More Hurdles for Mobile Money in Nigeria

As an African, I sometimes marvel at the dedication of Africans who shoot themselves in the foot. It is almost as if there are people, in positions of leadership, who compete to reach the lowest of lows.  This is why I roll my eyes when African leaders talk about Black Lives Matter. On 3rd September, we featured this continuing story about Zimbabwe where the central bank of Zimbabwe has imposed harsh controls that will deny mobile money services to large swathes of the population who are otherwise unbanked. One would imagine that the regulator in Zimbabwe should have more pressing matters.

Doing business in Africa is not easy. I should know. As a farmer (when I am not counting CDRs) I have seen the effect of high costs in everything (inputs, energy, financing costs, levies and taxes). I do not even want to go into lost business opportunities arising from red tape and corruption. It seems that is nothing compared to the lengths governments will go to frustrate entrepreneurial efforts. Even on services that are sorely needed by the populace, one can trust the government to wade in and make things more difficult. I agree with those who say that in Africa, businesses survive, not because of government efforts, but in spite of government.

Now we learn that Nigerian regulatory authorities plan to issue mobile money licenses but the payment service banks must have a minimum capital base of USD13mn. And furthermore:

The bank also requires that applicants set up separate companies that can guarantee the minimum capital requirement before telecommunications firms, banking agents, retail chains and postal services can apply for licences to become payment banks. Each new group must be run as an entity that is independent from the controlling company’s existing operations.

I am sure operators can afford the USD13mn. This amount is however symbolic of hurdles placed in the way of providers and one must also ask, when coupled with the other administrative headaches (couched as risk management), is this in any way seeking to promote the overall goals of the service?

More licenses are needed in Nigeria. It is a large, complex market, home to over 200 million Africans.

The central bank has granted three licences so far – to 9PSB, a unit of local telecom firm 9mobile, and two others. MTN, Nigeria’s biggest telecommunications firm, already offers a mobile money transfer service but has yet to receive approval

This is the time to simplify. However, for the authorities, it seems now, as always, is a good time to stifle a service that has brought lots of benefits to the man on the street.

Joseph Nderitu
Joseph Nderitu
Joseph Nderitu is a director at Integrated Risk Services Ltd and specializes in revenue assurance. He previously worked as Head of Revenue Assurance and Fraud Management at Vodacom's operation in Tanzania, having previously served in the same role at Vodacom Mozambique.

Before his work with Vodacom, Joseph was an internal audit manager for Airtel, with responsibility that covered their 17 countries in Africa. Whilst at Airtel, Joseph led reviews of the Revenue Assurance, Customer Service and Sales & Marketing functions.

Prior to his stint at Airtel, Joseph was an RA manager at Safaricom in Kenya. He holds an MSc Degree in Information Systems.