NAIROBI, Kenya, Mar 21 – Safaricom, through M-Pesa, has inked a deal with Onafriq, Africa’s digital payments network, operating in 40 African countries, to help streamline remittance flows into Ethiopia.
M-Pesa facilitates quick and accessible transactions without requiring a bank account, only a Safaricom SIM card.
With authorization from the National Bank of Ethiopia, the mobile money platform now allows Ethiopians to receive international remittances.
The World Bank reported a significant increase in remittances to sub-Saharan Africa in 2023, reaching $54 billion, an increase from the previous year’s gain.
Despite progress, Ethiopia aims to increase its remittances, currently at 5 percent, in contribution to GDP as well as reducing poverty, through partnerships like M-Pesa’s with Onafriq.
“While this increase is a move in the right direction, there is work to be done. The receipt of remittances plays a crucial role in reducing poverty as well as the GDP of a country,” said Ethiopia’s Director General of the Ethiopian Diaspora, Mohammed Endris.
“In some countries remittances take up to 40-50% of the GDP, while the remittance sent by the diaspora to Ethiopia is 5%. A partnership such as the one between M-PESA Safaricom and Onafriq will only serve to contribute to this figure,” he elaborated.
This collaboration expands M-Pesa’s reach, connecting 500 million mobile wallets and 200 million bank accounts for domestic and cross-border transactions.
Paul Kavavu, General Manager at Safaricom Ethiopia, emphasized the aim to simplify payments, especially for the Ethiopian diaspora, which annually sends over five billion USD in remittances.
“Our goal is to make payments easier, and the incorporation of International Money Transfer services into M-PESA serves that purpose perfectly. Ethiopia generates more than five billion USD in remittances annually and this partnership will provide the Ethiopian Diaspora with an easy and fast formal channel to send money to their loved ones in Ethiopia,” he noted.
Nika Naghavi, Group Head of Growth at Onafriq, highlighted the role of this partnership in Ethiopia’s digital transformation strategy, focusing on financial inclusion and innovative solutions outlined in the ‘Digital Ethiopia 2025’ plan.
“The agreement with M-PESA Safaricom extends our reach in Africa even further and strengthens our position as the largest payment network on the continent,” Naghavi said.
This collaboration not only supports economic growth but also aligns with Ethiopia’s efforts to boost foreign currency inflow through formal channels, offering a secure and inclusive service via M-Pesa.
