survey respondents each reduced their use of momo by just 1%, then the total value or volume (depending on what you are measuring) would drop by just 0.8%. Not 80%.
What is important to note in this whole affair is that a service that was experiencing a growth rate of 140% in March 2021 today, because of E-levy, has seen a mind-boggling negative 13% decline.
See the graph attached here
The amount of wealth wiped away by e-Levy is stupendous. Especially if one also factors in inflation. What has happened is the total murder of an emerging industry.Â
A simple way to understand the wealth being destroyed by E-Levy that inflation factors somehow is to compare momo use in April 2021 to its use today using dollar values.
In April 2021, the total value of momo transactions amounted to about $15bn. Last month, June 2022, momo use fell to $9bn.
This is a 40% decline in real value that will radiate across the telecom networks, the agent network, and the fintech ecosystem! Because as the total value of transactions drops, so do fees and thus the revenues and profits of everyone in the industry.
They will spend less, meaning less activity in the economy and lower taxes overall. As some revert to cash, their cost of doing business increases, leading to broader inflation rises and even lower productivity. These are additional adverse impacts!
Such destruction of wealth creation in a country should not be toyed with through reckless propaganda.
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