Namibia is exploring a CBDC to improve payments and financial inclusion, though the IMF advises caution. Additionally, Safaricom faces a lawsuit for alleged unfair contracts with dealers. The country’s telecom sector recorded substantial data revenue growth, signaling a move away from traditional voice services. Together, these developments reflect transformative efforts within Namibia’s financial and telecommunications landscapes.
Namibia is considering the launch of its Central Bank Digital Currency (CBDC) to enhance cross-border payments and promote financial inclusion. The Bank of Namibia (BoN) is still assessing whether a CBDC will effectively address the country’s payment issues. This initiative follows a recent technical assistance mission from the International Monetary Fund (IMF), which has advised caution regarding a full-scale rollout.
The IMF has expressed reservations about the necessity of a retail CBDC, recommending that the BoN first concentrate on improving existing payment infrastructure before venturing into digital currency complexities. Despite this advice, BoN is engaging in discussions with central banks in Eswatini, Lesotho, and South Africa to evaluate the potential efficiencies a CBDC might offer for cross-border transactions.
Namibia initially proposed the idea of a digital Namibian dollar in 2022 through a consultative paper on CBDCs, yet not much progress has occurred since. Notably, neighboring countries have experienced difficulties with their CBDC implementations, highlighting the need for a cautious approach, which BoN appears to be adopting while contemplating its next steps.
In other news, Safaricom faces legal action from Goodweek Inter-Services Limited, alleging the abuse of market power through unfair contract terms. This lawsuit has reached Kenya’s High Court and references Vodafone and Mobitelea Ventures as additional respondents. The dispute arose when Goodweek’s access to the dealer portal was revoked following its contract’s expiration amid accusations of unrealistic sales targets from Safaricom.
Goodweek claims that Safaricom’s demands were excessive, rendering it difficult to meet targets and justifying the diminished commission structures unreasonably. This case bears significance, as a ruling against Safaricom could instigate broader ramifications for its dealings with other agents across Kenya’s telecommunications market.
Moreover, Namibia’s telecom sector has achieved approximately N$800 million (equivalent to $43 million) in data revenue within the third quarter of 2024, a clear indication of the burgeoning significance of data services. Data revenue now constitutes nearly 70% of total mobile service earnings, reflecting a considerable shift from voice service dominance characterized a few years prior.
This evolution mirrors trends throughout Africa, where mobile internet revenue increasingly constitutes a vital segment for telecommunications. In response, Namibian telecom firms are investing heavily in infrastructure upgrades, aiming to bolster connectivity statewide. However, rural areas continue to experience significant connectivity challenges, necessitating innovative solutions to bridge the digital divide.
Namibia is also pursuing policies to simplify travel for international investors by instituting visas on arrival effective April 1, aiming to enhance business opportunities and economic engagement. In summary, Namibia is navigating essential financial and technological advancements while juxtaposing caution against the challenges it faces in implementing such frameworks.
Namibia’s exploration of a CBDC is met with cautious optimism as it aims to improve payment systems and financial inclusion. Meanwhile, Safaricom’s ongoing lawsuit with Goodweek raises concerns about fair dealings within Kenya’s telecom sector. Notably, Namibia’s telecom revenue highlights a significant shift towards data services, underscoring a robust growth trajectory in the sector. As challenges remain, strategic investments in infrastructure and policy reforms are imperative for sustained advancement in both digital currency endeavors and telecommunications.
Original Source: techpoint.africa
