TITLE:
Effect of Central Bank Policy Response to Promote Mobile Money Transactions in the Context of COVID-19: The West African Economic and Monetary Union (WAEMU) Case Study
AUTHORS:
Ibrahim Chaibou Oumarou
KEYWORDS:
Mobile Payments, Mobile Money, COVID-19, Policy Response, Financial Inclusion, Digital Financial Services, Countrefactual, WAEMU
JOURNAL NAME:
Theoretical Economics Letters,
Vol.12 No.2,
April
11,
2022
ABSTRACT: This article aims to contribute
to the literature on policy response to COVID-19 by doing a case study on the West African Economic and Monetary
Union (WAEMU) countries. It consists to analyze the effect of the policy
response adopted in 2020 by the Central Banque of West African States (CBWAS or
BCEAO) to promote mobile payments to limit the spread of COVID-19. The analysis
of the digital financial services (DFS) environment shows the need to make
efforts at the regulatory and institutional level in order to create a
favorable framework for the success of programs aimed to develop the use of
mobile money, and to take into account changing needs for innovation. The
region has made progress in terms of the use of mobile money, which benefits
financial inclusion of the populations. Using a counterfactual impact analysis,
we assessed the causal effect of this policy response on mobile money
transactions after its adoption, using the method called “difference in
differences”. This approach consists in capturing the quantitative effect of
this policy by comparing the situation after its implementation and “that which
would have prevailed in its absence”. The results showed that this policy has
led to an increase in mobile payments of more than 11% on average per month
after its adoption, which contributes to
strengthening the resilience of populations during the pandemic. The
study recommends emphasizing public awareness as part of the implementation of
programs, developing adequate policies on access to infrastructure of DFS and
accelerating the process of digital transformation in order to create favorable
conditions for the development of mobile payments.