Safaricom is betting on remittances to grow M-Pesa uptake in Ethiopia following a deal with one of Africa's largest digital payments network Onafriq.
The deal allows friends and relatives from 40 countries to send money directly to M-Pesa subscribers in Ethiopia.
This follows clearance by the National Bank of Ethiopia to start the remittance service in July 2023.
Safaricom Ethiopia, General Manager Paul Kavavu said the deal will make payments easier, and the incorporation of International Money Transfer services into M-Pesa serves that purpose perfectly.
“Ethiopia generates more than five billion USD in remittances annually and this partnership will provide the Ethiopian Diaspora with an easy and fast formal channel to send money to their loved ones in Ethiopia,” said Kavavu
Last year, the World Bank stated that the remittances flow to countries in sub-Saharan Africa reached $54 billion in 2023 - an increase from the previous year's gain.
The increase was driven by strong remittance growth in Mozambique, Rwanda and Ethiopia.
Ethiopia’s Director General of Ethiopian Diaspora, Mohammed Endris, previously noted that in some countries remittances take up to 40-50 percent of the GDP, while the remittance sent by the diaspora to Ethiopia is five percent.
The deal allows M-Pesa to tap into and leverage Onafriq’s extensive network, connecting 500 million mobile money wallets and 200 million bank accounts.
Nika Naghavi, Group Head of Growth at Onafriq said the partnership will directly stimulate the realisation of Ethiopia's digital transformation strategy.
The strategy termed ‘Digital Ethiopia 2025’, places emphasis on enabling systems through digital transformation, of which digital payments form a crucial part.
The country's solution to this includes ensuring financial inclusion, innovation in the banking system and the adoption of innovative solutions.
“We have always believed that payments should be a simple process, as simple as a phone call - connecting individuals through increased access," said Naghavi.
The service complements Ethiopia’s efforts to generate foreign currency inflow through formal channels, offering a safe, inclusive and reliable service to customers through M-Pesa.
