Poverty Reduction, Economic Growth, and Mobile Money Proliferation in Ghana

Abstract

The study analysed the impact of poverty reduction, economic growth, on proliferation of mobile money in Ghana. Using data from the world development indicators and factor analysis, an index measuring mobile money, economic growth, and poverty reduction in Ghana was developed. The data ranged from 1980 to 2021, and a convenience sampling method was used to select the series from world development indicators (WDI) and indexes created to measure the primary variables. The Johansen cointegration method revealed that cointegration exists between the variables, indicating that the variables have long-term relationships. The results of Vector error correction indicated that there is both a long-term and a short-term relationship between the proliferation of mobile money, economic growth, and poverty reduction in Ghana. The findings indicated the existence of a short-term relationship between the variables. Granger causality test also confirmed that mobile money proliferation, economic growth, and poverty reduction in Ghana have a short-run causal relationship. Given the significant role that mobile money service plays in Ghana's economic growth, the study concluded that policymakers in Ghana would do well to pay attention to mobile money service. In order to reduce mobile money and cyber fraud, policymakers are also encouraged to make mobile money and banking services accessible, including financial literacy education, and to strengthen internal controls. Future research could examine the relationship between the proliferation of mobile money, credit assessment, employment, and investment in Africa.