The total value of Mobile Money transactions has dropped significantly by some 6.7 billion cedis to 76.2 billion cedis between December and January 2022. can confirm after a careful analysis of the latest figures presented by the Bank of Ghana in its summary of Economic and Financial Data for 2021. This is the second time in a row the money payment system has witnessed a drop although the number of registered account holders increased marginally by 0.2%. In December last year, the payment platform recorded a 3.3-billion-cedi reduction despite a 1.25% increase in registered users.

In terms of transaction numbers, there was a 7.2% reduction, from 401 million transactions to 372 million transactions. If the latest trends are anything to go by, governments’ quest to rake in additional revenue from the sector in the form of taxes could be potentially battered. The Government of Ghana is seeking to raise 100.5 billion cedis in revenue but plans to spend 137.5 billion cedis in its proposed budget for 2022. Through the E-levy, including mobile money, the Finance Ministry is hoping to raise about 6.9 billion cedis to fund shortfalls in a budget that is completely swallowed by three line items, statutory payments, recurrent expenditure, and interest payments and amortization.

While the Bank of Ghana is yet to assign specific reasons for the huge drop in the total value of transactions – there is suspicion that it could be attributed to the government’s proposed e-Levy, to be imposed on mostly mobile money transactions. The government was proposing a 1.75 percent tax on transactions in addition to the 1 percent already being charged by the mobile companies, a service that has become an indispensable part of how people pay for goods and services using their phones. The tax measure which is soon to be tabled before Parliament aims at reducing the deficit from 9.7% of GDP last year to 7.4% in 2022. Critics say the move could potentially slow down financial inclusion, which the country aims to increase to 75% of all adults by 2023 from the current 58%. The government has since reduced the tax to 1.5 percent.

Meanwhile, the Bank of Ghana will today announce an increase in the policy rate: a direct response to the rising spate of inflation and introduce several measures aimed at addressing the free fall in the value of the cedi against its major trading currencies.