Exploring the Dynamics of Mobile Money in Africa: Causal Links and Financial Inclusion Outcome

Abstract

This study investigates the causal relationships between key mobile money indicators and their implications for financial inclusion in Africa. Using macro-level data from the Global Mobile Money Dataset covering the period 2011-2023, we apply the Toda-Yamamoto causality approach to analyse interactions between registered accounts, active accounts, registered agents, and global transactions. Our results reveal a bidirectional causal relationship between registered accounts and global transactions, highlighting a reinforcing cycle that strengthens mobile money adoption. Additionally, registered agents play a crucial role in facilitating transactions, yet no direct causality is found between agent expansion and new account registrations, suggesting that factors such as trust and awareness are critical drivers of adoption. These findings emphasise the need for targeted policy interventions beyond agent network expansion, including financial literacy programs and user engagement initiatives. This study contributes to the growing literature on mobile money by providing empirical evidence on its role in financial inclusion and offering policy-relevant insights. Future research could explore the long-term integration of mobile money with traditional financial systems and its broader economic implications across diverse regulatory environments.