The spiralling cost of living has pushed Kenyans to shy away from mobile money transactions via agents as they look to cut down on withdrawal costs and other hidden charges.
Kenyans are now either sending or receiving money, incurring the stipulated charges in between, or withdrawing money in bulk, according to mobile money agents.
A mobile money agent at Westlands who spoke to Kenyans.co.ke stated that most customers also opt to pay via pay bill or till and are shying away from businesses which push customers to withdraw money.
As was the norm, some businesses used to persuade customers to withdraw money from an agent, mostly their own, while purchasing goods and services to rake in profit.
“As of last year, the number of transactions has reduced as most of the customers pay using pay bill or till number," the agent based in Westlands stated.
The Central Bank of Kenya also indicated that the cash handled by mobile money agents dipped to a historic record for the first time since the systems were introduced in Kenya nearly two decades ago.
Between January and November 2023, the amount dropped to Ksh7.165 trillion from Ksh7.2 trillion in 2022. This tallies to a 0.5 per cent decline, contrary to the rising trajectory witnessed since the inception of mobile money services.
It is yet to be clear whether the dip may affect Kenya's Gros Domestic Product as mobile money agents are said to handle about 60 per cent of the GDP.
However, according to the 28th edition of Kenya Economic Update (KEU), Kenya’s economic performance strengthened in 2023 despite continued challenges, with real GDP growth accelerating from 4.8 per cent in 2022 to an estimated 5 per cent in 2023. The growth was attributed to a strong rebound in the agriculture sector in 2023.
Nonetheless, the rise in mobile money transactions over the years necessitated the government to use a single-pay bill for all its payments to enhance accountability and efficiency.
President William Ruto thus ordered the closure of all existing government paybill numbers to ensure e-Citizen remains the Digital Payments Platform while 222222 becomes the sole Paybill payment platform. The government, through the Finance Act 2023, also increased the exercise duty on mobile transactions from 12 per cent to 15 per cent to raise revenue.
As Kenyans continue to cut down on costs and hope to save as the living conditions continue worsening amid high taxes and high cost of products, the government offers little hope for the future.
Speaking to the media in December, President William Ruto stated that the cost of living is affected by external factors beyond his control. However, he stated that his administration will continue setting up measures to prevent it from rising.
Among them is continuing to offer farmers subsided fertilisers and ensure they depend on irrigation rather than rain patterns.
"I have every intention to keep it here until things change. There is no miracle that is going to happen. We live in a global economy. The price of fuel is not controlled by the Kenyan government. It is controlled by the producers. I made a promise in the context of where we are. If things remain constant, I would have fulfilled my promise (to stabilise the dollar)," Ruto stated.
In his New Year address, he blamed the opposition and the Judiciary for sabotaging his projects, which he argued would uplift the economy. Among them is the 1.5 per cent Housing Levy, which was declared unconstitutional by the High Court.
With Kenya struggling to adjust its fiscal policies to uplift the economy, among them plans to sell debt-incurring parastatals, the World Bank advised Ruto to offer Kenyans cash rather than subsidies, invest in key infrastructure, research and development and connect the poor to economic growth, strengthen households' resilience to adverse weather shocks, and leverage fiscal policy to support poverty reduction objectives.
