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Value of MoMo transactions drop by GH¢3bn ahead of E-levy passage

Data published by the Bank of Ghana (BoG) has revealed that the value of mobile money transactions dropped by GH¢3.2 billion in December 2021, less the one month after Finance Minister Ken Ofori-Atta announced the planned introduction of an electronic transfer levy (E-Levy) in the 2022 budget.

The Business and Financial Times newspaper quoting from the Bank of Ghana report said, the value of transactions on the country’s largest payment platform dropped to GH¢82.9 billion in December from GH¢86.1 billion in November 2021. This represents a decline of 3.8%.

Compared to the period before the finance minister’s announcement of the introduction of the 1.75% E-levy, the value of mobile money transactions had just increased to GH¢80 billion in October from GH¢71.7 billion in September, an increase of more than 10% between the two months.

Besides, the volume of transactions also show that there is some apprehension on the part of customers in using the mobile money platform. While December recorded a 300,000 increase in the volume of transactions, September and October recorded a 700,000 increment.

This development, the Business & Financial Times says, indicates a change in consumer behaviour towards the use of the payment platform after the E-levy was announced.

It also sort of confirms fears by many, including mobile money agents, that passing the E-levy will discourage the use of the payment platform by many customers, which will in turn, end up collapsing their business, a concern several government officials have debunked.

Minister for Communications, Ursula Owusu-Ekuful, at a townhall meeting on the E-levy in Koforidua, Eastern Region, said in response to concerns by the mobile money operators that: “I can confidently say to the MoMO operators that we are working to grow your business and not destroy it”.

Ever since the finance minister announced the 1.75 percent E-levy, there have been several agitations coming from different segments of the society, including a brawl in Parliament between the minority and majority.

The agitations have revolved around the 1.75% rate considered too punitive by some. Other concerns are about its impact on financial inclusion, as the mobile money platform has successfully led to the inclusion of many, including illiterates and those in informal sector, in the financial system. While others are also upset about the fact that the new tax will increase their cost of doing business.

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