At GSMA’s 2025 Mobile World Congress (MWC) in Kigali, leaders debated how Africa’s fast-growing digital finance ecosystem can become more affordable, trusted, and interoperable. These discussions highlighted the broader challenge of strengthening inclusive digital payments and tax compliance in Africa, ensuring that digital systems expand opportunity rather than deepen inequality.
In fact, Rwanda’s President Paul Kagame stressed in his keynote speech that technology must “benefit everyone,” warning that persistent connectivity and affordability gaps could widen social and economic divides.
GSMA currently estimates that mobile currently contributes $220 billion to Africa’s GDP. Although these estimates remain highly sensitive to several assumptions, GSMA projects that this could grow as AI and next‑generation networks roll out. But infrastructure alone is not enough; affordability, trust, and smart pricing will determine whether digital payments replace cash at scale and generate useful data trails for tax administrations.
Industry participants and policymakers at the 2025 Kigali MWC highlighted a recurring set of challenges and emerging opportunities. The points summarised below surfaced repeatedly across sessions and discussions and, irrespective of individual views, reflected a strong focus on enabling African consumers to access mobile services more easily and safely.
Challenges
- Device affordability: In many markets, most people live under 4G coverage but cannot afford smartphones capable of modern apps. Taxes and duties on entry-level devices further slow the transition from basic phones and limit access to digital finance.
- Pricing of digital payments: Merchant fees and cross-operator charges could discourage adoption, especially when demand is highly elastic to price and digital payments penetration is still thin – possibly pushing users and merchants back to cash whenever fees rise. This scenario was also observed in a 2022 ICTD study on digital merchant payments in Rwanda.
- Security and trust: Fraud and scams may bring the risk of an increased lack of trust in digital payments. Operators are strengthening biometric registration and network-level filters, but consumer awareness remains the most effective “firewall.”
- Fragmented payment systems: Few African countries have state-led, interoperable instant payment rails comparable to India’s UPI or Brazil’s Pix, although many systems have been piloted and launched recently – so users still face higher costs and limited reach across networks.
- Regulatory and infrastructure gaps: Unresolved spectrum policy and unclear 5G economics threaten to widen coverage and affordability gaps, limiting investment in networks needed to handle low-cost, high-volume digital payments.
Emerging Opportunities
- Inclusive tech deployment: If AI tools and next-gen networks are priced for local realities—rather than as elite pilots—mobile’s GDP contribution can rise while expanding access for low-income users.
- Policy reform on devices: Removing or reducing taxes on affordable smartphones, coupled with smarter supply-chain policies, can widen the pool of users. While not directly mentioned at the Congress, the fiscal costs may be sizeable and need to be considered.
- Digital public infrastructure (DPI): Rwanda’s rollout of e-ndangamuntu (digital ID) and the eKash payment switch shows how DPI can lower onboarding friction, improve KYC processes, and generate robust data.
- Interoperable payment platforms: eKash, supervised by the National Bank of Rwanda, links banks and mobile money for instant transfers. More than 2.1 million Rwandans have used it for 43 million transactions, reducing fragmentation and supporting interoperable P2P and P2M payments.
- Consumer protection and trust: Network-level protections, visible enforcement against fraud, and sustained awareness campaigns can rebuild trust and pull more users into digital ecosystems.
- Smarter pricing strategies: Treating payments as a low-margin utility while earning revenue from value-added services can expand transaction volumes and the resulting audit trails.
Digital Payments and Tax Compliance: Research Insights
The International Centre for Tax and Development (ICTD) has been examining how digital merchant payments can support tax compliance – and how tax incentives can spur adoption. A 2022 Rwanda study showed that when merchant fees were reintroduced, many traders quickly shifted back to cash—a warning for policymakers who assume that digitalizing payments will automatically formalize trade. ICTD’s ongoing research, including a follow-up experimental study in Rwanda, is testing how digital payments and interoperable rails can be leveraged by tax administrations without deterring usage, and how DPI—such as payment switches, digital IDs, and data-sharing protocols—shapes both the quality of available data and merchants’ willingness to generate audit trails.
Cross-Operational Integration in Sub-Saharan Africa
Experiences from Brazil and India show that state‑backed, interoperable payment systems can dramatically boost access to digital payments, lower transaction costs, and create reliable data for tax administrations. For Sub‑Saharan Africa, similar approaches could ease interoperability challenges, especially around affordability and reliability.
Rwanda’s eKash offers a glimpse of this future but also reveals the importance of incentives. Cross‑operator P2M (Person-to-Merchant) transactions via eKash can impose a double cost: the payer pays sending fees, while the merchant pays a 0.5% acceptance fee. By contrast, on‑net MoMo Pay usually charges only the merchant, with no fee to the customer. With MTN holding around 64% of Rwanda’s active SIM market and over 5.3 million MoMo users, network effects push merchants toward MoMo‑only acceptance. Unless cross‑operator payments are priced competitively, eKash’s potential for everyday retail transactions will be undermined by rational user behavior.
This tension was a recurring theme in Kigali. AXIAN Fintech’s Erwan Gelebart argued that regulators should invest in DPIs, operators should not profit from broken infrastructure, and revenue should come from financial services, not from merely moving money.
Policy Priorities in Kigali
The conversations in Kigali point to a practical agenda:
- Make devices cheaper through targeted, well-designed and cost-effective tax policy and supply-chain fixes, broadening the base of users who can access secure digital payments.
- Build consumer trust with visible, network-level protections, enforcement against fraud, and continuous public education.
- Accelerate DPI—especially digital ID and interoperable payment switches—that lowers onboarding friction and enables merchants to join without burdensome KYC processes.
- Push for cross-network P2M pricing that does not penalize customers for paying across operators and allows merchants to accept multiple channels on fair terms.
Collectively, these policy directions could lead to increased use of formal digital payment channels, with implications for transaction traceability and tax compliance. They may also contribute to a reorientation of competition in the payments sector, reducing reliance on transaction-based revenues and placing greater emphasis on service differentiation atop shared and affordable payment infrastructure. Ultimately, though, the realisation of these effects will ultimately be contingent on institutional capacity and market behaviour, suggesting a need for continued research and evaluation.
