(Ecofin Agency) - The scope of the license granted to Safaricom in 2021 does not include mobile money services. While the operator is currently fine-tuning the launch of its operations in Ethiopia, authorities are elaborating a legal framework to let it offer mobile money services. 

Telecom operator Safaricom may be allowed to offer financial services in Ethiopia via Mpesa, its mobile money platform. Indeed, last week, the National Bank of Ethiopia (NBE), Ethiopia's central bank, unveiled a bill amending the national payment law to allow foreign investors to offer mobile money services in the local telecom market.  

In May 2021, Safaricom was granted a telecom license, the first private telecom license in Ethiopia’s history. The license granted in the framework of a liberalization process did not include mobile money services.

“So far, there is no law that enables foreign operators like M-PESA to acquire a license in Ethiopia. If the new amendment is approved, it will allow M-Pesa to get a license in Ethiopia,” said Marta Hailemariam, head of payment settlement at NBE.  

To operate M-Pesa, Safaricom needs a license like the one issued by NBE for Ethio Telecom's Telebirr.

Until May 2022, Telebirr will hold a monopoly over the Ethiopian telecom market to allow the state operator to consolidate its position. Nevertheless, Safaricom is preparing to launch its mobile money services with its telecom offers. Last February, the Kenyan announced that it had already ordered equipment that would help roll out the mobile money platform in Ethiopia.  

If the bill is passed, Safaricom will introduce M-Pesa to a new market of 110 million users and compete with Telebirr. By leveraging its experience in the field, it will possibly be able to take over the segment. In Kenya, it has demonstrated its ability to introduce innovative offers. It is even the leader of the mobile money segment. 

Isaac K. Kassouwi