The World Bank believes that the availability of US Dollar denominated mobile money accounts will be key for Ethiopia - which has just licensed its first mobile wallet - given the high levels of inflation and exchange rate volatility, as well as high demand for mobile remittance receipts.

Safaricom, part of the consortium that won a bid to build and operate Ethiopia’s first private mobile network, expects to roll out a mobile wallet one year after its licensing, in line with the Ethiopian government’s position.

State-controlled mobile operator Ethio Telecom is already operating the recently launched TeleBirr wallet.

Although TeleBirr expects to link up the wallet to bank accounts in the short term, the World Bank is of the view that US Dollar denominated mobile money accounts will be pivotal.

Other US Dollar denominated wallets are already popular in countries such as Zimbabwe, while in Kenya , Safaricom is also offering a service for foreign currency remittance receipts.

Mobile receipts of remittances are gaining traction as markets continue to be impacted digitally by COVID-19, according to the GSMA and World Bank.

US Dollar denominated mobile money accounts in Ethiopia “would also facilitate the use of mobile phones to receive remittances from abroad, which is a particularly popular service in neighbouring Somalia,” adds the World Bank.

The Bretton Woods institution says Somalia has “one of the highest levels of mobile money usage in the world”.

A recent World Bank Findex survey notes that Ethiopia has one of the lowest levels of utilisation of digital financial services in Africa, which marks the significant upside potential for mobile money.

“Just 0.4 per cent of the population sampled in Ethiopia had used a mobile phone or the internet to make a financial payment. The corresponding level of usage in Kenya, for instance, was 57 percent and the average in Sub-Saharan Africa was 24 percent,” says the World Bank.