DigiFI Africa’s new blog series: The various facets of digital IDs and payments
As of 2019, 469 million people across sub-Saharan Africa used mobile money. In 2019 alone, 50 million sub-Saharan Africans created a new mobile-money account, a 12 percent increase from 2018. Across Africa, governments are exploring new ways of digitizing financial services and identification to reform policies. While there is a big push to go digital, our knowledge of its potential impacts are limited, particularly in the African context. These reforms may have transformative impacts for citizens through improved governance and public service delivery. But they also have the power to exclude marginalized groups or violate privacy rights.
The Digital Identification and Finance Initiative (DigiFI) in Africa aims to generate rigorous evidence on the impacts of these technologies for both governments and citizens in sub-Saharan Africa. For example: How should digital identification (ID) systems be designed to maximize benefits while minimizing costs in a specific context? When is it appropriate to link a social protection program to a digital ID system? To what extent can digital ID systems and digital payments reduce leakages and improve targeting of social protection programs? Can digital ID systems and digital payments assist in building incentive systems to motivate public servants? For more information on DigiFI Africa’s research agenda, please see our framing paper.
We are excited to launch a further exploration of these questions in DigiFI Africa’s new blog series. Over two months, this series will unpack key policy questions on digital ID and payments systems while also exploring a subset of the academic literature provided in our framing paper. This series includes posts on:
- The benefits, challenges, and unknown impacts of digital IDs,
- Digitization of government-to-person payments,
- Mobile money and person-to-person payments, and
- Possible barriers to effective public service delivery (e.g. targeting, leakages, incentives, and take-up) and opportunities for digitization to improve these processes.
You can read about DigiFI’s ongoing studies. These include, but are not limited to, research on the impacts of linking the national biometric ID system in Kenya to social protection schemes, the relationship between digital IDs and poverty alleviation in Malawi, how digital tax systems can aid revenue collection in Uganda, and the role of digital cash transfers in responding to the COVID-19 pandemic in Ghana and Kenya.
If you’re a policymaker or researcher thinking about the design of a digital financial or ID system or evaluating new reforms in the DigiFI research agenda, we encourage you to get in touch! We can be found on [email protected] and would love to hear from you.