With the new progress witnessed on the financial inclusion index, Senegal is planning to digitize payments in order to speed up its growth and inclusive development.
By doing this, 50% of all national payments, Senegal’s economic growth would increase by over FCFA 104 billion (over USD 177 million) every year, according to a new report by the Prime Minister to the President of the Republic.
The report committee was led by the Minister of Finance, the Minister of Solitary Economy and the Minister Delegate to the Prime Minister on behalf of the Government. The report was also compiled in partnership with the Better Than Cash Alliance as well as a MM4P program of the United Nations Capital Development Fund (UNCDF).
Prime Minister of Senegal, Mahammed Dionne, said: “Better collaboration between public and private sectors on digitizing payments would make it possible to mobilize more resources, increase business productivity, improve financial inclusion and add FCFA 104 billion per year to our country’s GDP.”
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Highlights from the Report
- Economic growth would benefit by over FCFA 104 billion (over USD 177 million) per year if Senegal digitize half of all national payments.
- The public administration has digitized nearly 100% of its expenditure, thus mobilizing resources, increasing the stability of financial forecasts and gaining funds for development.
- Local authorities could increase their daily tax collection rates by a factor of seven if they collected them electronically.
- The State’s social action agenda would be reinforced if all social programmes were digitized. Digitizing the Universal Health Cover Agency alone would impact 3 million beneficiaries, mainly women and children.
- The value of payment to the merchants is FCFA 16 000 billion (over USD 27 billion), almost entirely paid in cash. Digitizing 50% of these transactions would increase GDP by FCFA 44 billion (over USD 75 million) per year and the formal sector would achieve productivity gains of over 205 days.
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Dr. Ruth Goodwin-Groen, Managing Director of the Better Than Cash Alliance, also commented on the development.
“We congratulate Senegal for having accelerated its shift to digital payments, setting an example for the region. The government has digitized 100% of its payments to businesses and authorities.
“If social programs and the digitization of revenue were added, up to 75% of costs could be saved. Digitizing merchant payments could also have a significant impact on the country’s inclusive growth,” She said.
In order to make the most of this work, the report recommended the following:
- Deploy an institutional framework dedicated to digital payments.
- Make it possible for any person or institution to send or receive money, without restrictions on operators or payment platforms.
- Boost innovation while raising the awareness of all market participants about the added value of digital payments.
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