Statistics from the Bank of Ghana show that the country’s mobile money ecosystem has expanded 186% between November 2022 and March 2024 when the e-levy was reduced from 1.5% to 1%.

In November 2021, Ghana’s government slammed an e-levy of 1.5% on mobile money and other electronic transactions within the country. The 1.5% levy affected all electronic transactions including mobile money, remittances, and other electronic transactions.

 

Ghana’s Controversial E-Levy Reportedly Causes Mobile Money Flight https://t.co/4pcf6rY3gw via @BitcoinKE

— RareBirdsHQ (@RareBirdsHQ_) December 4, 2021

The Central Bank’s Fintech Statistics, covering the period from January 2020 to March 2024, provide insights into the health of the fintech ecosystem by measuring the circulation rate of one Cedi on e-money platforms. This rate is calculated by dividing the total transaction value by the actual balance of float, indicating how frequently money circulates within the digital financial system.

The Balance of Float represents the total cash deposits from customers, agents, partner banks, and the service provider’s funds against which electronic money is issued. 

Notably, in 2021, before the introduction of the e-levy, the average circulation rate exceeded 20 times, suggesting a highly active and dynamic e-money environment.

However, the introduction of the 1.5% e-levy in early 2022 caused this rate to drop below 10 times monthly as Ghanaians employed strategies to avoid the levy, significantly reducing digital money transfers. This affected all types of transfers:

  • Wallet to wallet

  • Wallet to bank

  • Bank to wallet, and even

  • Bank to bank.

Consequently, according to local reports, the government raised only GHS93 million ($6.3 million) in the first two months, far below the GHS1.46 billion ($100 million ) target.

In response, the government reduced the e-levy to 1% in November 2022 which is said to have positively impacted the mobile money ecosystem. At that time, the mobile money float balance was GHS10.93 billion ($748 million), and the transaction value was GHS116.96 billion ($8 billion), resulting in each Cedi circulating 11 times that month.

By March 2024, the float balance had risen to GHS18.69 billion ($1.2 billion), with transaction values reaching GHS576 billion ($39 billion). This caused each Cedi to circulate 31 times, a 186% increase from November 2022.

By the end of March 2024, registered customer accounts stood at 67.3 million (up from 54.46 million in November 2022), and registered mobile money agents increased to 835,000 (up from 689,361 in November 2022).

 

 

 

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