In a bid to curb the spread of Coronavirus through person-to-person (P2P) money transactions, the Kenyan government through the country’s central bank and to all financial institutions, has directed that all charges on mobile money should be waived.
Thanks to this order, there will be no charges on all transactions up to 1,000 Kenyan Shillings which is the equivalent of 10 dollars.
As well as this, to encourage the use of digital payments over cash, the East African telecoms, like Safaricom, will allow SMEs to increase their daily M-Pesa transaction limits from 70,000 Kenyan Shillings to 150,000 that’s the equivalent of about $700 to $1,500. Subsequently, the daily limit is raised from Ksh 140,000 to Ksh 300,000. While the monthly limit has been stopped.
These measures represent the ability of the Kenyan government to use digital finance as a means of influencing social distancing and P2P transactions in an infectious health crisis. The Kenyan President Uhuru Kenyatta when giving the directive said this was to “explore ways of deepening mobile-money usage to reduce risk of spreading the virus through physical handling of cash”.
This directive is expected to run from March 16 to April 30. It is expected that it will help reduce the exchange of cash from hand to hand, as well as lessen cash circulation, thus, imparting the economy cashless policy growth.
Kenya is one country in Africa that has largely adopted mobile money. The United Nations Conference on Trade and Development (UNCTAD) confirmed that 78% of the population uses mobile money and the world bank established that 80% of its population has an account. Hence, it’s expected that there will be a high impact as a result of this transaction fee waiver.
As it stands, Kenya already confirmed three cases of coronavirus, which has demanded the closing down of schools and initiating travel bans.
In Ghana, all transfers of 100 cedis (about $18) or below will attract no charge according to a current directive from the BoG. The measure is supposed to be in place for the next three months
This is similar to what Nigeria did in December 2019 in efforts to move the country’s cashless policy, except in Nigeria, citizens don’t rely heavily on mobile money, but in a bid to reduce circulation of cash the government charged a cash handling charge on daily cash withdrawals over N500,000 for individuals and N3,000,000 for businesses.
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