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Kenyans Beat Nigerians in Mobile Money Transfers

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Money Transfer - Investors King
  • Kenyans Beat Nigerians in Mobile Money Transfers

Kenyans moved a record $33 billion via mobile money platforms such as Safaricom, Airtel or Mobikash in 2016, up from $27.8 billion from the previous year, the latest data from Central Bank of Kenya has shown.

In contrast, Nigerians moved N756 billion or $2.4billion.

However, Nigeria surpassed Kenya using other electronic platforms.

Despite the economic downturn in Nigeria last year, over N56 trillion, about $177billion was moved through the electronic channels in the Nigerian financial system.

The surge in mobile money transactions in Kenya by about $6 billion consolidates the country’s global position in the use of the technology that has revolutionised its financial sector.

The volume of cash transacted on the platform surpasses Kenya’s 2017/2018 budget, which is estimated at 25 billion dollars, underlying the role of the service to citizens and the economy.

In 2016, mobile money use peaked at $3.1 billion per month in December, according to the regulator’s data, up from $2.6 billion last year.

Christmas and New Year festivities normally give mobile money use a boost as Kenyans send and receive various amounts of cash from their loved ones.

On the opposite, the least transactions during the period were carried out in January, with Kenyans moving $2.4 billion.

Kenyans on average transacted during the period $2.7 billion a month up from $2.3 billion in the previous year.

Kenyans use mobile platforms to perform a range of financial services that include making money deposits, remittance delivery, payment of bills, withdrawal of cash and access of micro-finance credit.

Therefore, mobile money has become a necessity in the lives of Kenyans. Many citizens are unable to operate without it.

In the period of review, according to the Central Bank, the number of mobile money subscribers hit 35 million from 31.6 million in 2015, which means only less than 10 percent of the country’s people has not subscribed to mobile money.

The number of agents during the period clocked 165,908 from 143,946 at the end of 2015 as the sector continued to be a key employer.

Monthly transactions similarly swelled considerably, with East African nation citizens making over
146 million transactions a month from 107 million in 2015.

Kenya has six mobile money service providers namely Safaricom, Airtel, Orange, Equitel, Tangaza and Mobikash.

Safaricom’s Mpesa is the most popular, carrying out over 90 percent of the transactions. The company last week partnered with its peers in Rwanda, Tanzania and Uganda to enhance use of Mpesa in East Africa, an indication of expected growth.

The apex bank’s figures paint a healthy picture of growth of mobile money but Treasury has warned that collapse of service poses fiscal risks to the economy since various financial products have been leveraged on the payment channel increasing linkage between the technology and the banking sector.

“If this system was to be compromised, the impact would be substantial considering the linkages and the corporate tax revenue for government. The financial and other institutions linked to this system would be susceptible,” notes Treasury in its budget policy statement for this financial year.

Analysts expect mobile money use to sustain growth in the coming years as companies continue to innovate, people go for paperless transactions and unsubscribed embrace the service.

In contrast to Kenya, mobile money is yet to catch on in Nigeria.

In 2016, N756 billion or $2.4billion was transacted through the channel. The number of mobile money customers in the country as at the end of last year stood at 5.54 million that are being cared for by 23,877 agents working for 21 Mobile Money Operators (MMO).

Likewise, goods and services worth N759 billion had been paid for using the 112,847 active POS terminals across the country. Payments through e-bills channel had the lowest volume of transactions of one million. Total value of transactions done through e-bills channel for the whole of 2016 stood at N339 billion.

Payments through webpay for 2016 stood at N132.36 billion which was done in 14.09 million transactions. NIBSS said in 2016, it has processed 11.7 million cheques with a value of N5.8 trillion. Corporate cheques accounted for the largest chunk of this figure as 5.9 million Corporate cheques valued at N3.7 trillion had been processed during the year while 2.7 million individual cheques valued at N0.94 trillion was processed.

Nigeria however scored higher in other electronic platforms.

Despite the economic downturn in the country last year, over N56 trillion, about $177billion was moved through the electronic channels in the Nigerian financial system.

This is asides the cash transactions done over the counter in the banking halls.

Total transactions through electronic payment platforms such as Automated Teller Machines (ATMs), Point of Sale Terminals (PoS), web payments, online transfers and mobile money from January to December last year hit N56.886 trillion.

According to the Nigeria Inter Bank Settlement System (NIBSS) which records and settles all electronic transactions in the country, online payments through the NIBSS Instant Payment (NIP) recorded the highest value, accounting for 67 per cent of total value of transactions while ATMs had the largest volume of transactions.

The value of funds that changed hands through NIP stood at N38 trillion which was done in 154.5 million transactions. On a daily basis, an average of 422,142 transactions had been done through the NIP channel as more Nigerians adopt the cashless policy of the Central Bank of Nigeria.

Total bank accounts held in the country by banks at the end of 2016 rose to 96.22 million from 85.02 million in 2015, while active accounts rose from 58.97 million to 65.48 million by the end of last year.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Starlink Pulls Plug on Ghana, South Africa, and Others

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Starlink, the satellite internet service operated by SpaceX, has announced the cessation of services in countries including Ghana and South Africa.

This decision comes as a significant blow to users who have come to rely on Starlink for their internet connectivity needs.

The decision, set to take effect by the end of April 2024, will disconnect all individuals and businesses in unauthorized locations across Africa, including Ghana, South Africa, Botswana, and Zimbabwe.

While subscribers in authorized countries such as Nigeria, Mozambique, Mauritius, and others can continue to use their kits without interruption, those in affected regions face imminent loss of access.

One of the reasons cited by Starlink for the discontinuation is the violation of its terms and conditions.

The company explained that its regional and global roaming plans were intended for temporary use by travelers and those in transit, not for permanent use in unauthorized areas. Users found in breach of these conditions face the termination of their service.

Furthermore, Starlink’s recent email to subscribers outlined stringent measures to enforce compliance.

Subscribers who use the roaming plan for more than two months outside authorized locations must either return home or update their account country to the current one. Failure to do so will result in limited service access.

The decision to discontinue services in certain countries raises questions about the future of internet connectivity in these regions.

Also, concerns have been raised about Starlink’s ability to enforce the new rules effectively. Reports indicate that the company has previously failed to enforce similar conditions for over a year, raising doubts about the efficacy of the current measures.

Starlink’s decision to pull the plug on Ghana, South Africa, and other nations underscores the complexities of providing satellite internet services in diverse regulatory environments.

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Nigeria’s Broadband Penetration Stalls at 42.53% Amid Connectivity Challenges

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Nigeria’s broadband penetration has stalled at 42.53% as of January, according to the latest report.

Subscriptions currently stand at 92.19 million, indicating a significant gap in connectivity, particularly in rural areas.

The Nigerian National Broadband Plan 2020-2025 aims to increase broadband penetration to 70% by 2025, with the ultimate goal of achieving 96% mobile broadband coverage by 2030.

However, this ambitious target requires substantial investment—approximately $461 million, according to a recent report by the Global System for Mobile Communications Association (GSMA).

While the country’s major telecommunications companies, such as MTN Nigeria and Airtel Africa, have invested heavily in expanding their network infrastructure, much of this development has been concentrated in urban areas. Rural and underserved regions face a significant coverage gap, exacerbating the digital divide.

Despite these challenges, Nigeria has made progress in improving its broadband infrastructure. Since 2012, the mobile broadband coverage gap across Africa has decreased from 56% to 13% in 2022, due to significant investments in network capacity and new technologies.

Nonetheless, millions of Nigerians, particularly those in rural regions, remain without access to essential telecom services.

To address this issue, Nigeria’s government established the Universal Service Provision Fund (USPF) in 2006, aimed at bridging the connectivity gap and expanding broadband access to unserved and underserved areas.

The fund provides resources for deploying telecommunications infrastructure in economically unviable regions.

The success of these initiatives, along with increased investments in broadband infrastructure and policies to incentivize internet expansion in remote areas, will be crucial in closing the connectivity gap and improving digital access for all Nigerians.

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iPhone Shipments Drop Amid Resurgence of Android Rivals

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Apple iPhone 14

Apple Inc. reported a significant drop in iPhone shipments during the March quarter, reflecting a downturn in sales across China amid the resurgence of competition from Android-powered rivals.

According to market tracker IDC, the tech giant shipped 50.1 million iPhones in the first three months of the year, a 9.6% year-on-year decline that fell short of the average analyst estimate of 51.7 million.

The steep decrease in iPhone sales marks Apple’s most significant quarterly dip since 2022, when Covid-19 lockdowns disrupted supply chains.

This time, the Cupertino-based company faces challenges from resurgent competitors such as Huawei Technologies Co. and Xiaomi Corp.

These firms have rebounded strongly in recent quarters, and their innovative product lines have begun to reclaim market share from Apple in China.

Samsung Electronics Co. regained its position as the top smartphone supplier globally, while Apple ranked second. Xiaomi closed the gap on Apple, shipping 40.8 million units, an impressive 33.8% increase year-on-year.

Transsion Holdings, another key player in the budget smartphone segment, nearly doubled its shipments, showcasing the competitive environment Apple faces.

Nabila Popal, research director at IDC, highlighted the broader shift in the smartphone market, which has recovered from the supply chain disruptions and challenges of recent years.

“While Apple has demonstrated resilience and growth in recent years, maintaining its pace and share in the market may prove challenging as Android manufacturers make strides,” Popal commented.

Apple has a strong brand and loyal customer base, yet its market position may be tested further by the aggressive pricing and innovative products offered by Chinese rivals.

The company’s efforts to sustain its premium pricing strategy may also be challenged as more customers consider switching to Android alternatives.

As the tech industry looks ahead to the rest of the year, Apple’s upcoming earnings report and strategic moves to address this competitive pressure will be closely watched by investors and industry observers alike.

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