Onafriq, an African digital payments network, and Safaricom’s M-Pesa have signed an International Money Transfer Agreement. The agreement aims to streamline remittance flows to Ethiopia.
In 2023, Safaricom received the Payment Instrument Issuer License from the National Bank of Ethiopia. Due to this agreement, Ethiopians can now receive remittances through M-PESA, a mobile phone-based money transfer service.
A study using data from 2013 to 2022 found that countries with mobile money services had a GDP that was nearly 1.5% higher than it would have been without mobile money.
Ethiopia’s Director General of Ethiopian Diaspora, Mohammed Endris, previously stated that in some countries remittances take up to 40-50% of the GDP. On the other hand, the remittance sent by the diaspora to Ethiopia is just 5% of the GDP.
The partnership between M-PESA and Onafriq will target to boost this metric.
Paul Kavavu, General Manager at Safaricom Ethiopia, states: “Our goal is to make payments easier, and the incorporation of International Money Transfer services into M-PESA serves that purpose perfectly. Ethiopia generates more than five billion USD in remittances annually and this partnership will provide the Ethiopian Diaspora with an easy and fast formal channel to send money to their loved ones in Ethiopia.”
According to the World Bank, remittance flows to sub-Saharan Africa alone reached $53 billion in 2022, demonstrating the persistent role of immigrants in the financial well-being of friends and family living in their home countries.
Onafriq’s Vast Network
Onafriq has an extensive network, connecting 500 million mobile money wallets and 200 million bank accounts. This vast reach enables domestic and cross-border disbursements and collections, card issuing and processing, agency banking, and treasury services.
Early this year, the fintech partnered with Alviere to boost USA-Africa Remittances.
Nika Naghavi, Group Head of Growth at Onafriq, highlighted the new partnership significantly boosts Ethiopia’s “Digital Ethiopia 2025” strategy. This national plan prioritizes digital transformation, with digital payments as a key component.
To achieve this goal, Ethiopia aims to expand financial inclusion, modernize its banking system, and embrace new technologies.
“We are confident that this partnership will positively impact economic growth and the achievement of greater sustainable development goals,” says Naghavi.
