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Updated Mar 27, 2020

The World Health Organization has flagged paper money and coins as potential transmission vectors for the COVID-19 virus, spurring African countries and financial tech startups to switch more transactions to mobile money. Kenya, Africa’s fastest adopter of digital payment options, has begun to promote mobile money as a public health initiative. Thirty-two million Kenyans, roughly 60 percent of the population, have access to mobile-money functions. In collaboration with government, Kenya’s largest telecommunications company, Safaricom, issued a fee waiver for transactions under US$10 for the country’s largest mobile-money app M-Pesa, effective over the next three months, to discourage the use of physical currency. Ghana has implemented similar measures.

In South Africa, where about 40 percent of the continent’s known COVID-19 cases have been confirmed, the government has not passed new directives to encourage the use of mobile money, but local financial tech companies have taken up the initiative. In Nigeria, parts of Lagos now require digital transactions to mitigate the spread of COVID-19.


Why It Matters

These measures are likely to accelerate what has already been a rapid adoption of mobile money services and financial tech products in sub-Saharan Africa. As mobile phone usage becomes more ubiquitous across the continent, reliance on financial service applications is likely to increase as well, meaning telecommunications infrastructure will have to be improved. Amid this quick adoption, it will be necessary for African governments to address gaps between those who can afford mobile phones and Internet services, and those who cannot. Sub-Saharan Africa has some of the highest data rates in the world, a major obstacle to the use of such technology. Banks will also need to adapt to this shift away from using cash.

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