Ethiopia has shut the door for foreign mobile phone companies like Safaricom, which had hoped to introduce its popular M-Pesa mobile money transfer platform in the market of 100 million people, saying only local companies would be allowed to do offer such services.
Safaricom had launched talks with the Ethiopian government to launch the mobile money service in the country but Thursday, the Ethiopia’s central bank said it would only allow locally-owned non-financial institutions to offer mobile money services as it seeks to boost non-cash payments.
The new directive means that only companies like Ethio Telecom, which is a government-owned monopoly, have the greenlight to move into mobile money services. It also means foreign companies have effectively been locked out. As such, for a company like Safaricom to offer the service in Ethiopia, it will need to go into partnership with Ethio Telecom, which is in line to be privatised through the sale of a minority stake.
Safaricom, in partnership with its parent company Vodacom, and a number of other global telecom firms such as MTN, Orange, Etisalat and Airtel, have all expressed interest in gaining access to Ethiopia’s fast-growing mobile phone services market.
Without further changes to the regulations, Safaricom will remain unable to offer mobile financial services business in the customer-rich market, analysts said.