Ethiopia has kickstarted the process of changing its national payment law to pave way for Safaricom to launch its mobile money service M-Pesa in the country. This is good news following the Central Bank of Ethiopia’s cue, drafting a bill that will allow foreign investors to offer mobile money services. The Bill was made public last week.
“Foreign nationals may be allowed to invest in a payment instrument issuer or a payment system operator business; or establish a subsidiary which shall be licensed as a payment instrument issuer or payment system operator,” the bill states.
Safaricom is part of a consortium comprising of Vodafone, Vodacom, the United Kingdom’s CDC Group, and Japan’s Sumitomo Corp, that won Ethiopia’s telecommunications license with a bid of $850 million last year. The consortium is expected to invest over $8billion over the next decade making it the single largest FDI into Ethiopia to date.
If the law is passed, the Safaricom consortium will launch M-Pesa services in Ethiopia.
“So far, there is no law that enables foreign operators like M-Pesa to acquire a licence in Ethiopia. If the new amendment is approved, it will allow M-Pesa to get a licence in Ethiopia,” Marta Hailemariam, the head of payment settlement at National Bank of Ethiopia (NBE), told the Ethiopian press.
Last year, the country embarked on a major initiative through the national digital payment strategy (NDPS) that seeks to improve its payment efficiency across all sectors and boost the efficiency of service delivery and stimulate digital financial inclusion.
Early this year, Safaricom announced it is building a new $100m data centre in Ethiopia’s capital, Addis Ababa, as it seeks to roll out commercial operations in the country mid this year.
Pedro Rabacal, Chief Technology Officer, Safaricom Ethiopia, mentioned that it is investing around $300 million into the country in 2022.