A SADC Perspective on the Selected Challenges Affecting the Use of Mobile Money to Promote Digital Financial Inclusion and Trade in the AfCFTA

 The use of mobile money has transformed the lives of many poor people across the Southern Africa Development Community (SADC). Millions of individuals who are excluded from the mainstream and formal financial sector are using mobile money to access financial services. In this regard, mobile money plays a huge part in enabling those in the informal sector to use mobile money in furtherance of the African continent’s digital and financial inclusion agenda. Financial inclusion is a central enabler of the African Union (AU)’s growth agenda in line with the United Nations (UN)’s Sustainable Development Goals (SDGs) such as poverty alleviation, expanding economic opportunities and promoting market access. The African Continental Free Trade Area (AfCFTA) seeks to establish one of the world’s biggest trade and economic markets. While the AfCFTA is shaping up, it is important to note that financial technology (fintech) products such as mobile money can greatly assist in improving cross-border trade especially among the poor and small to medium enterprises (SMEs). However, several challenges are hampering the sustainable use of mobile money in the SADC. There are regulatory challenges affecting the use of mobile money in many SADC countries owing to the absence of robust regulatory frameworks. Digital illiteracy is also a challenge because policymakers and the general populace lack the requisite know-how to use fintech products optimally. Some governments in the SADC region have not fully embraced mobile money, making it difficult to drive digital financial inclusion for the poor. In this chapter, the authors argue that the AfCFTA can leverage the goal to create a single common market for goods and services on the proven ability of mobile money to ramp up digital financial inclusion and trade in the SADC region. Although our focus is on the SADC region, the analysis in this chapter is reflective of experiences in other regional economic communities (REC) across the African continent. We further argue that policymakers should consider improving the regulatory frameworks of fintech products in their respective SADC countries. There should be improved digital and financial literacy for the general public, especially the poor, unbanked and financially excluded persons in the SADC region to enhance their participation in the formal trade and businesses in the financial sector.