Hormuud Telecom, Somalia’s telecom operator and a leading employer in the country, registered have been registering a monthly-on-monthly increase in mobile money payments across its EVC Plus platform. There was a steady increase from April to August despite the country being hard hit by the Covid-19 pandemic.
The total number of transactions during this period of time rose but the transaction value decreased indicating a rise in smaller value money exchanges as economic activity is hard hit at home and abroad.
Mobile money is an essential pillar of most countries in sub-Saharan Africa; particularly Somalia. Thus far, the money penetration rate is 55%. A 2018 World Bank report reveals three-quarters of the Somali population aged over 16 years of age rely on mobile money. To get a picture, less than 40% of the population in economic powerhouse Nigeria, had mobile money accounts in 2018.
In a statement during the press release, Hormuud Telecoms CEO, Ahmed Mohamud Yuusuf pointed out mobile money as a “vital pieces of infrastructure for a functioning Somali economy”. He went on to say, “The digital adoption that we’ve seen within the country over the past 10 years has been incredibly important. It’s facilitated enterprise and is the foundation for remittances, which makes up some 23% of Somali GDP.”
The pandemic and subsequent lock-downs have resulted in a drop in global remittance payments. This has been proven by a report supported by the Anti-Tribalism Movement (ATM). The UN estimates there are 2.6 million internally displaced persons in Somalia, of whom many rely on aid sent through mobile money.