Safaricom Ethiopia has been granted a mobile money licence by the National Bank of Ethiopia, marking the entrance of the leading Kenyan telco into Ethiopia’s mobile money market.
The issuance of the mobile money licence reflects the NBE’s on-going objective of fostering innovation and financial inclusion in the Ethiopian market,” part of the statement from the National Bank of Ethiopia, Ethiopia’s central bank read.
The move enables Safaricom Ethopia to roll out its popular mobile money product, M-Pesa, in Ethiopia, competing with local firm Telebirr. The licence was granted after a deal was reportedly finalised by President Ruto and Ethiopia’s Prime Minister Abiy Ahmed in Addis Ababa, and the National Bank of Ethiopia said that the move reflected its objective to foster innovation and financial inclusion in the Ethiopian market.
Safaricom Ethiopia has been slow to open up its mobile money market, in part due to the government’s desire to protect its majority-owned Ethio-Telecom and its new mobile money service, Telebirr.
However, in April 2022, a draft bill was announced that would allow foreign-owned telecom operators like Safaricom to offer mobile money services in the country. This came after a bidding process in 2020, where only two consortia placed bids, with the Safaricom-led group ultimately winning the license.
About Safaricom Ethopia
State-owned Ethio Telecom, which has 54 million users and is the second-most populous nation in Africa by population (118 million), had a monopoly up until the advent of Safaricom. Now that Ethio-Telecom, which is supported by the government, offers the Telebirr service, Safaricom’s nearly monopoly M-Pesa has a rival. The Ethiopian government is attempting to sell 45% of Ethio-Telecom, it should be noted.
The previous licensing delays had caused frustration for potential entrants, but this latest development marks a step forward for Ethiopia’s openness to competition in the mobile money sector.
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