Kenya: Uhuru Kenyatta Urges Ethiopia to Open Up Market for M-Pesa

Kenya's President Uhuru Kenyatta on Tuesday evening urged the Ethiopian government to consider opening up opportunities for mobile money services as part of its ongoing telecommunications liberalisation process.

Mr Kenyatta said such a move, which would allow Safaricom to introduce its popular M-Pesa service in the market of more than 110 million people, could boost the country's economy and widen access to financial services.

"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," President Kenyatta said.

A Safaricom-led consortium won an $850 million (Ksh91.8 billion) licence to enter Ethiopia's underserved telecoms market.

The head of State, during his State visit in Ethiopia on Tuesday, witnessed the formal award of the operating licence to the group which includes Vodafone, British development finance agency CDC Group and Japan's Sumitomo.

The entry of the consortium will end the monopoly of the State-owned Ethio Telecom. Safaricom will have a 56 percent stake in the consortium.

Entry into Ethiopia presents a significant growth opportunity for Safaricom that reported net earnings of Ksh68.67 billion ($636m) in the year ended March, with M-Pesa contributing the biggest revenue.

The financial service was launched on March 6, 2007.

"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," said President Kenyatta.

"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," he said.

U-turn

Last year, Ethiopia issued a directive that only allowed locally-owned non-financial institutions to offer mobile money service, but has since reversed the decision.

Ethiopian Prime Minister Abiy Ahmed said last month that the mobile-based financial services would be open to competition from May next year, with foreign firms free to battle with Ethio Telecom which recently launched a similar service dubbed telebirr.

On Tuesday, Dr Abiy said the award of the telecom licence to Safaricom catalyses "inclusive prosperity".

Liberalisation of the telecom sector is expected to boost job creation and the rise of new micro, small and medium enterprises (MSMEs).

Safaricom has said it will launch operations from next year following the licence nod and is expected to create over 1.5 million jobs, according to Mr Kenyatta.

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