Safaricom’s M-PESA, which is a trailblazer in providing accessible financial solutions through mobile phones, has joined forces with Onafriq, Africa’s premier digital payments network spanning 40 countries. This strategic partnership is geared towards enhancing the efficiency of remittance flows to Ethiopia.
With M-PESA’s innovative platform, which requires only a Safaricom sim card to access financial services, individuals in Ethiopia can now receive remittances from across the globe seamlessly. This initiative follows the approval from the National Bank of Ethiopia to launch remittance services in July 2023.
The World Bank recently reported a significant uptick in remittance flows to sub-Saharan African countries, soaring to an impressive $54 billion in 2023. This surge is particularly notable in countries like Mozambique, Rwanda, and Ethiopia. While this growth trend is promising, it underscores the need for continued efforts, as remittances play a crucial role in poverty reduction and contribute significantly to GDP.
Mohammed Endris, Director General of Ethiopian Diaspora, underscored the pivotal role of remittances, which account for 40-50% of GDP in certain countries, a stark contrast to Ethiopia’s 5% share. Collaborative initiatives such as the partnership between M-PESA and Onafriq are poised to substantially bolster this ratio.
By integrating International Money Transfer capability, M-PESA expands its reach significantly through Onafriq’s extensive network, connecting 500 million mobile money wallets and 200 million bank accounts. This expansive connectivity facilitates streamlined domestic and cross-border transactions, card issuance and processing, agency banking, and treasury services.
Paul Kavavu, General Manager at Safaricom Ethiopia, expressed the alignment of their objective with the partnership’s goal, stating, “Our objective is to streamline the payment process, and the integration of International Money Transfer services into M-PESA aligns perfectly with that goal. Ethiopia sees an annual inflow of over five billion USD in remittances, and this collaboration will offer the Ethiopian Diaspora a convenient and efficient formal channel to send money to their families in Ethiopia.”
Nika Naghavi, Group Head of Growth at Onafriq, is optimistic about the partnership’s role in advancing Ethiopia’s digital transformation strategy. The collaboration is in line with the ‘Digital Ethiopia 2025’ initiative, which aims to foster financial inclusion, drive banking innovation, and promote the adoption of digital solutions.
Through this strategic partnership, Safaricom’s M-PESA and Onafriq are poised to revolutionize remittance services to Ethiopia, empowering individuals and families with convenient and efficient financial solutions, while contributing to the country’s economic growth and digital evolution.
