Why is MTN not on Ghana’s Approved List?
In February 2021, mobile money transactions in Ghana were valued at GHS67.9 billion (USD11.8 billion)[1] and there were 17.5 million active mobile money accounts, according to the Bank of Ghana (BoG). With its 10.6 million self-reported active users, MTN is the dominant player in the market[2]. However, as has been discussed by Ghanaian press these last few days, the ‘List of Approved Electronic Money Issuers and Payment Service Providers’[3] released by the BoG this month does not include MTN.
Significance – Regulatory requirements
There has been no official announcement explaining the omission or sanctioning MTN. Furthermore, thus far we have not seen any difficulties in mobile money transactions (referred to as MoMo) using MTN i.e., there is no embargo in evidence. According to one Ghanaian outlet, TechGH24[4], a BoG official (a) confirmed that MTN’s license is still in effect and (b) stated that MTN is not on the list because it has not yet met requirements on “business localisation”. Under Ghanaian law, there is a GHS20 million minimum capital requirement for electronic money issuers, of which 30% should be held locally. However, the deadline for compliance is January 2022, and MTN has publicly and recently stated its intention to meet this target[5]. Central bank officials we spoke with were similarly sanguine.
Outlook – Market share
Boosting local ownership, participation and value addition in strategic industries are core policy goals for the current administration. That said, on this particular matter, at this particular moment, there does not appear to be regulatory action from the Bank of Ghana targeting MTN. As recently as 2018, MTN was being lauded for its IPO on the Ghanaian Stock Exchange)[6]. Moreover, the deadline for meeting the 2019 legislation requirement is January 2022.
There are other potential sources of conflict on the horizon. For instance, MTN’s market dominance across voice and data as well as MoMo e.g., 57.5% of voice and 69% of data subscriptions in June 2020 per National Communication Authority figures. MTN has already been labelled a significant market power by the authorities. There is also the risk of additional levies if Ghana’s fiscal deficit does not fall to the 5% of GDP target and legal limit at the desired rate.
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[1] Up from USD5.3 billion in February 2020
[2] https://mtn.com.gh/wp-content/uploads/2021/02/MTNGH-2020-FY-SENs.pdf
[3] https://www.bog.gov.gh/wp-content/uploads/2021/04/BOG-Approved-List-of-Electronic-Money-Issuers-and-Payment-Service-Providers.pdf
[4] https://www.techgh24.com/mtn-missing-from-bogs-list-of-approved-mobile-money-operators/
[5] https://mtn.com.gh/wp-content/uploads/2021/02/MTNGH-2020-FY-SENs.pdf
[6] It was also the first to introduce mobile money in Ghana (2009
*Photo Credit. Benjamin Dada, Unsplash
**Amended to add “Central bank officials we spoke with were similarly sanguine.”
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