THE AFRICAN BUSINESS FORTUNE MAGAZINE ISSUE #006 The African Business Fortune Magazine | Page 53

THE AFRICAN BUSINESS FORTUNE - TECHNOLOGIES
and contributed to a more stable and
open business environment.
As a result, electronic payments
provided a higher potential tax revenue base for governments, while also
bringing the added benefits of lower
cash handling costs, guaranteed payment to merchants and greater financial inclusion for consumers.
The report highlighted that African
countries experienced, on average a
0.05 per cent increase in GDP due to
increased card penetration. Many African countries are in the early stages
of developing their financial systems
with appropriate infrastructure to
support electronic payments.
In the coming years, the increase in
the use of mobile phone technologies
to make payments is expected to increase electronic payments penetration. Increased electronic payment
usage added US$70,000,000 to Kenya’s GDP from 2011 to 2015.
It also highlighted that African
countries had the second lowest average number of jobs added per year
from increased card usage, which is
not surprising given the region’s low
usage rates and developing financial

infrastructure to facilitate electronic payments.
Real consumption grew at an average of 2.3 percent from 2011 to 2015,
of which 0.01 percent is attributable to
increased card penetration. This shows
that card usage accounted for about 0.4
per cent of growth in consumption.
Countries with the largest increases in
card usage experienced the biggest contributions in growth and economic performance.
Contribution to Employment
Increased card usage and electronic
payment created the equivalent to an
average of 5,330 jobs in Kenya per year
between 2011 and 2015. In the 70 countries sampled it created almost 2.6 million jobs on average per year between
2011 and 2015.
Both emerging markets and developed
countries experienced gains in consumption due to higher card usage. Increased
card usage added 0.2 percent to consumption in emerging markets, compared with 0.14 percent in developed
countries between 2011 and 2015.
The corresponding figures for GDP
were 0.11 per cent for emerging econo-

mies and 0.08 per cent for developed countries, and suggest that all markets, regardless of current card penetration rates, can
benefit from increases in consumption due
to increase in card usage.
Potential Future Growth
Across the 70 countries in the study,
Moody’s found that each 1 per cent increase
in usage of electronic payments could produce, on average, an annual increase of approximately USD104 billion in the consumption of goods and services.
Assuming all future factors remain the
same, this could result in an annual average
increase of 0.04 per cent to a countries GDP
attributable to card usage.
The study highlights that expanding
electronic payments alone will not necessarily increase a country’s prosperity — it
requires the support of a well-developed
financial system and healthy economy to
have the greatest impact.
The report recommends at a macro-level,
to encourage the further elec