Our Correspondence, Dakar
Senegal stands on the edge of a policy failure that could reshape its economic future for the worse.
The newly introduced tax on mobile money transfers has already generated a wave of confusion, frustration, and public backlash, and for good reason.
Every day brings new signs that this measure may undermine the very foundation of Senegal’s digital progress.
Mobile money is not a luxury in Senegal; it is the nation's financial bloodstream. More than ninety percent of adults use digital wallets to pay bills, send support to family, run microbusinesses, manage emergencies, and navigate daily life.
By taxing transfers, the government has chosen to tax the most frequent, most essential, and most vulnerable financial activities in the country.
Lower-income households rely on small repetitive transfers that now risk being taxed each time the same money circulates through a family or community.
The consequences will be felt immediately. Once digital transactions become more expensive, people revert to cash; it is a natural reaction and a dangerous one.
Cash invites opacity, it accelerates inefficiency, it reopens channels for corruption, and disrupts every effort made to modernize the Senegalese economy.
The digital revolution pushed the country forward, and this tax pulls it backward.
The economic impact is equally troubling. Youth employment is heavily tied to mobile money agent networks, as these networks depend entirely on transaction volumes.
Reduced digital usage means reduced commissions and shrinking income for thousands of young people.
Informal merchants, who shifted to digital payments for safety and convenience, now face a forced return to outdated and more secure ways of doing business.
Public service modernization also stands at risk. Digitized payments for electricity, water, transport, education, and health depend on high community engagement.
Families who see their digital expenses increase will quickly return to physical payment points. This not only slows service delivery but also reintroduces leakages and inefficiencies that digitalization was designed to eliminate.
The remittance lifeline will suffer too. Although international transfers are exempt, the moment those funds begin circulating inside the country, they are affected by the tax.
Remittances support basic household needs. Taxing the flows that manage those funds weakens one of Senegal’s most reliable social safety nets.
Perhaps the most glaring contradiction is the fiscal promise attached to the tax. Similar measures across Africa failed to raise the revenue governments expected because digital usage dropped.
Senegal’s tax is likely to follow the same path. Digital taxes shrink the tax base instead of expanding it.
At a time when Senegal is striving to build a strong, transparent, and innovative digital economy, this reform threatens to carve out the core of that progress. The country now faces a crucial choice.
It can push forward with a measure that sacrifices inclusion and digital trust, or it can choose smarter fiscal tools that preserve the gains of the past decade. The world is watching to see which direction it will take.