Does Africa need Facebook's Libra?

One of the key selling points of Facebook’s Libra currency, formally unveiled in June this year, was that it would prove a boon the world’s 1.7 billion-strong unbanked community. Over in Africa, however, the humble mobile phone has been fulfilling such a role for the past 20 years. And the continent’s mobile revolution is only just beginning. 

Nearly half of the world’s mobile banking offerings are offered by telecommunications companies in Africa, according to industry body the GSM Association; Africans conducted 1.7 billion mobile money transactions worth $26.8bn in 2018, a 15.3% growth in value on the previous year.

Remarkably, such volumes have been achieved in spite of a relative lack of activity in the continent’s three most populous markets – Nigeria, Ethiopia and Egypt. Reforms and new initiatives in these three countries may lead to more than 110 million new mobile money accounts in the next five years on the continent in the coming five years. 

Though mobile operators such as Kenya’s Safaricom and pan-African operator MTN were in the vanguard of the continent’s mobile banking revolution in the early 2000s, traditional lenders have caught up in earnest, with the line between the two becoming increasingly blurred. A recent example of such a convergence has been the growing numbers of lenders offering banking services over WhatsApp, taking advantage of the unique position the messaging platform occupies in Africa’s social, economic and political landscape. 

Much mileage remains to be gained on the continent from the rollout of basic banking services over smartphones; but the increasing availability of affordable smartphones and  the development of innovative blockchain solutions are already delivering ever more sophisticated financial services. 

Just how much impact Libra will have on the unbanked remains to be seen. But the momentum behind Africa’s mobile revolution shows no sign of flagging, well into its second decade.