Ethiopia has granted Safaricom Ethiopia a licence to operate M-Pesa mobile money services in the country after authorities confirmed that the law had been revised to allow foreign investment in mobile money services.

Less than a week after Safaricom Ethiopia switched on its network, Ethiopia’s Minister of Finance Ahmed Shide said, “A deal has been reached between the government of Ethiopia and Safaricom to grant a licence for mobile money services to Safaricom.”

Until now, only Ethio Telecom could offer its Telebirr mobile money service.

The development has been welcomed by the World Bank and Kenya’s government, both of whom have continued to try to convince Ethiopia to open up its mobile money market.

In June last year, former Kenyan President Uhuru Kenyatta urged the Ethiopian government to open up its telecommunications to private mobile money business investors.

Kenya’s new President William Ruto recently travelled to Ethiopia to attend the launch of Safaricom Ethiopia’s network.

Ruto was quoted by the East African newspaper as saying, “When I came to Ethiopia, the people of Kenya gave me an assignment to make (sure) this service (is) allowed. I thank the Ethiopian government for allowing Safaricom to provide this service.”

In May 2021, the World Bank said it planned to invest US$200-million in Ethiopia’s telecommunications industry, but wanted the government to open the market.

Ousmane Dione, the World Bank’s country director for Ethiopia, Sudan, South Sudan and Eritrea, expressed concern over the decision by the government to limit investment by independent cellular companies in a bid to protect the incumbent Ethio Telecom.

The Safaricom consortium, which includes the British Development Finance Corporation Agency (CDC) and Japanese Sumitomo Corporation, entered the Ethiopian market last year after securing a US$850-million licence to operate in the country.