Effect of Mobile Money on Economic Growth within Select East African Community Countries

Abstract

This paper analyzes how economic growth within select countries in the East African Community (EAC) is affected by mobile money. The analysis leverages on annual panel data from Uganda, Tanzania, and Kenya from 2009 to 2021. Static panel regression techniques- random effects, fixed effects, and the pooled ordinary least squares- is employed. Economic growth significantly rises in modest inflation rate, and the real rate of interest, but significantly declines in the value of mobile money transactions. To reverse the negative effect of mobile money, it is crucial for governments within EAC to invest in human capital accumulation. To further revitalize growth, price stability must be maintained within 2-7% inflation rate whereas real rate of interest has to be maintained within the confines of the Taylor rule.