Streamlining Money Transfers to Ethiopia

Mpesa Safaricom has teamed up with Onafriq, the leading digital payments network in Africa, to enhance the process of sending money to Ethiopia. This partnership allows Ethiopians to receive money from abroad directly through M-PESA, a mobile financial service that doesn’t require a bank account, just a Safaricom SIM card. This move comes after the National Bank of Ethiopia gave the green light for M-PESA’s remittance service in July 2023.

Remittances to sub-Saharan Africa, including Ethiopia, saw a notable increase in 2023, reaching $54 billion, as reported by the World Bank. This growth, seen in countries like Mozambique, Rwanda, and Ethiopia, is a positive trend, but more efforts are needed. Remittances are vital for reducing poverty and boosting a country’s GDP. In Ethiopia, remittances account for 5% of its GDP, a figure that the partnership aims to increase.

By integrating International Money Transfer services, M-PESA can now access Onafriq’s extensive network, which includes 500 million mobile money wallets and 200 million bank accounts across 40 African countries. This enables a range of financial services, including cross-border payments.

Paul Kavavu the General Manager at Safaricom Ethiopia highlighted the aim of making payments simpler, noting that Ethiopia receives over five billion USD in remittances annually. The partnership provides a formal, quick, and easy way for the Ethiopian diaspora to support their families back home.

Nika Naghavi, Group Head of Growth Onafriq mentioned that this collaboration supports Ethiopia’s digital transformation strategy, ‘Digital Ethiopia 2025’, focusing on financial inclusion, banking innovation, and adopting new solutions. Naghavi emphasized the importance of easy access to payment services, likening it to making a phone call, and expressed confidence in the partnership’s positive impact on economic growth and sustainable development in Ethiopia.

This initiative aligns with Ethiopia’s goals to improve foreign currency inflows through formal channels, offering a secure and accessible service with M-PESA.

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