Kenya Unveils World’s First Mobile-Only Government Bond Program

Building on the success of its Mobile Money platform, a product of Kenya’s largest telecom company, the government is charting new territory with a pioneering mobile-only government bond initiative. As per a press release from the Treasury office, Kenyans will soon be able to buy these bonds directly from their mobile devices, marking this as the world’s first mobile-only government bond.

This innovative offering is referred to as the M-Akiba Infrastructure Bond (“akiba” denotes savings in Swahili). The Cabinet Secretary elaborated that Kenyans could buy bonds ranging from a minimum of Kshs.3, 000 ($30/14,000 Nigerian Naira approximately) up to a daily maximum of Kshs.140, 000. The opportunity to invest additional amounts is open until the close of the bond issue or when the overall targeted amount has been realized.

Mrs. Rose Mambo, the Chief Executive Officer of the Central Depository and Settlement Corporation, shared her enthusiasm for the new product. She articulated, “The upside potential of a product like M-Akiba and the impact it is likely to have on increasing the number of investors in the market is significant.” According to her, not only will this initiative allow ordinary Kenyans to partake in the capital markets easily and affordably, but it will also offer them a profitable return on their savings.

The process for investing in the upcoming Kshs.5 billion “Save Money, Make Money, Build Kenya” bond is relatively simple. As instructed by Mr. Rotich, potential customers will only need to have a valid ID, dial *889#, and follow the guided prompts. Upon the bond’s maturity, the principal amount and coupons (interest earned from the bond) will be remunerated through M-PESA, the mobile payment service.

“The M-Akiba bond is an infrastructure bond, and the funds raised will be utilized to finance ongoing and new infrastructure projects in domains such as roads, energy, water, and telecommunications. I, therefore, urge all Kenyans to participate in saving through this product as they will not only be saving but also aiding in building the nation, financing development projects that will enhance their standard of living,” added Mr. Rotich.

The inception of this initiative is focused on providing the average Kenyans, familiar with mobile money operations owing to the success of Mpesa, with a platform to buy government bonds necessary for financing national budget. Last year, the International Monetary Fund (IMF) urged Kenya to address its growing budget deficit issue, which escalated to about 9.6 percent of GDP in 2016, up by 2.4 percent since the previous year. The Kenyan government now plans to borrow approximately $1.5 billion externally this year to fund projects and, in addition, intends to raise money domestically to bridge some of the budget deficit.

By introducing such a game-changing initiative through a well-established platform like Mpesa, the government aims to empower Kenyans across all socio-economic segments to invest in their individual and national future.

Furthermore, it’s worth mentioning that Kenya is among the best performing tech nations in Africa. As of 2016, the nation’s population of 47 million boasted of approximately 31.1 million connected netizens, indicating the vast majority of the populace is connected to the internet. This expanding digital breadth has caught the attention of global tech giants, as evidenced by Facebook CEO Mark Zuckerberg’s visit to Kenya, among other African nations, last year. Other renowned entities such as Google and IBM too have vested business interests in the country.