08 October 2020
Somalia’s Hormuud Telecom said it has been registering a monthly-on-monthly increase in mobile money payments across its EVC Plus platform, from April to August, despite the country being hard hit by the Covid-19 pandemic.
The total number of transactions during this period 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 in the east of the continent. A 2018 World Bank report reveals three-quarters of the Somali population aged over 16 years of age rely on mobile money. In stark contrast, less than 40% of the population in Nigeria had mobile money accounts two-years-ago.
In a statement, Hormuud Telecom’s CEO, Ahmed Mohamud Yuusuf pointed out mobile money as a “vital pieces of infrastructure for a functioning Somali economy”. He added: “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, which formed part of 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.