Ethiopia Considering Opening Mobile Money Market to Foreign Operators

A consultative meeting focused on the future of Ethiopia’s mobile money market is to be held Tuesday (Feb. 21).

The meeting concerns a draft directive that would replace a 2020 directive that opened the sector to non-financial players and would open the market to foreign operators with a $150 million license fee, Shega reported Thursday (Feb. 16).

The draft directive, which is subject to public consultation, also raises digital wallets’ account limits, the report said.

As PYMNTS reported in August, Ethiopia has lagged behind other countries in the region regarding Africa’s mobile money revolution.

It was only in 2021 that Ethiopia got its first nationwide mobile money service in Telebirr, provided by the state-owned telecom company Ethio Telecom.

Then, in August 2022, Ethiopian FinTech Kacha Digital Financial Services became the first private country in the nation to be awarded a mobile money license by the National Bank of Ethiopia.

There is pent-up demand for a local mobile money service in the country, as evidenced by more than 1 million people registering a Telebirr account within a week of its launch.

Ethiopia’s late arrival on the mobile money scene results from the restrictive nature of its telecom market, which, up until late 2022, locked private enterprises out of building and operating mobile networks.

The draft directive and consultative meeting come as the Ethiopian government is considering pending applications from Safaricom Telecom Ethiopia to launch M-Pesa mobile money services in the country, according to the Shega report.

Safaricom CEO Peter Ndegwa told PYMNTS in August 2022 that the Kenyan firm sees Ethiopia as an opportunistic market where the company plans to offer the M-Pesa service once regulatory approval is received.

“When that [mobile money] license comes, we believe we can create similar success in Ethiopia that we’ve seen in Kenya and in the region,” Ndegwa said. “[By so doing, we will] democratize how financial inclusion is delivered and digitize the country in the context of enabling mobile internet.”

It was reported in 2021 that Ethiopia is a coveted prize for global telecom providers. The country has more than 110 million people, and less than half of them are telecom subscribers — making it one of the world’s few remaining untouched markets.