The untold global e-wallet input from Tanzania

Tanzania has steered the global financial inclusion revolution and has one of the most developed mobile money markets in the world, says GSMA.

The untold global e-wallet input from Tanzania

Tanzania has steered the global financial inclusion revolution and has one of the most developed mobile money markets in the world, says GSMA.

08 mart 2018 Thursday 12:17
The untold global e-wallet input from Tanzania

By Felix Kaiza 

As global tourism and travel industry players converge at the imposing Germany Messe Berlin for the world’s biggest five-day expo trading as ITB --for Internationalle Tourismus Borse-- one noteworthy positive contribution to this year’s annual hospitality event is likely to escape international attention.

Participants from different parts of the globe may have found financial transactions for services and products related to this year’s ITB more speedy and comfortable and yet still fail to appreciate exactly why.

This time around, one could have, from anywhere on the African continent (and in fact beyond), planned a trip to Berlin without having to physically call at any bank or visit an office of a travel agent.  A swipe across ones Smartphone screen to access ones digital money account could have been just enough to complete all the required transactions in almost record time and go unnoticed.

This is why, even if anybody were to turn up at the Tanzania Pavilion in the East Africa section of the  Messe Berlin Africa Hall  with stories about the Bank of Tanzania (BoT) being behind the current ease with which global e-wallets operate, chances of that person being treated with utmost disbelief remain high.

What does the even non-participant BoT have on offer from its humble Mirambo Street Conference Centre location in Dar es Salaam to the global destination Messe Berlin, thousands of kilometres away from Tanzania?

Follow this trek.

Briefly, financial inclusion, which embodies e-wallets, is all about individuals and businesses accessing useful and affordable financial products and services that meet their needs. Its delivery, however, must be in a strategically responsible and sustainable manner. 

It became a major challenge around the world in 2007, putting policymakers on the alert and leading them to establish the Alliance for Financial Inclusion (AFI) in the following year as a global network of central banks, supervisors and financial authorities. 

Tanzania President Dr John Magufuli in a group photo with Former BoT Governor Prof. Benno Ndulu (Right) and  new Governor, Prof. Florens Luoga (Left).

These policymakers, with Prof. Benno Ndulu, who had then assumed the BoT Governorship playing the key role of the AFI Board of Directors Chair, committed themselves to put in place financial inclusion policy that creates an enabling environment for cost-effective access to financial services, which makes full use of appropriate innovative technology and sustainably lowers the unit cost of financial services.

 At the 2011 AFI Global Policy Forum in Mexico, BoT assumed the role of a leader in making tangible commitments to financial inclusion along the lines of the Maya Declaration. It put up a co-ordination structure to oversee and supervise the implementation process, bringing the Financial Inclusion National Council on stage.

In collaboration with other stakeholders --the Financial Sector Deepening Trust (TSDT) in particular-- BoT identified barriers to financial inclusion. It hosted international forums leading to the establishment (in 2013 and for that matter in historic Zanzibar) of the Africa Mobile Phone Financial Service Policy Initiative (AMPI). This has been instrumental as a platform for sharing experience on how countries in Africa (and beyond) may scale up the use of mobile money for financial inclusion.

On the AMPI heels came the BoT engineered National Financial Inclusion Framework (NFIF) 2014/2017, setting accessibility and other related targets. Through the BoT leadership, Tanzania became the first country in the world to have implemented full interoperability of mobile phone services, using standard industry practices.

 Of late, the second round national framework has been launched to run over five years targeting productive usage of digital financial services and products for development, now operating under the new Governor, Prof. Florens Luoga.

Four days to the onset of this year’s ITB, the real story of the BoT contribution to the global e-wallets revolution was being told in full during the Mobile World Congress in the Spanish City of Barcelona.

A representative of worldwide interests of mobile operators, GSMA, reported that in 2017, the industry processed transactions worth a billion dollars a day generating over US$2.4 billion.

GSMA described Tanzania as one of the most developed mobile money markets in the world representing almost a third of all of East Africa’s active mobile money accounts in 2015.  Tanzania was also described as one of the most progressive, with ambitious initiatives leading to new products and services.

In the February 2018 Monetary Statement, the BoT reveals that the interoperability arrangement has contributed a lot to increase the volume of transactions among network operators at the same time reducing the cost of mobile financial services. It puts the year-on-year rise in the number of transactions during the first half of the 2017/18 fiscal year at 123.8% and the value at 92.7 per cent.

In sub-Saharan Africa, while Tanzania took the lead in steering the global financial inclusion revolution, Ghana was set to take the second seat as Kenya, a fellow member state in the East African Community (EAC) bloc, was in the process of launching a pilot scheme.

Beyond what transpired in Barcelona, Nadi of Fiji has an additional story to tell from the 8th Alliance for Financial Inclusion Global Policy Forum hosted by the Reserve Bank of Fiji in September 2016.

Reading between the lines on the level of BoT’s role, the Chairman of the AFI Board of Directors, Prof. Benno Ndulu, in his key address, was quoted as congratulating the management team, funding partners like the Bill and Melinda Gates Foundation, the German Ministry of Finance (BMZ), the Omidyar Network and the Government of Canada through its International Development Research Center (IDRC).

This was on top of “partners from the private sector, including MasterCard foundation, Visa, Lesthego, and GSMA, who have been participating in the Public Private Dialogue platform to leverage knowledge sharing on innovative solutions for financial inclusion.” 

The Nadi Forum was held to deliberate the building of pillars of sustainable financial inclusion through implementing smart policies that address the challenges of ensuring a balance of access, usage and quality with the purpose of making a difference in the lives of the world’s 2 billion unbanked.

A decade under the BoT chairmanship, AFI has developed into an independent organization set to implement the Addis Ababa Action mandate to spur financial inclusion globally. The institution is fully set to create a more inclusive and prosperous world because of being well aligned for the attainment of sixteen out of the seventeen United Nations sustainable Development Goals (SDGs).

Prime Minister Kassim Majaliwa summarized it better during the launch of the second round national financial inclusion framework when he said:  “Over this period, Tanzania, through the BoT Governor … has been chair to the Alliance for Financial Inclusion.

Tanzania Prime Minister Kassim Majaliwa 

Central bank experts have also led various AFI Working Groups. This has accorded great honour to our country… constituting big successes worth being proud of.”

Azania Post

Updated: 08.03.2018 13:02
Keywords:
Tanzania
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