Walk into any market from Accra to Addis Ababa and you will see the same scene: a mobile money agent on one corner and a pile of physical notes changing hands on the other. A new report from Ghanaian digital financial services company Affinity Africa, produced in collaboration with the Mo Ibrahim Foundation and Yale University's International Leadership Center, puts hard numbers to that image. Its title is "Breaking the Cash Equilibrium: Unlocking Africa's Digital Financial Future," and its central argument is striking: Africa's cash dependency is no longer a technology problem. It is a problem of incentives.
The continent now accounts for 74% of global mobile money transaction volume, processing more than $1.1 trillion across 1.1 billion accounts in 2024. Yet more than 90% of that money is still withdrawn as cash the moment it lands. Digital rails are being used not to circulate money electronically but to move physical currency around more efficiently. In Nigeria, a network of roughly 2 million point-of-sale agents across cities like Lagos has done exactly that: made cash distribution faster rather than making cash redundant.
The reasons are practical and personal. For a street vendor, accepting cash costs nothing and settles immediately. Accepting a digital payment means a 1% to 3% transaction fee and a baseline of digital literacy. In Ethiopia, users of the Telebirr mobile platform and the national Fayda digital ID system describe holding onto cash reserves because of system outages during late-night medical emergencies. Others avoid digital records altogether, worried that pooled family remittances will be read by authorities as taxable personal income. Trust, not access, is the sticking point.
The economic cost of all this lands hardest on small businesses. Across Sub-Saharan Africa, small and medium-sized enterprises make up about 80% of jobs and 90% of privately owned businesses, yet they receive only 5.4% of bank credit. Because so many of these businesses operate in cash, they build no transaction history that lenders can evaluate. Banks keep backing large corporations and government securities instead. The result is a $300 billion annual financing gap that quietly compounds, as Affinity's founder and CEO Tarek Mouganie put it, every single year.
The infrastructure Africa has built over the past decade is genuinely remarkable. The question the report leaves open is whether the continent can shift the everyday logic of commerce quickly enough to make that infrastructure matter.
Originally published by African Business.