Kenya’s mobile-money growth hits 16-year low following government tax move

In 2023, value of transactions in the country increased to 7.95 trillion shillings ($49 billion), compared to 7.91 trillion shillings the previous year, as per the data from the Central Bank of Kenya.

The number of mobile wallets also saw a 6% rise, reaching 77.3 million by the end of 2023.

The 0.5% growth in the value of transactions in 2023 represents the slowest pace since the introduction of the service in March 2007. This deceleration is a result of the increase in excise duty on transaction fees, which rose to 15% last year from the previous 12%, as reported by the Kenya Revenue Authority.

The central bank captures data from mobile-money agents, and not from alternative channels such as phone-based apps that have grown exponentially, according to Silha Rasugu, an analyst at EFG Hermes. Challenging economic conditions have also impacted disposable incomes, contributing to the slower growth in mobile money transactions, he said.

“Those transactions reflect the consumer wallet as well,” Rasugu said. “It could be a signal of consumers under pressure.”

GSMA credits the performance to freshly liberalised markets, Ethiopia and Nigeria, driven by regulatory reforms and rising demand for digital payments.

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