On 17th of July, Reuters reported that Safaricom was in “advanced talks” with the Ethiopian government to take the mobile money service, M-Pesa to Ethiopia. This is a big deal as Safaricom has said in the past that they would use M-Pesa to penetrate new markets in Africa.
It has been reported that Safaricom will license M-Pesa to an Ethiopian-based bank and the country’s only telco, Ethio Telecom will carry the service while Safaricom hosts the servers in Nairobi. Sources familiar with the matter also told Reuters that Safaricom will initially receive 25% of the annual revenue generated from M-Pesa in Ethiopia but this number would reduce to 10% as user adoption of the service grows.
Ethiopia’s economy has been slow to grow due to its land-locked policies that make it hard for foreign investors to do business in the country. However, since Abiy Ahmed took office, he has made it his duty to steer political and economic reform in the country.
So far, Safaricom and KCB Bank have expressed interest in entering the Ethiopian market that seems so lucrative to investors due to its economic infancy.
Opening up Ethiopia to foreign investors will not only be good for those coming in to do business but will also be beneficial to the 100 million people living in the country.