FT Insight December 2015

Tech Talk
continued
Tech Talk
Our cash-based economy hinders the achievement of these objectives. In Sierra Leone without cash in your
wallet you cannot buy fuel, groceries, eat out or even get medical attention in hospitals. Although cash
economies are highly liquid and well understood, they also facilitate corruption and bribery simply because
cash doesn’t leave any audit trail. For the individual as well as businesses cash is simply inefficient, costly and a
security risk. For the government it creates much more serious issues like identity and reputation management,
debt enforcement, credit scoring and access to financial products like insurance and even savings.
Taking advantage of technology to fast track the development of a robust financial services infrastructure, the
Bank of Sierra Leone will soon be supporting consumers and businesses in Sierra Leone with a National Financial
Switch. This will connect all banks, ATMs, e-commerce and Point of Sale (POS) terminals throughout the country
and drive the use of electronic payments on domestic and international fronts. Expected to be up and running
before the end of 2016 the platform will embrace all sectors of the economy including employers, employees,
merchants, banks, the government and its agencies.
A National Financial Switch is probably one of the most important building blocks for growth as it will allow the
implementation of a wide range of services around electronic payments – most of which are prerequisites for a
stable environment for investment.
Those who use cards to pay in other countries may be excused for thinking that paying by card, or online is
nothing special, but it is a major step forward for Sierra Leone. A National Switch will create a unified financial
network which will allow visitors and locals alike to pay by credit card in shops, restaurants, hotels and more
widely; it will also allow local electronic transactions through a local debit card and this is where it gets
interesting.
This infrastructure will usher in an era of greater transparency and a significant reduction in fraud and corruption.
Employers will be able to pay their staff electronically knowing that their employees will be able to use their
cards in shops and ATM’s throughout the country. E-commerce will bring in the ability to develop new business
services around home delivery and online ordering for B2B. It will also integrate locally based businesses into the
international markets, allowing our business owners to make sales to anyone in the world. Mobile POS will allow
for remote payments of electricity, water and other utility bills; all improving efficiency, all making for a better
environment for growth and all reducing corruption. In short, the less cash is used or accepted, the more people
are pulled into the formal, taxpaying economy. It cuts delays and corruption and increases revenue.
LUMA TESTS SIERRA LEONE’S APPETITE FOR MOBILE APPS
Sierra Leone’s mobile phone use is escalating sharply and in its wake is a small but emerging mobile
app economy. One of the most innovative is Luma, which applies smart phone technology to Sierra
Leone’s street markets.
Luma is the brain child of local business owner Bimbola Carrol. He developed and launched the app
to encourage trade between individuals, and give them an easy way to generate cash by selling their
unwanted or unused items. “A Luma is a sort of mobile local market, popular in the provinces. If a
location is having a Luma, all the people in the surrounding towns and villages will bring items they
have for sale,” he explains.
In Q4 of 2012 the total number of mobile subscribers in Sierra Leone was approximately 3,504,000.
By 2015, the figure had increased by 30% to over 4,570,000 according to figures from GSMA
Intelligence, making the mobile app market one that has significant potential for growth. Mobile apps
aimed specifically at the Sierra Leonean user have focused mainly on mobile money or health – most
noticeably to support the recent Ebola response. Carrol’s offering is something different. Targeted at
18-45 smart phone users, he markets Luma via social media and using direct marketing. “Feedback
has been positive, but it needs continuous marketing,” he says. “It’s a great idea, but tech penetration
in Sierra Leone is still low. I imagine it will take about 24 months before it becomes a self-running
operation.”
For the moment listing on Luma is free, but in the future users will pay to list the items they have for
sale. Luma sales reps would also list items on behalf of trade and take a commission in the event of a
sale.
Luma is currently only for Android mobile phones. Available for download on Google Play.
FT
Insight
11
Taking it further, government payments will be able to be made electronically. Salaries, taxes, fees, social
security deductions and payments can all be done electronically, improving efficiency, improving tax collections,
reducing wastage and providing a solid anchor which both the local community and the incoming investment
community can trust for their payments and therefore focus on their core business. E-payment systems also
provide data and financial statistics which are crucial in making decisions regarding the economic development
of Sierra Leone.
And as the post-Ebola focus shifts back to the fundamentals of improving health services and education,
electricity and water supply, and creating jobs, it is important to note that a secure, reliable and efficient means
to pay for these goods and services will contribute to the success of many of these programmes.
The move to put in place a National Switch is a milestone in
the development of Sierra Leone. It demonstrates that the
Sierra Leonean banking sector will be ready for business and
playing a critical role in the resilience of the nation. It is a f irst
and crucial step towards a “cashless” society, the foundation
on which the country can grow commerce and reduce
corruption; and it establishes a platform for secure payments
in which local businesses, consumers and foreign investors
can have conf idence.
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