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Safaricom’s M-Pesa mobile money service has been officially launched in Ethiopia, marking a significant move for the Kenyan telecoms operator as it aims to drive growth in one of Africa’s largest economies.
Having established its voice and data network in Ethiopia last year, Safaricom, co-owned by Vodacom from South Africa and Vodafone from Britain, has already amassed over 2 million active users in the Horn of Africa nation.
Originating in Kenya in 2007, M-Pesa has evolved into Safaricom’s most profitable service. It has also been adopted in various other countries including the Democratic Republic of Congo, Egypt, Ghana, Kenya, Lesotho, Mozambique, and Tanzania.
Stanley Njoroge, Safaricom Ethiopia’s interim CEO, emphasized that M-Pesa has been instrumental in advancing financial inclusion and expressed intentions to further enhance the array of services offered through the M-Pesa platform.
Safaricom became the first private telecommunications provider in Ethiopia following the government’s decision in 2019 to liberalize a sector that had been predominantly controlled by the state-owned Ethio Telecom.
With a population of approximately 120 million, Ethiopia possesses one of the youngest demographics in Africa, which positions it as a potential growth driver for Safaricom in the coming years.
Industry analysts perceive substantial opportunities in the Ethiopian market, but also acknowledge the necessity for substantial investments, which could put pressure on Safaricom to deliver swift outcomes.
Safaricom’s core earnings experienced a 20% decrease in the year ending March 31, primarily due to the costs associated with establishing operations in Ethiopia.
The company also faces formidable competition from Ethio Telecom, which saw its profits more than double in its most recent fiscal year. As of July, Ethio Telecom reported a mobile money subscriber base exceeding 34 million through its service Telebirr.
Mobile money services, allowing users to perform money transfers, payments for goods and services, and more, have gained popularity in East Africa.
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