With 37 percent of the value of all payments now made digitally, Ghana is on course to becoming a leader in the sub-Saharan region, with great potential to expanding economic opportunities for businesses, a UN Report has said.

At an event bringing together key government and business players, Ghana’s Ministry of Finance and the UN-based Better Than Cash Alliance released a report documenting the country’s progress in creating an economy where everyone can pay and get paid digitally, instead of cash.

The results show the country has made significant gains, including almost 100 percent of government payments to people and payments within the government now processed digitally. The findings also reveal there are opportunities for providing more choice to customers.

This move is already translating into direct benefits to people, particularly women, support for small businesses and cost savings for the government. The data also predicts that if the government continues to make progress, savings could reach over GHS 250 million (nearly $60 million) each year, which may result in more than GHS1 billion ($230 million) by 2020.

“The future really is digitisation and how we can leverage on it for the benefit of our citizens. This is why digitising initiatives such as our flagship conditional cash transfer program Livelihood Empowerment Against Poverty (LEAP) is a key milestone,” said Ken Ofori-Atta, Ghana’s Minister of Finance.

“We recognise that there is still more work to do to transition most of the country away from cash. Yet with great potential for cost savings and opportunities to increase transparency and accountability, we cannot afford not to,” the Minister added.

The report provides key insights on the status of digital payments in Ghana and tangible recommendations on how to successfully move forward. In particular, three priorities emerged to help the government and citizens achieve the most benefits:

Investing in infrastructure for digital public utility payments: 80 percent of the population uses public essential services such as water and electricity, but only 20 percent of the population has access to digital technology such as smart meters. By investing in smart distribution infrastructure that digitise end-to-end delivery and payment, it will increase efficiencies and ease of use for citizens – ultimately increasing adoption.

Digitising payment of government fees and fines: With 97 percent of fees and fines currently paid in cash, the Ghanaian government could gain enormous cost savings if they commit to using digital payments exclusively and mandate all government agencies to use a central payment system.

Encouraging digital payments in the Fast-Moving Consumer Goods (FMCG) value chain to support digitisation of small retailers and customers: For FMCG companies operating in Ghana, 96 percent of distributor payments and 59 percent of vendor and employee payments in volume are made in checks. However, 99.9 percent of individual payments for consumption goods by volume are still completed in cash, as individuals continue to purchase essential consumer goods, including food, in the informal economy with small retailers. This indicates the tremendous potential impact any shift to digital payments in this value chain can have on the overall ecosystem. By transitioning away from cash, small business owners can avoid storing large amounts of cash, drive customers’ adoption and boost access to formal saving and loan products which can expand their economic potential. This will especially improve the lives of women, who represent many of the small retailers in the FMCG sector.

“We want to congratulate the Government of Ghana for its leadership in building the foundation for an economy less dependent on cash. Under this leadership, the country is making considerable strides to improve transparency, accelerate opportunities for economic growth and empower women by bringing them into the formal financial system,” said Dr. Ruth Goodwin-Groen, Managing Director of the Better Than Cash Alliance. “Ghana is at a tipping point in its shift to digital payments. We at the Better Than Cash Alliance look forward to continued work with our colleagues across the digital ecosystem in government, companies and international organisations to continue this great progress.”

Below is the summary of the diagnostic report and attached to this story in PDF format is the full report:

Building an Inclusive Digital Payments Ecosystem: The Way Forward

This Diagnostic Report shows Ghana has taken important steps toward digitising its economy, and has several of the building blocks of an inclusive digital ecosystem already in place.

Importantly, the Ghanaian government is leading by example in digitising many of its own payments and continuously improving the regulatory environment. Large businesses are also taking positive steps. Even so, Ghana remains at the initial stages of its digitisation journey, with cash still prevalent in many parts of the economy.

A number of key barriers must be overcome if the country is to drive forward its digitisation agenda.

This Report assesses Ghana’s progress to date, and sets out specific policy recommendations that can accelerate Ghana’s journey toward a more digital economy. The report draws on a fast-growing body of knowledge about success factors in similar markets. It also examines three areas of specific focus – government fees and fines, public utility payments, and the fast-moving consumer goods sector – where digitisation can have particularly powerful impacts.

Realising the potential gains offered by digitisation will help expand financial inclusion, boost government revenues, and drive new economic opportunities for Ghanaian individuals and businesses. In doing so, greater digital payments can significantly strengthen Ghana’s economy and society, now and for generations to come.