writes Ziyad Chaouki
Africa-Press – Uganda. Africa’s mobile money revolution is re-writing the rules of power and patronage across the continent’s politics.
Mobile money is surging across Africa, and its impacts extend far beyond financial inclusion. These digital payment systems are dramatically altering political patronage networks, government accountability, and power dynamics between states and citizens.
Mobile money systems allow users to store, send, and receive funds on their mobile phones without needing traditional bank accounts. Unlike conventional banking that requires physical infrastructure and documentation, mobile money only needs a basic phone and ID. The ease of access makes financial services accessible to previously unbanked populations.
According to the GSMA’s 2024 State of the Industry Report, sub-Saharan Africa now accounts for nearly half of all mobile money accounts globally, with transactions worth over $1 trillion a year.
When M-Pesa launched in Kenya in 2007, few predicted how profoundly mobile money would transform African politics. A staggering 59 per cent of Kenya’s GDP flows through M-PESA. Ghana and Uganda have seen similar trends with mobile money transactions exceeding 50 per cent of GDP.
The political dimensions of digital finance
Mobile money’s political significance stems from its ability to bypass traditional intermediaries, both financial and political. In Kenya, political patronage has historically operated through controlled access to resources. Local power brokers, chiefs, and political operatives serve as crucial conduits for everything from agricultural subsidies to emergency relief. Mobile money disrupts these networks by enabling direct transfers that bypass these traditional gatekeepers, weakening their control and diminishing political leverage.
During Kenya’s 2022 elections, both major coalitions utilised M-Pesa to distribute campaign funds directly to local volunteers. This bypassed regional party officials who had traditionally controlled these resource flows. According to research by Kramon on electoral patronage in Kenya, the average candidate for Parliament in Kenya’s 2007 elections spent £35,500 on handouts to voters. With mobile money, campaign funding can now flow directly to grassroots organizers, reducing the power of intermediaries in the political system.
This pattern has been replicated in Tanzania’s 2020 election, where opposition candidates leveraged mobile money to fundraise and distribute resources directly to supporters. This circumvented traditional party hierarchies that often limited grassroots access to campaign funding.
Taxation, transparency, and state capacity
Digital payment systems are also reshaping the fiscal relationship between state and citizen. Kenya’s revenue authority has pioneered the integration of its tax system with mobile money. The iTax platform is connected to M-Pesa and has increased compliance while reducing corruption opportunities. Small business owners can now make tax payments directly through their phones, creating digital records that were impossible in cash-based systems.
Ghana has also been successful in taxing previously informal economic activities through its mobile money system. Tax revenue has increased substantially, with mobile money transactions growing by over 110 per cent in 2020 compared to the previous year. This expanded fiscal capacity gives the state greater autonomy from both international donors and domestic economic elites.
It has not all been smooth progress. In 2018, the introduction of a controversial mobile money tax in Uganda was widely interpreted as an attempt to slow adoption after digital payment platforms facilitated opposition fundraising. The political backlash was immediate and forced a reduction in the tax rate from 1 per cent to 0.5 per cent, that revealed the political risks of interfering with these popular services.
New forms of collective action
Perhaps most significant is how mobile money has facilitated new forms of political organisation. In African politics, traditional collective action often required physical gathering, making it vulnerable to state repression. Digital financial platforms enable decentralised coordination through rapid resource mobilisation and distribution. This creates networks that can operate without centralised control and are therefore much harder to disrupt.
Kenya’s vibrant civil society demonstrates this transformation clearly. During Kenya’s 2017 election disputes, activist groups used M-Pesa to rapidly mobilize support for demonstration logistics and legal defence funds. UNCTAD Secretary-General Mukhisa Kituyi, reflecting on his time in the Kenyan government when M-Pesa was licensed, noted: “We did not know how inefficient our payment systems were until we saw M-Pesa.” The platform has become crucial for civil society organizations to quickly gather resources during political crises. During Sudan’s 2019 protests, when the banking system was largely shut down, activists used mobile money to sustain demonstrations by distributing funds for medical supplies and transportation. The mobile money platforms enabled protest organisers to maintain financial flows even when traditional banking channels were blocked. The inability of authorities to block these financial flows contributed significantly to the movement’s resilience.
In Zimbabwe, where hyperinflation and currency controls have been used as tools of political control, mobile money platforms provide citizens with alternative financial channels outside direct state manipulation. These platforms became crucial for collective action by facilitating financial transactions when traditional economic systems failed. The government’s 2020 restrictions on mobile money services, officially justified as anti-money laundering measures, were widely perceived as attempts to reassert control over these independent economic spaces.
Gender politics and digital finance
Mobile money is also subtly reshaping gender relations. A groundbreaking study by MIT and Georgetown University researchers demonstrated that mobile money in Kenya helped an estimated 185,000 women shift from subsistence farming to business occupations. The research found that M-Pesa increased per capita consumption in female-headed households, reducing extreme poverty for these families.
In northern Nigeria, cultural restrictions often limit women’s public mobility and economic activity. Here, female entrepreneurs using mobile payment systems have developed economic autonomy that translates into greater political voice. According to the National Democratic Institute, rural women who gained financial autonomy through mobile banking have become more engaged in local political processes, reporting that “before LHI came to us, we didn’t know our rights, we’d just sit at home”.
The future of digital power
The political implications of mobile money are neither uniformly liberating nor controlling. The same systems that allow citizens to bypass corrupt officials also enables unprecedented levels of state surveillance. The financial data generated by these platforms can empower both democratic accountability and authoritarian control, depending on governance contexts.
As African governments develop central bank digital currencies, these tensions will only intensify. Nigeria’s eNaira and Ghana’s e-Cedi represent attempts to reclaim some control from private mobile money providers. This has significant implications for state power and financial surveillance.
As mobile money adoption continues to accelerate across the continent, its political impacts will likely deepen. The technology fundamentally alters how resources flow through society, who controls these flows, and the visibility of transactions to different actors.
For democracy advocates, mobile money presents opportunities to circumvent traditional gatekeepers and build more direct accountability relationships. For authoritarian regimes, these platforms present both threats to established control mechanisms and opportunities for more sophisticated surveillance.
What’s clear is that mobile money is not merely a financial innovation but a profoundly political technology reshaping governance across Africa. Understanding these dynamics is essential not just for financial inclusion efforts but for anyone concerned with African political development in the digital age.
As states and citizens negotiate this new terrain, the question is not whether mobile money will transform African politics, but how different actors will adapt to and shape these transformations in the ongoing struggle for power, resources, and accountability.
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