The telecommunication companies (Telcos) registered an over-300,000 loss of mobile money subscribers in the month of April prior to implementation of the Electronic Transactions Levy (E-levy), Bank of Ghana data have shown.

According to the Summary of Economic and Financial data (May 2022), just ahead of implementing the E-levy in May, active mobile money subscribers saw a decline in April to 18.6 million from the 18.9 million recorded the previous month.

Furthermore, the mobile money industry lost 4,000 active agents, as their number declined to 454,000 in April from the previous month’s 458,000. All these also reflected in the value of transactions, which dropped by GH¢2.8billion within the period under discussion.

Again, the volumes were also not left out of the equation, as the data shows total number of mobile money transactions declined by 10 million – from 413 million in April to 403 million in March. All these indicate the direction of the public’s sentiment toward implementation of the levy.

Asked about his comments on this development at a press conference during the announcement of a new policy rate, Governor of the Bank of Ghana Dr. Ernest Addison said it is too early to ascertain the real impact of the E-levy on the economy. “I think it is too early to say anything on this mobile money issue. The statistics are really for just a few weeks, I believe,” he said.

MTN’s share price falls

Meanwhile, happenings on the Ghana Stock Exchange show that the mobile money industry market leader, MTN, has seen its share price fall in May following implementation of the new tax.

Historically responsible for about 80 percent of trades on the market, the technology stock has lost 18.9 percent off its year-beginning price valuation of GH¢1.11 and currently ranks at number 32 on the Ghana Stock Exchange (GSE) in terms of year-to-date (YTD) performance.

The drop is consistent with a slump beginning about six months ago – around the levy’s announcement in November 2021 – and has had the stock lose 29 percent of its value in that period. This is especially concerning as the stock lost 10 percent of value over the last four weeks before mid-May.

Consequently, the GSE’s benchmark Composite Index (GSE-CI) – which gives a measure of the entire market’s performance – has dropped by 8.16 percent YTD: beginning the third week of May at circa 2,561.83 points.

Offering thoughts on the subject, market analyst with Apakan Securities Limited, Edem Nickolas Kporku, said while the full scale of the impact is yet to be ascertained, the telco stock’s performance over the past few weeks point to investor reaction to the levy.

“I think it has affected MTN a lot. Implementation of the E-levy will affect MTN’s MoMo collections as people will stop using MoMo to avoid the tax… We saw some declines in MTN share prices about a couple of weeks after passage of the E-levy. In the past week, we saw another sharp decline in MTN price to below GH¢1 per share after expiration of the ex-dividend date,” he explained in an earlier interview with the B&FT.