President Uhuru Kenyatta on Tuesday the 8th of June 2021 implored the Ethiopian government to consider opening up more opportunities for mobile money services as part of the telecommunications liberalisation process it is currently carrying out.
According to Business Daily Africa the President of the East African nation of Kenya made it known that a move like that, which while making possible for Safaricom to its widely popular M-Pesa service into a market of more than 110 million people, could also lead to the Ethiopian economy getting a boost and enjoying the benefits of a widened access to financial services.
In the words of President Uhuru Kenyatta, “Studies have shown that enhanced access to mobile financial services have a great potential to reduce poverty as more people are enabled, easier and safer savings and in effect, greatly influencing the kind of choices they make in life.”
A consortium which was led by Safaricom, secured an 850 million United States Dollar (91.8 billion Kenyan Shillings) license to set up operations in Ethiopia’s telecommunications market which has been underserved.
President Uhuru Kenyatta during his state visit to Ethiopia on the 8th of June 2021 witnessed the formal presentation of the operating license to the consortium which includes Japan’s Sumitomo, Vodafone, and British development finance agency; the CDC Group.
The entry of the group will essentially put an end to the monopoly of Ethio Telecom which is owned by the Ethiopian government. Safaricom will hold a 56 percent stake in the consortium.
Safaricom’s entry into the Ethiopian telecommunications market presents a significant growth opportunity for the telecommunications giant which already reported a net earning of 68.67 billion Kenyan Shillings in the financial year which ended in March of 2021 with M-Pesa contributing the largest to said revenue. The financial service was launched on the 6th of March in 2007.
President Uhuru Kenyatta stated that, “In Kenya, the success of M-Pesa, Africa’s, if not global, first mobile money platform, is a classic example of what possibilities lie in mobile financial services, if fully exploited.”
The President added that, “Women, have particularly been empowered by these services, and are now able to participate meaningfully in the economy, alongside men. This is an area we must devote our collective efforts to as we usher in the digital economy.”
In 2020 a directive was issued by Ethiopia that only authorized non financial institutions that are locally owned, to provide mobile money services. That directive has however since been reversed.
The Prime Minister of Ethiopia; Abiy Ahmed stated in May 2021 that the financial services based on mobile, would be open to competition from May of 2022. This means that foreign or international companies will be able to go head to head with Ethio Telecom which has in recent times launched its own mobile money service called Telebirr.
On the 8th of June 2021 Dr. Abiy Ahmed stated that the awarding of the telecommunications operations license to Safaricom, is proof of Ethiopia’s “inclusive prosperity” approach.
The liberalization of the telecommunications sector is expected to boost job creation as well as encourage the emergence of new Micro, Small and Medium Enterprises (MSMEs)
Safaricom has revealed that it will be launching its operations in Ethiopia from next year (2022) after the license approval. According to President Uhuru Kenyatta, it is expected to create more than 1.5 million jobs.
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