At the heart of every country’s development lies the economic empowerment of its citizens. This includes ensuring that every citizen has equal access to opportunities within the financial sector—opportunities to understand how finance works, how to save, how to access credit, and, most importantly, how to manage financial shocks.

This is why countries and development agencies set goals and implement policies aimed at bringing more people into the formal financial sector. When individuals are formally recognized as "banked," they gain eligibility for credit and other financial services.

Ghana has made a lot of progress in integrating unbanked and underbanked individuals into the formal financial system. At the National Financial Inclusion Forum held in 2024, it was reported that Ghana’s financial inclusion rate had grown impressively.

This progress has been largely attributed to advancements in digital payments infrastructure, the burgeoning mobile money market, and strategic partnerships between regulatory authorities, banks, mobile money operators, and fintech providers.

Policy frameworks such as the National Financial Inclusion and Development Strategy (NFIDS; 2018–2023), the Payment Systems and Services Act, and the Digital Payments Roadmap (DPR) have cemented the government’s commitment to expanding financial inclusion.

However, the introduction of the E-Levy in 2022, in my opinion, nearly derailed Ghana’s efforts. A 2023 GSMA report provides an account of the levy’s effects on the adoption and use of mobile money post implementation.

According to the report, mobile money transaction volumes saw a significant decline following the levy’s implementation. Many users—particularly low-income earners—shifted back to cash transactions to avoid the additional costs. Some key findings from the report include:

1. Mobile money agents reported a 22% drop in transaction volumes within the first three months of the levy’s introduction.

2. Individuals earning less than GHS 1,000 per month reverted to cash for everyday expenses such as market purchases, utility payments, and school fees, citing the tax burden as unaffordable.

3. Cash-out transactions increased in both volume and value, clearly undermining the country’s drive toward a cash-lite economy.

The E-Levy also created challenges for small businesses not registered with the Ghana Revenue Authority (GRA). Customers making payments to these businesses were taxed, discouraging transactions with small and medium-scale enterprises, particularly if they were not tax compliant.

Beyond the GSMA report, other studies have drawn similar conclusions about the levy’s impact, including its failure to meet the government’s revenue projections.

Almost three years after its introduction, Ghanaians have adapted to the levy. However, its impact on transaction volumes and values remains significant. The implications go beyond the financial burden on users—it erodes confidence in digital financial services, which are the primary channels driving financial inclusion.

It is not uncommon for individuals and businesses to refuse mobile money payments when the payer is unwilling to cover the withdrawal charges. Tax avoidance mechanisms, such as cashing out transactions through intermediaries, became—and remain—common practices.

Introducing the E-Levy, in addition to existing transaction charges, made digital transactions more expensive. This fueled the perception that digital payment platforms are costly, making cash transactions seem cheaper and more practical. Unfortunately, in an era where digital payments are being championed as a pathway to a cash-lite economy, creating the impression that "digital is expensive" is counterproductive.

It was, therefore, unsurprising when the removal of the E-Levy became a key issue in the manifestos of political parties during the 2024 elections. Many Ghanaians, myself included, are looking forward to its removal.

While we may have adapted, the daily financial strain it imposes—particularly during high-value transactions—remains palpable. For industry players, its removal will do more than boost transaction volumes; it will restore confidence in digital financial services.

The removal of the E-Levy will not merely be a policy reversal—it will be an important step in rebuilding trust in digital financial products like mobile money. By reducing the financial burden on users, it will encourage broader adoption of digital payments.

Additionally, eliminating the E-Levy will remove the cost barrier that pushed many Ghanaians back to cash transactions. This will encourage a return to mobile money platforms and boost digital payment adoption across all income levels.

Affordable digital transactions will also help small businesses, particularly those in the informal sector, integrate more fully into the digital economy. Customers will be more inclined to make electronic payments to these businesses without fear of incurring additional taxes.

Low-income earners, who are the primary focus of financial inclusion initiatives, will also benefit significantly. While there was an exemption for the first GHS 100 in transactions, it was limiting, as many low-income earners resorted to cashing out after reaching the threshold.

The ultimate goal of digital payments is to prevent transactions from ending in cash-outs, especially if we are striving for behavioral change and a cash-lite economy.

It is important that policy directions aimed at generating revenue do not compromise the country’s financial inclusion gains. Like many Ghanaians, I eagerly await the removal of the E-Levy—not only for the financial relief it will provide but also for its potential to increase the transaction volumes and values of digital payments. The more people use digital options, the easier it becomes for industry players to optimize costs for customers.