In Tanzania, money moves on phones. Salaries land on handsets, market purchases ping between SIMs, school fees are paid via USSD, and remittances cross regions in seconds. Mobile money has become the country’s most important civic rail, cheaper than new highways, faster than new branches, more reliable than a queue at a counter. It did something extraordinary: it put formal finance into the hands of people who had never met a bank manager.
But the same rail that democratized finance can also become a friction point for extraction. When levies stack on fees and fees stack on cash-outs, the path that once lifted the smallest transactions becomes a toll road for the poorest users. When the state climbs onto the rail to collect without showing where the money goes, citizens do not feel modernization, they feel drained.
This is no longer a “tech” story. It is state–citizen plumbing. Phones can train wananchi, compliant payers who keep the rail moving, or grow raia, informed contributors who demand receipts with every debit to their future.
Wananchi hutumia simu kulipa; raia hutumia simu kudai risiti. Subjects use phones to pay; citizens use phones to demand receipts. The design choices we make now will decide what we produce.
The Tanzanian Footprint: What the Rail Looks Like
Over the course of a decade, agent networks expanded from bus stands to fishing villages to urban estates. M-Pesa, Tigo Pesa, Airtel Money, HaloPesa, and others stitched together an ecosystem where the kiosk, not the branch, is the default. Interoperability lowered the walls; a single handset became a wallet that could talk across networks.
Everyday life now runs on this rail:
- Merchant payments: Dukas and Mama Ntilie accept phone transfers instead of juggling change.
- Utilities: LUKU, water bills, and pay-TV are settled in seconds.
- Public payments: licenses, exam fees, traffic fines, and sometimes local levies route through the same channel.
- Household finance: savings pockets, micro-loans, layaway purchases, and instant remittances from city to village.
The state also meets with citizens there. Taxpayer registration and filing are available online; some assessments and penalties can be paid via mobile money; councils collect fees through short codes; and national programs disburse support in the same manner. For a considerable slice of the population, the first and most frequent interface with government is the handset.
That makes mobile money embedded governance. It isn’t just a private utility; it is the pipe through which obligations and rights flow. If the bill clearly presents the relevant law, the amount, the service standard, and the process for appeal, the rail teaches civic clarity. If it simply flashes “pay now” and hides the rulebook, it teaches obedience.
The rail also shifts costs. The bus fare to a district office becomes a data bundle. The line at the licensing desk becomes a “system busy” message. For many, those are gains. For others, low-end devices, patchy signals, and no NIDA match are new barriers with fewer human doors.
In short: this rail is where citizenship happens, or stalls.
Inclusion That Matters: How It Changed Daily Life
The inclusion dividend is real and personal. The risk of cash theft dropped when daily earnings were transferred from pocket to phone. Time, the scarcest asset for traders and farmers, was returned when payments no longer required travel or queues. Urban-to-rural remittances transitioned from bus envelopes into reliable lifelines; emergencies became solvable from a distance.
For women and micro-enterprises, the change was structural. A kiosk operator with a steady flow now has a transaction history, a primitive credit file that can unlock microloans. Informal groups digitized michezo ya akiba (savings cycles), reducing loss and increasing discipline. Market fees paid by phone created records that, in the right design, can prove a business exists when applying for a small grant or tender.
At the community level, phone-visible transactions reduced petty conflict. Families could track who sent what, when; cooperatives could reconcile contributions; schools could confirm fee payments without shaming children, small balances, yes, but considerable dignity.
The government benefited too. Collections became faster; leakages shrank where cash handling ended; local arrears decreased when payment became easier. In a practical sense, mobile money formalized the informal, not by forcing people into unfamiliar buildings, but by putting formal rails under the familiar rhythm of their lives.
But inclusion is fragile. It rests on pricing that doesn’t penalize the smallest transfers; on agent networks that provide cash when people need to cash out; on redress mechanisms that respond when things go wrong; on ID systems that don’t exclude the undocumented. If the rail becomes expensive, unreliable, or opaque, the very people it lifted first will be the first to step off.
Inclusion is not just access; it is affordable, understandable, reversible access. When those three hold, the rail teaches citizens to expect service, not favor.
When the Rail Becomes a Toll, The Levy Backlash
The 2021 mobile money levy was a national civics lesson written in debits and disbelief. Overnight, small, frequent transfers, the lifeblood of low-income users, carried new costs. People did the math: a few hundred shillings shaved from a two-thousand-shilling transfer is not a “minor” fee; it is a meal, a bus fare, an exam photocopy. Use dropped; workarounds multiplied; anger traveled the same rails the levy sought to tax.
Three truths emerged.
First, lifelines are not luxuries. A policy that treats low-value transfers as easily taxable misunderstands their role. The smallest transactions are often the most essential. They bind families and small firms to resilience. Tax them insensitively, and you tax resilience.
Second, citizens connect levies to services. People asked the right question: if we pay more, what improves where we live? When the answer is vague, levies feel like predation. When the answer is concrete, ward clinics restocked, school capitation fully funded, specific roads maintained, the same amount can feel like investment.
Third, process matters as much as price. Ex-ante impact analysis, public consultation, and phasing could have prevented the shock. The later adjustments acknowledged reality, but the message had landed: modern rails make it easy to collect at scale; they also make it easy for citizens to organize objections at scale.
The lesson is not “don’t tax phones.” It is design taxation like citizenship: protect low-value bands; disclose fees before a user confirms; show an official receipt with the legal basis; and map where the revenue goes in dashboards people can read. A levy coupled to a visible improvement is a bargain. A levy with no line of sight is a toll.
Kodi ya simu bila huduma iliyo wazi ni kichecheo cha hasira. A phone tax without visible service is a courier of anger.
Hidden Frictions & Unequal Burdens
Rails can look smooth from above and still be rough where feet touch. The first roughness is regressivity: when a fee, a levy, and a cash-out cost are applied to a small transfer, the effective rate on the poor is higher than on the rich. A 300 TSh total charge on 3,000 TSh is 10%; on 300,000 TSh it is 0.1%. Same rails, different pain.
Then the agent’s reality. Liquidity is a daily gamble; end-of-month queues stretch because everyone is cashing out; agents carry security risk; float is costly in tight seasons when agents struggle, inclusion shrinks, because an “always-on” rail with “often-dry” cash points is a promise with a hole.
KYC gaps bite too. A mismatched NIDA record, a misspelled name, or no ID at all turns the universal rail into a gate. Appeals are slow; forms are unclear; helplines loop. The people’s modernization was supposed to help them first find themselves, explaining themselves to a machine.
Digital divides persist: smartphones vs. feature phones; data vs. USSD; English menus vs. Swahili defaults; inaccessible flows for persons with disabilities. If the best features reside behind apps and bundles, the rail privileges the already connected.
Finally, fraud and redress. SIM-swap scams and social engineering thrive when security defaults are weak and providers handle complaints in an opaque manner. When money disappears and the response is “wait,” trust leaves faster than funds.
These frictions teach a civic lesson no one intends: that the rail is efficient for collecting, unreliable for protecting. Tekeleza haki, si tu makato. Deliver rights, not just deductions. Smooth the rail where it hurts most or it will become a road people avoid.
Phones as Public Rails: State Use Without State Blur
When the government collects through phones, the UX becomes law in practice. Bill presentment should never say “Pay.” It must show: what for, which law or by-law, the due date, waiver/relief rules, and a redress route. If a traffic fine appears, the screen should display the relevant regulation, the officer’s ID, and the evidence reference. Click receipt, get an official e-risiti with a verifiable code. No mystery charges.
For service-linked payments, license renewals, business registrations, building permits, the rail should overlay a service charter: expected turnaround time, status tracker, and escalation if the clock runs over. If a citizen pays, the system maintains visibility until delivery is made.
Privacy is part of legitimacy. Limit data scope to what the transaction requires. Any wider access, profiling, or linking with other datasets must be lawful, necessary, proportionate, and transparent warrants, not whispers. Publish annual transparency reports: how many requests for data, from whom, for what, and outcomes.
Public dashboards can show aggregates, fees collected by ward, and transfers disbursed to schools, without exposing personal details. Let head teachers confirm capitation, parents see allocations, councillors track trends, journalists download files.
Principle: every shilling the phone takes must come with a right the citizen can see and enforce. The rail is not only a payment channel; it is a contract surface. If the state wants citizens to trust the phone, the phone must let citizens trust, verify, and appeal, without leaving the screen.
Designing for Digital Raia, Product & UX Principles
Good rails are built, not wished. Five design principles turn payers into auditors:
Fair pricing. Tier low-value bands; cap cumulative charges per day; disclose the effective transfer cost before confirmation. Nudge providers to offer “social bands” where fees are nominal.
Transparency UX. Before: show fee + levy itemization. After: send an itemized receipt with legal basis, cost breakdown, and an auto-generated verification code. For public payments, link to “Where this goes” → a ward-level dashboard tile.
Redress by design. Put a dispute button on every transaction. Start a timer; show the escalation path; promise a human callback within 24–48 hours. For fraud and provider error, define compensation rules and publish response-time stats.
USSD parity & accessibility. All essentials must work without data and without smartphones. Swahili by default; clear menus; options for screen readers and high-contrast mode; numeric shortcuts for speed.
Open APIs. Publish clean, documented endpoints for public data: budget checks, transfer confirmations, procurement lookups. Let civil tech build scorecard apps and ward dashboards. If citizens cannot plug in, “open government” is a slogan.
Security defaults. SIM-swap locks; step-up authentication for risky flows; real-time scam warnings; privacy-by-default settings; monthly “security tips” SMS without charge.
Design encodes respect. If a citizen can see costs, trace rights, appeal decisions, and integrate data, the rail trains raia. If they can only click “Pay,” it trains wananchi.
Policy Guardrails, Keep the Rail Public, Not Predatory
Guardrails align incentives so the rail stays public-spirited.
Levy impact test. Make ex-ante distributional analysis a legal requirement for new charges. Publish findings. Add sunset clauses and mandatory six-month reviews. Adjust or repeal if low-value users are harmed.
Interoperability enforcement. Keep on-net/off-net pricing fair; set agent interchange standards; no proprietary traps that raise costs for crossing networks. The rail is a commons.
Consumer protection code. Standardize pre-disclosure, receipts, redress timelines, and refund rules. Penalize missed timelines; require annual provider scorecards on complaints and fraud.
Data protection & due process. Pass a strong data law; create an independent regulator; require warrants for access; ban arbitrary network/app shutdowns; publish transparency reports. Rights follow users onto rails.
Agent network health. Treat agents as critical infrastructure: liquidity support windows during shocks, expedited KYC, security guidance, and standardized commission floors to keep the last-mile viable.
No shutdown pledge. Codify that shutdowns are extraordinary, strictly defined, judicially reviewable, and time-bound. Commerce and rights share the same signal.
A public rail without guardrails turns predatory under pressure. With guardrails, it becomes a platform for citizenship, reliable enough to carry both money and trust.
What to Measure: A Citizen Scorecard
You manage what you measure, and citizens act on what they can see. Publish a quarterly Mobile Money Public Scorecard:
- Effective transfer cost (ETC) for low-value bands (e.g., 1k–10k, 10k–50k), by network and region.
- Access density: agents per 10,000 adults; rural vs. urban.
- Gender gap: active accounts, average balances, cash-in/out frequency.
- Government payments with charters: share of public payments that display legal basis + service standards.
- Redress performance: median complaint resolution time; refund rate for provider error; fraud incidents per 100k users.
- Levy ledger: revenue collected vs. visible outputs (ward-level spend on health/education linked to dashboards).
- Exclusion alerts: number of ID/KYC mismatches resolved; time to resolve; appeals success rates.
Deliver it in Swahili, online and on ward noticeboards, with USSD/SMS short codes for local snapshots. Let radio shows walk through the numbers. Kile kisichopimwa hakisahihishwi. What isn’t measured isn’t corrected, and what isn’t public isn’t believed.
From Wallets to Receipts
Mobile money brought distance to heel. It turned kiosks into counters and hands into wallets. Now it has to do something harder: turn payers into auditors. If phones are only for payment, we produce digital wananchi, efficient, quiet, and exposed. If phones are also for proof, itemized receipts, appeal buttons, ward dashboards, we produce digital raia.
Design the rail to carry rights as well as shillings: fair pricing for the smallest transfers, receipts that cite the law, redress that works on a clock, data that the public can reuse. Then the same tap that moves money will move something rarer: accountability.
Wananchi hutumia simu kulipa; raia hutumia simu kudai risiti. Build for the latter, and the rail that includes Tanzanians will also empower them.
