In fifteen years, mobile money has become the main driver of financial inclusion in Africa. It is also increasingly becoming a target for taxation. These two realities now coexist in a contradiction that is beginning to take a heavy toll on African economies. The International Monetary Fund (IMF), the World Bank, and the United Nations Economic Commission for Africa (ECA) all agree on the same point: taxing digital transactions hinders financial inclusion without generating the expected revenue. Some governments are beginning to adjust their approach. Others are still searching for the right balance.

In Uganda, everything hinged on a single budgetary exercise. A daily tax on social media and digital transactions was introduced. The result, documented in the ECA's 2026 Economic Report on Africa , was immediate: more than 2.5 million internet subscribers lost and a 25% drop in mobile money transactions within a few months. The users didn't disappear. They simply returned to cash.

The Ugandan case is far from isolated. According to several data compiled across the continent, nearly twenty sub-Saharan African countries had introduced some form of mobile money taxation by the end of 2025. Some tax the value of transactions, others the revenues of operators, and still others the digital platforms themselves. Without a common policy or regional coordination, each state is experimenting with its own approach, often to the detriment of the most vulnerable populations.

The paradox is striking: even as major international institutions recommend using digital technology as a lever for tax collection, several African governments continue to target it directly for taxation.

An inclusive infrastructure that has become subject to taxation

Mobile money now represents more than 2.1 billion registered accounts worldwide, the majority of which are in sub-Saharan Africa, with over 514 million active users according to the ECA. In Kenya, M-Pesa has increased the financial inclusion rate from less than 30% to over 83% in less than a decade. Mobile money is no longer simply a financial service; it has become an economic infrastructure.

It is precisely because it has become indispensable that this infrastructure is attracting tax authorities. Digital transactions are visible, traceable, and have been growing rapidly since the Covid-19 pandemic. In a context marked by high debt, reduced fiscal space, and a gradual decline in international aid, they appear as a potential source of revenue.

The temptation is understandable. But the results are often counterproductive.

Academic research and institutional analyses converge: these taxes significantly reduce the use of digital financial services. According to the Danish Institute for International Studies , they can lead to a decrease in service usage of up to 39% in some contexts. User behavior is straightforward: when costs increase, they reduce their transactions, consolidate payments, or revert to cash.

“The principle is to mobilize revenue while having a limited impact on the poorest segments of the population by relying as much as possible on digitalization where there are clear benefits.” — Amadou Sy, IMF African Department, Spring Meetings, Washington, April 2026

The fiscal paradox: taxing what broadens the tax base

The argument of those who support these taxes is essentially budgetary: it is necessary to collect revenue where economic activity is visible. An understandable logic, but profoundly short-sighted.

Mobile money is now one of the best tools for economic formalization available to African states. By making transactions traceable and integrating millions of informal actors into identifiable circuits, it naturally broadens the tax base.

A 2025 study covering 36 African countries established a positive correlation between financial inclusion and tax revenue. In other words, the more people use digital financial services, the greater the tax collection capacity—provided their use is not discouraged.

Taxing transactions therefore weakens the very mechanism that would allow for a sustainable expansion of public revenue.

The CEA clearly summarizes this in its 2026 report: digital technology must be a lever for tax collection, not a target.

Kenya illustrates this alternative approach. By integrating mobile money data into artificial intelligence-powered detection systems, the country reduced VAT fraud by nearly 30% between 2019 and 2021. Today, mobile money there processes the equivalent of one billion shillings per day for payments related to public revenue.

A tax system that primarily penalizes the most vulnerable

Beyond the figures, a social reality remains: these taxes primarily affect those who have no banking alternative.

An in-depth three-year study by the International Centre for Tax and Development (ICTD) on Ghanaian e-levy has shown that, despite the planned exemptions, it is the poorest households that have borne the heaviest tax burden.

In a region where over 85% of jobs are in the informal sector, mobile money often represents the only access to the financial system. For a trader in Kumasi or a motorcycle taxi driver in Kampala, it is not a convenience service, but a vital tool for economic survival.

The wealthiest populations have bank accounts and alternative solutions. The others pay... or revert to cash.

"The cost of data remains a problem. If we truly want our youth to use these technologies, we must find a way to make them affordable."

— Stephen Karingi, Director of the Macroeconomic Division of the UN-ECA, Tangier, April 2026

The risk of sending a bad signal to investors

Another, less visible consequence concerns economic attractiveness. Africa is now seeking to attract massive investments in its fintech and digital ecosystems. However, for many players in the sector, fiscal instability is a major obstacle. Taxes introduced without consultation or abruptly modified create a climate of uncertainty that is unfavorable to long-term investments.

During the Spring Meetings of the IMF and the World Bank in April 2026, several African leaders stressed the need to invest in digital infrastructure to support artificial intelligence and digital financial systems.

Taxing digital usage without a strategic vision therefore sends a contradictory signal to the investors that the continent is precisely trying to attract.

Ghana, a symbol of a political turnaround

Ghana offers the most emblematic example. Long presented as a model of financial inclusion, the country introduced in 2022 a tax on electronic transactions, the e-levy, initially set at 1.75%, then reduced to 1%.

The effects were immediate: a drop in transaction volumes, a massive return to cash, and strong public protest. During the 2024 presidential campaign, the main parties promised its abolition. Elected president, John Mahama officially repealed it on April 2, 2025. Parliament voted unanimously for its abolition.

But the ICTD highlights another, less visible effect: the elimination of the tax also led to the disappearance of several tax data collection mechanisms built around the digital system. The true potential of the e-levy lay not in the tax itself, but in the information it generated about economic flows. Ghana has therefore lost both the revenue and the tools.

The alternative path: using digital technology for tax purposes

More effective models do exist, however. Kenya remains the continental benchmark, but other countries are also moving in this direction. In South Africa, tax compliance systems powered by artificial intelligence generated over 101 billion rand in additional revenue between 2022 and 2023, according to the ECA. Rwanda is developing similar approaches.

In all these cases, the logic is reversed: digital technology is used to identify untaxed income rather than to directly tax transactions.

Nigeria recently presented a similar approach at the 2026 Spring Assemblies: improving public resource mobilization while reducing the tax burden on lower incomes.

Therefore, equilibrium is possible.

Taxing operators rather than users, using mobile money data to identify significant economic players in the informal sector, connecting digital platforms to tax and customs systems: these solutions already exist and produce more sustainable results.

“The question is no longer whether Africans can finance this transformation. The question is whether we will do it collectively, strategically, and on a large scale.” — Claver Gatete, Executive Secretary of the UN-ECA, Tangier, April 2026

A political choice rather than an inevitability

The budgetary pressure pushing several African states to tax mobile money is very real. By 2025, African governments were devoting nearly a fifth of their revenue to debt servicing. Fiscal space is shrinking, while social needs are increasing.

But the logic of immediate return can become a strategic dead end.

International institutions, academic work and national experiences now converge on a common finding: excessively taxing mobile money often yields less than expected, weakens financial inclusion and penalizes the poorest populations first.

The problem is no longer a lack of information. The data exists. So do the alternatives.

The real issue is now political: choosing between a logic of immediate taxation and a long-term economic transformation strategy.

For the millions of Africans whom mobile money has gradually integrated into the formal economy, this difference is anything but abstract. It is measured in daily costs, a return to cash, and years lost on the path to financial inclusion.