USAID/Liberia Governance & Economic Management Support Project (USAID-GEMS)
USAID-GEMS Supports Mobile Money Pilot Program for GOL Salary Payment
USAID-GEMS has pursued, among its five main objectives, the provision of capacity development support to enable the GOL to establish and utilize a national payment system in line with international and regional standards. Such a payment system would enable accurate and timely processing and reconciliation of GOL payments to vendors and civil servants, utilizing mobile technologies where feasible.
A shortage of financial services and institutions outside of the main cities of Liberia means that each month some government employees travel to great distances to pick up their salary in cash. This movement of government workers disrupts services and productivity as rural teachers, healthcare workers, military and police leave their workplace and communities in order to collect their pay. During the rainy season, the lack of transportation and impassable roads increase the length of time and the physical challenges of travelling over long distances.
To address this problem, USAID-GEMS advisors providing technical assistance to the Ministry of Finance (MOF) have developed, in collaboration with the MOF, a strategy for piloting the transfer of government employee salaries directly to workers via cell-phone based ‘mobile money’ payments.
Employed successfully in multiple countries in East and Southern Africa with impressive cost-savings and convenience benefits to governments and citizens, mobile money works with a transit account on an individual phone that can send funds through SMS technology for goods and services, or can be exchanged for cash from participating telephone companies or business agents. Individuals can also receive deposits through the financial system, the telephone company or another individual’s mobile money account. USAID GEMS and the MOF are partnering to deploy this innovative technology in Liberia, as one of the first countries in West Africa.
As part of the planning and design phase, USAID-GEMS has conducted five focus group discussions in the Buchanan and ELWA communities to obtain the opinions of teachers, firemen and policemen on the topics of government payments, bank services and mobile money. Enthusiasm for the scheme among focus group participants was substantial, bolstering support for rapid implementation of this innovative initiative.
Arrangements have been made with Lonestar, Ecobank, LBDI, International Bank as well as elementary and high school teachers to participate in the mobile money pilot program for salary payment. Based on the successful pilot test of this technology, expanded use of this technology can bring substantial benefits of reduced gaps in service delivery resulting from people leaving their posts to access their salaries, and reduced transportation and transactional costs to not only hundreds of thousands of GoL employees but to large segments of the Liberian population as a whole as well.
USAID-GEMS is in discussion with the MOF Department of Revenue (DoR) to pilot the collection of tax revenues via mobile money.
In addition to technical assistance, USAID-GEMS will provide a short-term advisor to assist the DoR to develop an interface between ASYCUDA (customs system) and TAS (tax system) to facilitate payment and data sharing between the two systems. This will facilitate the direct transfer of revenues from the commercial banks to the revenue agency on the same day.