Mobile money and remittances will continue to dominate Africa’s economic development if they are supported with tools to boost data-driven transparency and compliance, according to a new whitepaper, released by Global Voice Group (GVG), a global provider of ICT and RegTech solutions for governments and regulatory bodies. Data from the World Bank shows that remittances accounted for at least ten percent of the Gross Domestic Product ( GDP) of emerging and developing countries in 2020. More data shows that as of 2022, international remittances sent to low and middle-income countries reached US$626 billion.
The whitepaper, titled : “Data-Driven Transparency and Compliance in the Digital Financial Ecosystem in Africa,” extensively examines the adoption of new technologies and the incorporation of global, regional and national policies with a particular emphasis on mobile money, financial inclusion, data governance, and their impact on African economies. Serving as a guide to RegTech solutions, it offers a roadmap for seamlessly integrating technologies into current compliance frameworks, providing valuable insights into the future of regulatory compliance in the digital age.
Digitization
Edouard Docteur, the chief delivery officer at GVG explains : “With the massive increase in digitization, African governments must ensure the implementation of effective monitoring solutions in the mobile money and remittance sectors. The whitepaper highlights how governments in Africa must invest in regulatory frameworks and leverage technology to ensure compliance, streamline taxation processes, protect end-users’ data, improve know-your-customer (KYC) procedures and mitigate risks associated with money laundering, financial terrorism and scams.”
The whitepaper highlights the impact of remittances and mobile money on local economies and provides insights into data acquisition to boost financial inclusion and governance. Emerging countries like Congo, Ghana and Rwanda adopt data-driven approaches to tackle fraud, money laundering and revenue leakages.
Data from the Central Bank of Kenya (CBK) shows that the value of mobile money transactions reached 56.8 percent of GDP by end of 2021, an increase from 48.7 percent in 2020 and was projected to surge to 68 percent by the end of the 2022/2023 fiscal year. Remittance inflows as of May 2023 totaled USD 352.1 million compared to USD 320.0 million in April 2023, an increase of 9.9 percent. The cumulative inflows for the twelve months to May 2023 totaled USD 3,997 million compared to USD 3,992 million in a similar period in 2022, an increase of 0.1 percent.
“By exploring this emerging trend, decision-makers, regulators and industry experts will gain a deeper understanding of the challenges and opportunities associated with harnessing data to drive positive change and foster economic growth,” noted Edouard Docteur, during the release of the whitepaper.
Innovation
The whitepaper also highlights that there are only eighty two data centres in Africa compared to thousands in Europe and the United States. This represents only one percent of the global data centre market, while the continent houses seventeen percent of the global population, with only thirty six out of fifty four African countries having put in place some data protection laws or regulations. The current data protection and sovereignty requirements would require increasing the current numbers of data centres to at least seven hundred across the continent. GVG drives innovation and shapes the future of tech-driven regulatory compliance, as a RegTech pioneer. Their whitepaper emphasizes knowledge sharing and collaboration across industries, governments, regulators and tech providers.
