AU Adopts President Akufo-Addo’s Landmark Mobile Money Interoperability Proposal to Boost Economic Integration Across Africa
The African Union (AU) has adopted President Nana Addo Dankwa Akufo-Addo’s proposal for mobile money interoperability. The declaration was made on 21st July 2024 during the Sixth Mid-Year Coordination Meeting held in Accra, chaired by H.E. Mohamed Cheikh El Ghazouani, President of the Islamic Republic of Mauritania and Chairperson of the African Union. The mobile money service could serve as a common currency for Africa and promote intra-African trade and economic cooperation. By enabling seamless mobile money transactions across national borders, the initiative is expected to enhance economic activities, reduce transaction costs, and increase financial inclusion for millions of Africans.
The declaration, signed by Heads of State and Government representing the AU Bureau and the Chairpersons of the eight Regional Economic Communities (RECs), recognizes the vital role of mobile money interoperability in fostering economic growth and integration. The meeting in Accra saw extensive discussions on the current state of continental integration, with leaders highlighting the importance of harmonizing national and regional policies to promote socio-economic development. President Akufo-Addo, serving as the AU Champion on AU Financial Institutions, presented two critical reports: the establishment of the African Union Financial Institutions (AUFIs) and the proposal for scaling up interoperability for economic integration through mobile money.
The adoption of this proposal is poised to have a profound impact on remittance businesses across the continent. Interoperability is expected to lower the cost of sending and receiving money across borders, making it more affordable for individuals to support their families and businesses. The ease of transferring money via mobile platforms will increase competition among remittance service providers, driving down prices and improving service quality. This initiative will allow remittance businesses to tap into a broader market, serving customers across multiple countries without needing separate operations in each one.
Additionally, mobile money interoperability will enhance financial inclusion by providing greater access to financial services, especially for the unbanked populations in rural areas. Interoperable systems will enable faster transactions, which is particularly beneficial in emergencies requiring quick access to funds. The move is also expected to spur innovation within the remittance industry, leading to new products and services tailored to a more connected and financially inclusive market, such as microloans and insurance products.
However, the transition to interoperability will also present regulatory challenges, requiring remittance businesses to navigate different countries’ financial regulations and anti-money laundering laws. The increased transparency of interoperable systems can help monitor and reduce illicit financial flows, contributing to greater economic stability.
The mobile money initiative aligns with the objectives of the African Continental Free Trade Area (AfCFTA), aiming to simplify cross-border transactions and support small and medium-sized enterprises (SMEs). The declaration also called for the AU Commission, RECs, and Regional Mechanisms (RMs) to strengthen their collaboration in implementing the African Integration Agenda. A new African Synthesized Regional Integration Index (ASRII) will be developed to monitor and report on the progress of regional integration, starting in 2025.
