Seventy per cent of Somalia’s people use mobile money services regularly, a new World Bank report suggests.
The country records approximately 155 million transactions every month, which translates to 36 per cent of gross domestic product (GDP).
According to the report, titled “Rapid Growth in Mobile Money: Stability or Vulnerability?” the Horn of Africa nation has one of the most active mobile money markets in the world.
Despite this growth, the report noted that mobile money consumers in Somalia lack protection and the guarantee that their e-money can be redeemed for cash.
“We will continue to support the partnership between the Central Bank of Somalia, the National Communications Authority and the key private sector actors as they deliberate on an appropriate regulatory framework for the sector,” said Tim Kelly, Lead ICT policy specialist at the World Bank.
The authors of the report called on Somalia’s government to introduce mobile money regulations to “a market that has operated without regulatory oversight”.
Meanwhile, the World Bank says it projects Somalia’s economy to grow at an annual rate of 3-4 per cent despite it being vulnerable to recurrent shocks.
Between 2013 and 2017, Somalia’s GDP growth averaged 2.5 per cent but that has not been sufficient to translate into poverty reduction in the country, it adds.
Somalia plunged in turmoil in 1991 following the overthrow of a long-ruling military regime by clan militias, battering the economy and leading to famines and security nightmares.