M-Pesa Recorded A 17% Drop In Transaction Value In 2024 As The Kenyan Economy Officially Enters A Steep Recession

M-Pesa, long hailed as Kenya’s pride and a global model for mobile money innovation, is flashing urgent warning signs—and nobody in power seems to be listening. The latest figures reveal a painful truth: mobile money transactions are falling, not due to technological shifts or innovation fatigue, but because Kenyans quite literally don’t have money to move. This isn’t a fintech hiccup. It’s the sound of a collapsing economy.

Recent Central Bank of Kenya data cited by Semafor shows mobile money usage is stagnating and falling in key metrics. In 2023, transactions hit KES 7.95 trillion. But despite the headline number, field reports now show a retreat from M-Pesa, with small traders and citizens abandoning it en masse to avoid punishing transaction costs and intrusive tax surveillance. When digital cash disappears from circulation, it’s not efficiency—it’s desperation.

The Kenya Revenue Authority’s decision to deploy 1,400 field officers to hunt down mobile money users—many of them informal traders—has backfired spectacularly. Instead of expanding the tax base, it has scared people away from formal finance entirely. When citizens begin to fear their money trails, governance has failed catastrophically. Instead of plugging budget holes, the government is choking the very lifelines that keep economic activity alive.

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Let’s talk numbers again. Merchants using “Lipa na M-Pesa” are charged up to 0.55% per transaction. This might seem minimal in boardroom presentations, but on the dusty streets of Gikomba or Mukuru, it’s unsustainable. Add the cost of sending salaries, restocking goods, or withdrawing cash, and the real-world burden becomes unbearable. Mobile money was once about convenience; now it’s become a trap.

The impact is devastating. Traders are going back to cash, not because they want to, but because they have to. M-Pesa had over 30 million active users as of March 2023, and more than 600,000 merchant partners. But now, many of these merchants are silent, disconnected from the system. When the engine of everyday commerce begins to sputter, it is not a tech problem—it’s an economic catastrophe.

We are witnessing a quiet recession playing out in real time. Forget GDP jargon—the true indicator is this: Kenyans are transacting less, saving less, consuming less, and fearing more. And mobile money, once the heartbeat of everyday life, is flatlining. That is not just bad news for Safaricom; it’s a national crisis.

The government’s failure to cushion citizens from inflation, rising fuel costs, and oppressive taxation is now triggering second-order consequences in the digital economy. Even with mobile money’s popularity, if Kenyans have nothing left to send or spend, the entire system stalls. And when that happens, the country is no longer just broke—it is broken.

President Ruto’s administration cannot continue ignoring these warning signs. Economic policy cannot be reduced to digital slogans and tax aggression. The real test of leadership is whether citizens feel safe, secure, and able to survive. Right now, they don’t.

This isn’t just about M-Pesa. It’s about survival. And unless something is done urgently—unless the government steps away from punitive financial policies and begins to address the real cost of living, Kenya may soon face a financial collapse far more dangerous than the numbers admit.

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