Ethiopia Issues Mobile Money Transfer Licence To Kenya’s Safaricom


The Central Bank of Ethiopia announced on Thursday that it has given Kenyan telecoms operator Safaricom the country’s first mobile money transfer licence to a foreign operator in the country’s 100 percent Ethiopian banking sector.

Safaricom Ethiopia, along with the incumbent and 100% state-owned operator Ethio Telecom, has been awarded the second mobile phone license in Ethiopia for 2021. Since 2022, the operator has been progressively expanding its network in Africa’s second most populous country (120 million people).

The National Bank of Ethiopia (NBE) announced in a news release that it has “today issued the mobile money transfer services licence to Safaricom M-Pesa Mobile Financial Service Plc.”

The latter is a recently formed subsidiary of Safaricom Ethiopia, a consortium led by Safaricom and included of South African operator Vodacom and Japanese conglomerate Sumimoto.

“This is the first mobile money transfer licence granted to a foreign investor in Ethiopia,” the NBE added.

At the launch of its services in Addis Ababa in October, Safaricom Ethiopia announced that it had reached an agreement with the Ethiopian government to obtain the mobile money licence.

“Before issuing the licence, the NBE amended the national Payment Systems legislation to establish the necessary regulatory framework for foreign telecom operators to provide Mobile Financial Services (MFS) in Ethiopia,” Safaricom Ethiopia said in a statement.

Safaricom Ethiopia also stated that its mobile finance services will be available in the second half of 2023.

Safaricom’s M-Pesa service, which is popular in Kenya, allows users to send and receive money, pay bills, and make purchases without having a bank account.

Safaricom claims that 51 million individuals in seven African countries use it. Safaricom believes that M-Pesa provides about 40% of its profits in its most recent financial report.

In Ethiopia, Ethio Telecom offers Telebirr, a mobile money transfer service named after the Ethiopian national currency, the birr.

“We strongly support the spread of digital payment systems as a substitute for cash transactions,” says the NBE, as Ethiopia announced last year its intention to open its banking sector to foreign players.

When he came to power in 2018, Ethiopian Prime Minister Abiy Ahmed announced a vast series of reforms to modernize the economy, which is still highly state-run and not very open to foreign investment.

But the country’s economy has deteriorated sharply in recent years and the drive for reform has stalled.

Leave a Reply