Propelled significantly by the rapid expansion of mobile money services, Tanzania’s digital economy has surged in recent years. Recent statistics reveal that the number of mobile money accounts in the country has doubled over the past five years, reaching 55.5 million by June 2024.
With an expected GDP growth of 6.3% before 2025, Tanzania’s digital transformation is largely driven by rapid advancements in information and communication technology (ICT). This transformation is set to advance the economy and unlock new avenues for growth and development.
A significant uptick in transaction volumes coincides with the rise in mobile money accounts. Reports indicate a 74.5% increase in annual transactions, which now exceed 5.2 billion. The number of registered SIM cards has also seen a notable increase, rising by 16.4% from 62.3 million in April 2023 to 72.5 million in April 2024.
M-Pesa has emerged as the market leader among mobile money providers, with an impressive subscriber base of over 20.6 million. Tigo Pesa, Airtel Money, Halopesa, and T-Pesa follow closely behind, with respective subscriber numbers of 17.8 million, 11 million, 4.5 million, and 1.4 million. This competitive market reflects a thriving digital financial sector.
Nape Nnauye, the former Minister for Information, Communication, and Information Technology, emphasised the government’s efforts in fostering digital growth. Speaking to a local newspaper, Nnauye stated, “A dedicated content committee raises awareness on issues of false information and limited broadband access. Acts like the Cybercrimes Act, the E-Transactions Act, and the recent Personal Data Protection Act of 2022 address technology challenges. Our National Cybersecurity Strategy and ongoing ICT awareness initiatives combat cybercrimes and bridge the digital divide, while soft centres under the Digital Tanzania Programme reduce foreign technology dependency and foster skilled labour.”
The Tanzanian government has further bolstered this transformation through several key initiatives, including the approval of the National Digital Economy Strategy 2024-2034 and the revised National ICT Policy 2016. These strategies are instrumental in steering the country’s digital and economic progression.
Impact on Tanzania’s Economy
The expansion of mobile money services has had profound implications for Tanzania’s economic landscape, particularly in enhancing financial inclusion. Previously underserved populations, especially in rural areas, now have access to formal financial services, fostering greater economic participation and helping to alleviate poverty.
Mobile money has also empowered individuals and small businesses by making it easier for them to access financial resources. Entrepreneurs and small business owners can now manage funds, conduct transactions, and access credit more conveniently, fostering entrepreneurship and supporting local economic growth.
The improved accessibility to financial services has led to increased consumer spending, as individuals can now make purchases and investments with greater ease. This heightened spending activity stimulates economic growth and supports local businesses, contributing to overall economic development.
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The expansion of mobile money services in Tanzania has driven the growth of a thriving digital ecosystem. This includes investments in technology infrastructure, innovation, and the creation of new job opportunities in the tech and financial sectors, ultimately contributing to a more vibrant and dynamic economy.
The proliferation of mobile money services is likely to enhance financial literacy among Tanzanians. As more people engage with digital financial tools, they gain a better understanding of financial management, which can lead to more informed financial decisions and greater economic stability.
The rapid growth of mobile money in Tanzania is transforming the country’s financial landscape. The immediate outcomes are enhanced financial inclusion and economic empowerment, but the long-term benefits are even more substantial. As the sector evolves, it will drive economic diversification, improve financial literacy, and attract foreign investment, ultimately fueling sustainable development and shaping Tanzania’s digital economy.
