MoMo Loses GH¢10 Billion In Value As E-Levy Implementation Date Approaches
Even before the Electronic Transaction Levy (E-levy) goes into effect next month, data shows that the mobile money platform lost over GH¢10 billion in value between November 2021 and January 2022, raising severe doubts about the new tax’s potential to generate the expected income.
According to the Bank of Ghana’s Summary of Economic and Financial Data (March 2022), the mobile money platform, which is the country’s largest payment system network and is seen as the main driver of financial inclusion, saw its transaction value drop to GH¢76.2 billion in January 2021 from GH¢86.1 billion in November 2021 (the month the E-levy was announced), a drop of GH¢9.9 billion.
Since its inception, the platform has never seen such a massive drop in value in the space of two months inside a year.
Aside from the decrease in platform value, the total number of transactions decreased by 24 million in January 2022 compared to November 2021.
During the same time period, the number of active agents declined by 7,000, while the number of active mobile money accounts decreased by 600,000.
All of these drops since November 2021, when Finance Minister Ken Ofori-Atta announced the E-levy, led to one conclusion: users of the mobile money platform are not ready to pay the planned tax and may have reverted to cash choices.
Meanwhile, that is the platform from which the government intends to collect a portion of the E-levy.
“Chances are high that the revenue target from the mobile money will not be achieved. From what is going on, by the time they are ready to implement the taxation, most people who can do without the mobile money will hive off. The net effect on small businesses will be huge, and so we are going to find a lot of them doing cash transactions now. People will walk into the banking hall, cash their money or use the ATM and pay over the counter,” Senior lecturer at the University of Ghana Business School Dr. Vera Fiador
