Sponsored by International Currency Association and CashEssentials, The African Cash Report 2018 was published by Calleo, an independent marketing firm.
Due to the size of the African continent – 1.2 billion people spread over 54 countries – it is difficult to identify a common cash trend. Nevertheless, the report focuses on the challenges facing six African countries with regards to cash: Angola, Morocco, Namibia, Nigeria, South Africa and Zambia.
The common denominator that was identified across the board was the growing value of cash in circulation. The main factors stimulating this tendency are observed to be GDP growth, economic factors, cross border usage, ATM network growth and financial inclusion. In addition, the reduction of poverty and income inequality were placed in direct correlation with cash growth in Africa.
Source: World Bank, Central Banks
For the purpose of the study, countries were split into several groups. In the first group, Namibia and South Africa have similar levels of banking penetration, GDP per capita and number of banknotes per person. However, due to population size, the number of notes in circulation and the economic situation in South Africa largely exceed those of Namibia.
For the second, Nigeria and Zambia were grouped. Though both countries had very low GDP per capita and similar cash-in-circulation to GDP ratios, population sizes greatly vary, explaining Nigeria’s bigger volume of banknotes.
And in the third group were Angola and Morocco. Both have a much higher cash-in-circulation to GDP ratio compared to the other four countries and have a GDP per capita that is lower than the first group, but higher than the second.
The African continent is highly reliant on cash for a number of different reasons, but mainly due to low banking penetration and a widespread informal economy. The study expects cash usage to grow in the region despite the appearance of alternative payment methods, which will probably contribute to cash growth as well.