Ethiopia Makes Way For M-PESA, Foreign Mobile Money Products In New Draft Bill

Safaricom Ethiopia Team
Safaricom Ethiopia Team

Safaricom has since entered the Ethiopian market after years of lobbying that cost USD 850 million.  

Its entry into the country means that the telco will offer mobile services, as well as mobile money products. This will be in the form of M-PESA, Kenya’s biggest mobile money service that has also proved its success locally and in other markets where it has been deployed.

Safaricom Ethiopia, which has since picked its top leadership for the country, has not had it all smooth in terms of M-PESA launch plans.

Back in April 2020, Ethiopia killed Safaricom’s M-PESA launch prospects. Ethiopia strictly limited the launch of mobile money products and services to local organizations, effectively kicking out any prospects of M-PESA.

However, the decision to limit the launch of a mobile money product internally has since been abandoned following Ethiopia’s announcement that it would allow foreign companies to take part in the exercise.

This meant that M-PESA has a chance to take its business there, bearing in mind that it is the leading and most robust mobile money service in Africa and beyond.

The announcement was made by the country’s PM Abiy Ahmed who said that the ground was open for mobile money bids from May 2022.

The PM also added that the Ethiopian government had forgone $500 million after it limited the launch to local companies.

This month, and as reported by Business Daily, Ethiopia is even making the ground more open for mobile money and associated payments services. This is in the form of a draft bill that will allow foreign investors to invest in the mobile money space, which, by extension, boosts Safaricom Ethiopia’s plan to launch M-PESA services sometime over the year.

The remaining legal issues will be ironed out by the National Bank of Ethiopia.

Safaricom Ethiopia is part of a consortium that includes the likes of Vodacom Group, Sumitomo Corporation, and CDC Group.

The telco has since built a $100 million data centre in Addis Ababa, which was put together by Chinese companies. The data centre is part of a $300 million budget that Safaricom had planned to spend in 2022.