What role does mobile money play in initial public offerings (IPOs) in Ghana?
SELORM ADADEVOH: IPOs have historically been seen as available only to high-market consumers. The challenge has been to democratise IPOs and encourage activity on the exchange. Considering the usage of financial instruments in Ghana today, one of the most popular is government Treasury bills. To purchase these a person has to go to the bank and have an account, meaning these transactions are limited to banked citizens and exclude an overwhelming majority of the population.
Mobile money is changing this ecosystem and helping encourage participation in financial markets. Using this technology to go public has proven that if it is easier for people to participate, the enthusiasm is there. Mobile money not only allows non-banked customers to be included in theory, it increases access by being simple enough for people to interface with. The price point is also important. The accumulation of multiple small transactions helps investors compound their small sums to a scale where a return can be significant.
Looking abroad, mobile money in East Africa is used for tax payments, tax rebates, Customs and more – the applicability is very broad. However, the use of mobile money in the stock exchange is a unique case that has not been previously considered. The mobile money IPO opened up the stock market to many more Ghanaians, and it will become an obvious and perhaps necessary option for firms going public in the future.
To what extent is Ghana adopting emerging technologies?
ADADEVOH: Emerging technology such as advanced data analytics and artificial intelligence has not yet had a major impact on the ground in Ghana, but I believe it will. Many firms are looking at technology to enhance business. If one observes the competitive landscape of many sectors – take banking, for example – you will see a level of maturity reached whereby the products or services on offer are not particularly differentiated. Within this tight space the locus of competition becomes notions such as speed, efficiency, customisation and agility, all areas where emerging technologies can be applied to great effect. Currently, most medium- and large-sized firms in Ghana have some degree of operations dedicated to exploring new technologies and their application to business, but we remain at the start of this journey.
It is equally important to grow the infrastructural base that allows this technology to flourish. There is a lot of opportunity to expand the fibre-optic network; the number of homes connected is still very low. However, fibre is an expensive technology to deploy to every single home, especially for the last mile. In this market what the average customer can afford for these products is much lower than elsewhere in the world, hence the economic case cannot always be made for fibre. There are other services, of course, that can deliver broadband services at a low cost to every home, but consumer demand is changing, and broadband will not be sufficient in the long term. Even refrigerators have some form of connectivity now, and this is driving increased data use. In tomorrow’s world data consumption will rise exponentially, and fibre is the only technology we have at the moment that can scale to meet this – the only limitation is the economics.
How can Ghana bridge the digital divide in rural parts of the country?
ADADEVOH: The majority of internet usage in the country is done through mobile devices. Unfortunately, in rural areas the number of data-capable devices is very low. The business case for expanding the data network is poor without this penetration; it is difficult to invest in rural areas when there is a device constraint, even if it costs about the same to deliver data to rural towns as it does to urban cities.
As an example of how we might solve this issue, Kenya, through deals with international bandwidth firms, managed to reduce the cost per MB of international data so that the data could be sold for much cheaper. The retail cost of data in Ghana is low, but what households can afford is also low, and this is an important balance to keep in mind. If we can get the cost of data down further we will see consumption rise and the uptake of data-capable devices increase. 4G is markedly less expensive than 3G, thus the cost to deliver the data is decreasing, and we expect this trend to continue with 5G in the future.