Safaricom taps Onafriq to power Ethiopia remittances

March 21, 2024 in Business, Companies by Editor

M-PESA Safaricom has signed an agreement with African digital payments network Onafriq, to facilitate international remittances to Ethiopia. Through the agreement, individuals within Ethiopia will be able to receive remittances from different parts of the world through M-PESA, within the terms of the authorisation that was granted by the National Bank of Ethiopia last July.

The addition of international money transfers into its offering allows M-PESA to tap into and leverage Onafriq’s extensive network, connecting 500 million mobile money wallets and 200 million bank accounts. This vast reach enables domestic and cross-border disbursements and collections, card issuing and processing, agency banking, and treasury services.

“Our goal is to make payments easier, and the incorporation of international money transfer services into M-PESA serves that purpose perfectly,” says Paul Kavavu, General Manager at Safaricom Ethiopia.

Ethiopia received more than five billion USD in remittances annually and this partnership is expected to provide the Ethiopian diaspora with an easy and fast formal channel to send money to their loved ones in Ethiopia.”

Nika Naghavi, Group Head of Growth at Onafriq, says the partnership will directly stimulate the realisation of Ethiopia’s digital transformation strategy. The strategy termed ‘Digital Ethiopia 2025’, places emphasis on enabling systems through digital transformation, of which digital payments form a crucial part. The country’s solution to this includes ensuring financial inclusion and innovation in the banking system.

“We have always believed that payments should be a simple process, as simple as a phone call – connecting individuals through increased access. 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. We are confident that this partnership will positively impact economic growth and the achievement of greater sustainable development goals,” says Naghavi.

The service complements Ethiopia’s efforts to generate foreign currency inflow through formal channels, offering a safe, inclusive and reliable service to customers through M-PESA.

According to the World Bank, remittances flow to countries in sub-Saharan Africa reached USD54 billion in 2023 – an increase from the previous year’s gain. This increase was driven by strong remittance growth in Mozambique, Rwanda and Ethiopia.

Ethiopia’s Director General of Ethiopian Diaspora, Mohammed Endris, previously noted that in some countries’ remittances account for up to 40-50pc of the GDP, while remittances by the diaspora to Ethiopia are equivalent to 5pc of Ethiopian GDP.