Safaricom is in “advanced talks” with the Ethiopian government to introduce its popular mobile money service firm M-Pesa to East Africa’s biggest market in terms of population.
Ethiopia’s population is 100m people, with the majority being youngsters under the age of 30. According to the report by Reuters, Safaricom, which is owned by Britain’s Vodafone, will license the use of the M-Pesa trade name to an Ethiopia-based bank while Safaricom will host the servers in Nairobi.
Ethiopia’s state-owned telecoms firm Ethio Telecom will carry the service. the move follows Prime Minister Abiy Ahmed’s attempts to open up Ethiopia’s economy by allowing state-run telecoms monopoly and state-owned Ethiopian Airlines to seek private domestic and foreign investment. Much of the East African nation’s economy has been closed off to foreign investors and controlled by the ruling EPRDF coalition, in power since 1991.
But the new prime minister, who took over from Hailemariam Desalegn following three years of unrest in which hundreds of people were killed by security forces, has sought to transform the economy both economically and politically. This has encouraged businesses such as Safaricom to make serious moves to enter the country.
M-Pesa, which was launched in 2007, has nearly 30m users in Kenya and has become the principal driver of profit growth for the dominant telecoms provider in East Africa as revenues from traditional voice and data services have flattened off.