consumer Protection Associations in all the countries where they operate in Africa. Governments should also crack the whip to ensure that they observe some semblance and modicum of service quality level contracts.

Email: kwesiattasakyi449@gmail.com