M-PESA SAFARICOM, ONAFRIQ JOIN FORCES TO ENABLE REMITTANCES TO ETHIOPIA
M-PESA Safaricom has entered into an international money transfer agreement with Onafriq, Africa’s largest digital payments network, which operates in 40 African countries. The collaboration aims to facilitate remittance flows to Ethiopia more efficiently.
M-PESA offers individuals convenient financial services via mobile phones, without the need for a bank account, only a Safaricom sim card.
Under this agreement, individuals in Ethiopia can receive remittances from various parts of the world through M-PESA, following authorization from the National Bank of Ethiopia to commence the remittance service in July 2023.
According to the World Bank, remittances to countries in sub-Saharan Africa amounted to $54 billion in 2023, marking an increase from previous years. This growth was particularly notable in countries like Mozambique, Rwanda, and Ethiopia.
While this increase is positive, there is still room for improvement. Remittance receipts play a vital role in poverty reduction and a country’s GDP.
Mohammed Endris, Ethiopia’s director general of Ethiopian Diaspora, has highlighted that in some countries, remittances constitute up to 40-50% of the GDP, whereas the remittances sent by the diaspora to Ethiopia account for only 5%.
Partnerships like the one between M-PESA Safaricom and Onafriq are expected to contribute positively to this figure.
By incorporating international money transfer capabilities into its services, M-PESA can leverage Onafriq’s extensive network, connecting 500 million mobile money wallets and 200 million bank accounts. This network facilitates domestic and cross-border transactions, agency banking, card issuance and processing, and treasury services.
Paul Kavavu, General Manager at Safaricom Ethiopia, expresses the goal of making payments more accessible. He believes that this partnership will provide the Ethiopian Diaspora with a convenient and fast formal channel to send money to their loved ones in Ethiopia.
Nika Naghavi, Group Head of Growth at Onafriq, states that the partnership will contribute to Ethiopia’s digital transformation strategy, known as ‘Digital Ethiopia 2025’. This strategy focuses on financial inclusion, innovation in the banking system, and the adoption of digital solutions.
The agreement with M-PESA Safaricom extends Onafriq’s reach in Africa, strengthening its position as the largest payment network on the continent. Naghavi is confident that this partnership will positively impact economic growth and the achievement of sustainable development goals.
This service aligns with Ethiopia’s efforts to promote foreign currency inflow through formal channels, providing customers with a safe, inclusive, and reliable remittance service through M-PESA.
Tobi Adetunji; Source: Techeconomy
