Affinity Africa report lays bare the cost of Africa’s cash dependency – and the actions needed to break it

Accra and London, 17 June — Affinity Africa, Ghana’s leading digital banking platform, has released a new report in collaboration with the Mo Ibrahim Foundation and Yale’s International Leadership Centre examining the drivers and impacts of cash dependency in Africa and the steps required to address it. 

The full report is available for download here.

The research makes clear that Africa’s cash dependency is not a technology problem. The continent already processes 74% of global mobile money volume — representing $1.1 trillion in value across 1.1 billion accounts in 2024. The problem is that digital payments do not yet outperform cash for merchants, households, and small businesses, resulting in more than 90% of mobile money value being withdrawn immediately upon receipt.  

“The gap between the financial infrastructure Africa has built and the economic behaviour it was supposed to change is vast, and the cost of that gap compounds every year,” said Tarek Mouganie, Founder and Group CEO of Affinity Africa. “The problem is incentives. Digital payments do not yet outperform cash where it actually matters. Until digital is cheaper, more reliable, more accessible and more useful than cash at that level, the reality will not change” 

The dependency on cash has significant economic consequences. Small and Medium Enterprises (SMEs), which account for roughly 80% of jobs and are often entirely cash-based, receive less than 5% of bank credit — contributing to a $330bn financing gap. Disproportionately high remittance fees, averaging 8.7% against the 3% SDG target, drain a further $8 billion annually from African households. Meanwhile, 85% of African workers remain in the informal sector, outside the tax base, limiting governments’ capacity to fund essential services.  

“The SME financing gap, the annual remittance tax, the number of workers outside the formal economy — these are not inevitable features of the continent,” said Emma Sky OBE, Founding Director of Yale’s International Leadership Center. “They are the cost of an unfinished transition. Closing that gap is among the highest leverage moves available to anyone serious about Africa’s flourishing.”  

The report makes clear that the issue can be addressed if the development of digital infrastructure is aligned with incentives, setting out three core actions that must happen together and in sequence — each creating the conditions for the next — to break cash dependency: 

1. Make digital cheaper than cash for merchants: Regulators to cap merchant discount rates and provide fee subsidies for small merchants, while governments accelerate the shift by requiring digital payment acceptance for all government services, licences, and transfers. 

2. Mandate interoperability: Regulators to mandate real-time settlement across platforms, enforce cross-border connectivity within regional economic blocs, and apply financial penalties for non-compliance. 

3. Create reasons to stay digital: Regulators to give new digital innovators the headroom to offer credit, savings, and insurance products at scale; operators to provide transaction data as the basis for credit underwriting; and innovators to be given open APIs to build fintech products on existing payment rails. 

Alongside the three core actions, the research also includes a detailed overview of the responsibilities of the other relevant stakeholders across Africa’s digital financial infrastructure – including governments, banks, Development Finance Institutions and investors – and the lessons that can be learnt from other markets in Africa and around the world.  

“Incremental reform will not be enough. The public sector must move faster in building the regulatory clarity, institutional coordination, and governance frameworks capable of supporting Africa’s next phase of economic transformation,” said Mo Ibrahim, Founder and Chair of the Mo Ibrahim Foundation. “Because ultimately, ownership cannot exist without accountability, and economic autonomy cannot exist without strong institutions.” 

The report calls actors to come together and address the issue as a matter of urgency. By 2050, one in four people in the world will be African — the window to get this right is narrowing, and the cost of incrementalism rises every year.  

The full report is available for download here.

Media contacts: press@affinityafrica.com and will.king@thorndonpartners.com