Vice President Dr. Mahamudu Bawumia has urged a redirection of focus from having a common currency in Africa to systems that will scale up mobile money interoperability.
This, he believes, will provide critical solutions to the challenges of having a common currency in the sub-region and on the continent.
Speaking at the “Continental Mobile Interoperability Symposium” in Accra on Friday, organised by the Africa Posperity Network (APN), Dr. Bawumia asserted that the idea of a common currency since 1963 has been replaced by digital currency payments, making mobile money a viable alternative for interoperable transactions.
“The idea of a common currency, which came in 1963, has really been overtaken by the digital currency payments age; today, you can think of mobile money as a common currency if we make it interoperable.”
“We don’t need to have that common currency before we get the benefits of a common currency that we have been talking about since 1963,” he said.
“Making mobile money interoperable allows our citizens across the country to trade seamlessly, and so this is where I believe, as African countries, we should focus,” he continued.
Dr. Bawumia attributed the challenges of having a common currency over several decades to the inability of individual countries in Africa to achieve the so-called macroeconomic convergence criteria at different points in time, which include inflation and interest rates, among others.
“One of the major problems of having a common currency, even if you look at our West African Monetary Zone, was the difficulty of our respective countries attaining the macroeconomic convergence criteria. That was the major problem since 1998 and 1999, when the West African Monetary Zone project began,” he said, adding that African countries should move from “macroeconomic convergence criteria to digital payments convergence criteria.”
The vice president said achieving mobile money interoperability is central to increasing access to banking services and reducing informality in trading, which is prevalent in most African economies.
“Mobile money interoperability is very important on the continent because, within each country, it addresses the fundamental issue of financial inclusion.”
“For many years since independence, many African countries have struggled with banking the unbanked. You tend to have 30 to 40% of our population that was traditionally banked, with a large proportion of the population unbanked,” he said.
He highlighted the efforts by Ghana in achieving mobile money interoperability in 2018, resulting in the country becoming the fastest-growing mobile money market in Africa and the number one in Africa in terms of access to financial inclusion.”
On the adoption of mobile money interoperability, Dr. Bawumia proposed an incremental rollout and adoption in contrast to waiting for all countries to accept it.
“We should not wait for everybody to proceed with mobile money interoperability at the continental level. That will be a mistake. It has to be done incrementally,” he advised.
He also enlisted the cooperation of central banks, telcos, and policymakers to make mobile money interoperability on the continent a reality.
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