Safaricom Ethiopia has today officially launched its mobile money service, M-PESA, in the country. This strategic move follows the acquisition of a Payment Instrument Issuer Licence from the National Bank of Ethiopia, marking a significant milestone for the company.
Successful Pilot Phase
Over the past three months, M-PESA has successfully completed a rigorous pilot and testing phase, ensuring technical readiness. Additionally, valuable partnerships with prominent banks have been established, and a dedicated team of M-PESA agents has been recruited, trained, and onboarded. This strategic expansion is expected to bolster revenue from its Ethiopian operations and support the company’s objective of achieving profitability by 2027.
Interim CEO of Safaricom Ethiopia, Stanley Njoroge, said, “We are excited to go live with M-PESA in Ethiopia and start providing Mobile Financial Services to our customers. M-Pesa is known to be a game-changer for financial inclusion and provides services to more than 51 million customers across seven countries in Africa offering a safe and secure platform for transactions.”
The cost of expanding operations in Ethiopia resulted in a 5% decline in Safaricom’s core earnings for the fiscal year ending in March. Ethio Telecom, a formidable competitor, saw its profits more than double in the same period. Telebirr, the Ethiopian telco’s mobile money service, boasts an impressive subscriber base of over 34 million as of July. Through this mobile money service, customers can conveniently pay for goods and services, purchase airtime, transfer money to and from their bank accounts, and receive domestic and international transfers.
Since Safaricom’s launch in Ethiopia in 2022, more than 2 million active users have joined their voice and data network.
How to Access M-PESA Services in Ethiopia
Safaricom Ethiopia customers can conveniently access M-PESA services by dialing *733# or the M-PESA Safaricom Ethiopia smartphone app, available for both iOS and Android. The app is currently offered in five languages and can be downloaded from the Google Play store. It will soon be available for iOS devices.
Having launched M-PESA in Kenya in 2007, the telco has successfully expanded its services to the Democratic Republic of Congo, Egypt, Ghana, Lesotho, Mozambique, and Tanzania. Now, Safaricom is confident that Ethiopia, with its population of approximately 120 million people and one of Africa’s youngest populations, will be a major driver of growth in the coming years.
Industry analysts recognize the immense opportunities in the Ethiopian market, albeit with the understanding that substantial investments will be required. Safaricom faces the pressure of delivering prompt results as it ventures into this new territory. As a consequence of the costs incurred in starting operations in Ethiopia, Safaricom’s core earnings declined by 20% in the fiscal year ending on March 31.
Tapping into Opportunity Amidst Challenges
The company is also facing strong competition from Ethio Telecom, which saw its profits more than double in the latest financial year. In July, Ethio Telecom reported a subscriber base of over 34 million for its mobile money service, Telebirr. On August 7, 2023, Safaricom Ethiopia announced that it had secured $257.4 million (KSh36.8 billion) in funding from the World Bank Group to support its greenfield telecommunications projects.
Additionally, the telco recently closed its sites in Amhara, Ethiopia’s second-largest region. This decision was made following a six-month state of emergency declared by the federal government on August 4, 2023, due to a crisis between the military and the Fano militia, a part-time militia with no formal command structure.