Nairobi — Safaricom Ethiopia has been granted a license by the Ethiopian Government to roll out M-Pesa in the country.

The deal was brokered by President William Ruto and Ethiopia's Prime Minister Abiy Ahmed in Addis Ababa, Ethiopia.

Regulatory approval now paves way for the establishment of an M-Pesa unit in Ethiopia, allowing the telco to expand its lucrative mobile money business to the untapped Horn of Africa country with over 100 million people.

In the year ended March 2022, Safaricom announced a Sh50 billion profit before tax on its mobile money unit, M-Pesa.

The growing profitability of the product has been helped by the increased adoption of mobile payments in the past two years.

"We congratulate Safaricom for being authorized to run mobile money in Ethiopia," President Ruto wrote on his Twitter handle.

In April, Ethiopia's central bank said it had drafted a Bill to pave the way for foreign investors like Safaricom to offer mobile money services. Existing laws only allowed locally owned non-financial institutions to offer the services.

The approval to setup M-Pesa comes after Safaricom officially launched its services in Ethiopia.

The event, which was held in Ethiopia's capital Addis Ababa, was attended by Safaricom Chief Executive Officer (CEO) Peter Ndegwa and his Ethiopian counterpart Anwar Soussa.

The network operator says that it will offer 2G, 3G, and 4G mobile services across Ethiopia's 11 cities, including the Capital as well as the second largest city of Dire Dawa

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It also plans to expand to an additional 25-cities in the country by April 2023, enabling it to reach 25 per cent of its over 90 million population size.