Government’s decision to abolish the Electronic Transfer Levy (E-Levy) and related transaction charges has been met with optimism from Ghana’s mobile money (MoMo) agents, who see it as a crucial step toward revitalizing their businesses and boosting digital financial transactions.
Since its introduction in 2022, the E-Levy has had a detrimental effect on Ghana’s mobile money ecosystem. According to the Mobile Money Agents Association of Ghana, an estimated 17,000 MoMo businesses collapsed due to the heavy transaction levies, which eroded working capital and discouraged digital transactions.
An internal survey by the association revealed that many agents abandoned their businesses due to multiple deductions on transactions, including intra-bank and inter-agent transfers. The financial strain led to a sharp decline in mobile money activities, affecting financial inclusion and cash flow for small businesses that rely on digital payments.
The MoMo Agents Association believes that scrapping the E-Levy will have far-reaching benefits for businesses, consumers, and Ghana’s digital economy:
Business Revival: The removal of transaction levies will encourage MoMo agents to reinvest in their businesses, increasing accessibility to financial services.
Increased Transactions: Lower transaction costs will incentivize more digital payments, reducing reliance on cash-based transactions.
Financial Inclusion: A more affordable mobile money ecosystem will improve access to financial services, especially for underserved communities and small businesses.
Economic Growth: With a revitalized digital payment sector, businesses will experience improved cash flow and financial efficiency.
Evans Otumfuo, the General Secretary of the association, explained in an interview with a local news network that heavy taxes dramatically reduced the working capital of many mobile money agents. Thus, they are pleased that the new government scrapped the levy, calling it counterproductive.
While the removal of E-Levy is a positive step, industry stakeholders urge the government to introduce policies that ensure long-term stability and growth in the fintech sector. These include:
Investment in Digital Infrastructure: Expanding broadband and mobile network coverage to enhance financial accessibility.
Regulatory Stability: Ensuring predictable policies that foster business confidence in the digital payments sector.
Tax Incentives for SMEs and Fintechs: Encouraging digital payment adoption through targeted tax reliefs.
The MoMo Agents Association remains hopeful that the removal of E-Levy will mark the beginning of a more inclusive and business-friendly digital economy. With increased mobile money transactions and renewed investor confidence, Ghana is poised to strengthen its position as a leader in Africa’s digital financial ecosystem.
