Chart of the week #13: Mobile money transactions in Tanzania are worth how much?

Mobile money has revolutionised financial services in East Africa, starting with M-Pesa in Kenya and spreading from there. The global association of mobile phone network operators, GSMA, has recently published a report on mobile money in Tanzania (pdf), which included the following chart, showing the total value of mobile money transactions each year since 2007:

Yearly value of mobile money transactions. Source: GSMA, data from Bank of Tanzania, Central Bank of Kenya

Yearly value of mobile money transactions. Source: GSMA, data from Bank of Tanzania, Central Bank of Kenya

Two things are worth highlighting here. First, though Kenya was undoubtedly the trendsetter here, Tanzania is fast catching up, and looks set to overtake Kenya during 2014.

Second, take another look at the Y-axis label on the left. These figures are in billion US$. In other words, the total value of mobile money transactions in Tanzania in 2013 was US$17.7 billion. This is a huge amount – equivalent to over half (54%) of Tanzania’s GDP*.

Which means in one sense Tanzania has already overtaken Kenya, where the value of mobile money transactions in 2013 was “only” 49% of GDP*:

That makes me wonder if Tanzania is the first country in the world where mobile money transactions are worth more than half the country’s GDP? I think it probably is.

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* GDP Estimates are from the IMF. For 2013, these were as follows: Tanzania US$32.5bn, Kenya US$45bn

Further reading: Tanzania telcos in Africa’s first ‘interoperable’ mobile money pact

5 thoughts on “Chart of the week #13: Mobile money transactions in Tanzania are worth how much?

  1. Amos

    This is very interesting. Basically anybody who develops a B2C business in Tanzania right now should consider mobile transactions as part of their business model. This also leaves me wondering, will credit transactions ever pick up pace in Tanzania? Or will banks have to model credit transactions around mobile transactions?

    1. mtega Post author

      Thanks Amos and Frank for your interesting comments.

      You are right of course, Frank, that Tanzania is doing well in mobile money largely because the level of banking with the traditional financial sector is so low.

      The potential links between traditional banking and mobile phone companies are interesting, though I think they would find it very difficult to bring their very different approaches together. I think the kind of partnerships we see already – where you can link your bank account to your mPesa account, for example – are more likely to be the way forward.

      Incidentally, some numbers I saw recently in the East African suggest that the traditional banks’ own mobile money products had extremely low levels of usage in Tanzania – less than 0.002% of the total transaction value of mobile money. In other words, mobile money with mobile phone networks has taken off, but mobile banking with traditional banks has not. The article is here

  2. Frank Kileo

    Basically this speaks of two things; The first one is a reflection of poor penetration of the traditional financial services and the second one is poor financial inclusion among most Tanzanians. (even in places with formal financial services). Most People will visit the ATM once a month when the salary is out.

    However, on the other hand this also speaks of a relatively higher rate technology uptake in Tanzania. I recall Tanzania to have been named a country where people tweet the most at night.
    Amos, everything is going mobile, my prediction is that the banking sector will sometime in the future merge with telecoms. we will see serious mergers like maybe Barclays and Vodafone (especially at their subsidiary and sub subsidiary levels in Africa).

  3. @bobmbori

    Nice piece. Indeed frank your comments/predictions on merger of telecom & banking is already taking shape in Kenya with regulatory licensing of equity bank with telecom license and their recent deal to use airtel infrastructure. Opens pandora box.
    I think traditional banking may be caught off guard by disruptive innovation on this front. This trend likely to be replicated regionally.

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