March 30, 2017
I am very pleased to join you this morning for the launch of Malawi’s Government Payments Roadmap. The work you are beginning today is more than using electronic transfers to pay civil servants. Your work is to empower every Malawian through greater access to digital financial services. Your work has the potential to improve the livelihood of Malawians, reduce corruption, and unlock the power of the private sector to make a more healthy and prosperous Malawi.
Since 2012, the U.S. Government through the U.S. Agency for International Development (USAID) has supported the United Nations Capital Development Fund to foster greater digital financial services for Malawi. Thanks to hard work of many development partners, we have developed a solid foundation for expanding services. The private sector, in partnership with the government, can now lead Malawi’s quest for greater digital financial services.
This morning, I will address three key points.
My first point: Malawians, with leadership from the private sector, can benefit from expanded access to digital financial services.
- The un-banked will benefit by having access to bank accounts with savings, loans, and basic money management tools. This access will help Malawians manage economic shocks and better plan for the future.
- Women will benefit by having more power over family finances. Studies show that when women have more control of family finances – families thrive.
- Taxpayers benefit from better public services. When governments can expand tax collections through electronic payments – public works like school, hospital, road, electricity and water projects can flourish.
My second point: We must resolve the most crucial challenges facing digital financial services through public-private partnerships. As I read the Roadmap last week, a few critical challenges caught my eye.
- Cell phones, digital infrastructure banks and ATMs all need reliable power to thrive. Without a rapid expansion of on-grid and off-grid electricity, digital financial services will stagnate. The U.S. Government’s Millennium Challenge Corporation and Public-Private Partnerships like Power Africa will continue to work with the government of Malawi to expand electricity access for all Malawians.
- The issue of interoperability must be resolved. A level playing field for all qualified market participants will encourage fair competition, spur innovation, and encourage affordable transaction fees. The government of Malawi should consider opening the “National Switch Limited” to qualified, private sector providers like Airtel Money, TNM Mpanda, and Zoona.
- Malawians must become financially literate for digital financial services to prosper. When Malawians understand the power of savings to survive economic shocks, to feed their families during lean seasons, to start small businesses, to better afford school fees for their children – they will rush to use digital financial services. I am hopeful that the private sector can take a greater role educating their current and future customers. It is a win for service providers. It is a win for Malawi.
My third point: The government of Malawi should quickly enact clear regulatory reforms to protect vulnerable consumers. In the long-term, a clear regulatory framework will help businesses grow while attracting much needed foreign investments in the telecommunications and financial service sectors. To achieve this, I encourage the government of Malawi to consider the following actions:
- Enact transparent regulations across the telecommunications and financial sectors to ensure the safety and security of electronic financial transactions. A successful regulatory framework will mitigate fraud, combat money laundering, and reduce opportunities for identity theft.
- Provide strong regulatory oversight to protect consumers from unreasonable transaction fees; to protect consumers from the loss of stored credit; and to protect the market from corruption, fraud and money-laundering.
- Create a regulatory framework with clear and transparent rules to attract direct foreign investment and unleash the power of Public-Private Partnerships. This, of course, is of particular interest to the United States. Expanding commercial opportunities for American businesses can benefit both Malawi and the United States.
In closing, I encourage you to consider three actions:
- Leverage the resources of the private sector to provide digital financial services to all Malawians;
- Solve the most crucial challenges facing digital financial services through public-private partnerships; and
- Enact clear regulatory reforms to protect vulnerable consumers and attract foreign investments.
Distinguished colleagues, the implementation of this wonderful roadmap begins today. Tap the power of the private sector to transform this Roadmap into reality. The U.S. Government applauds your efforts to create a healthy and prosperous Malawi.