Kenya’s leading mobile money platform, M-PESA Safaricom, has forged an International Money Transfer Agreement with Onafriq, Africa’s foremost digital payments network spanning 40 countries across the continent. This partnership aims to streamline remittance flows to Ethiopia, offering a seamless avenue for individuals to send and receive funds.
M-PESA, renowned for its convenient and swift financial services accessible via mobile phones, eliminates the necessity for a traditional bank account, requiring only a Safaricom SIM card for operation. Through this collaboration, individuals within Ethiopia can now receive remittances from various parts of the globe through M-PESA, following authorization from the National Bank of Ethiopia to commence the remittance service in July 2023.
Recent data from the World Bank revealed a notable surge in remittance flows to sub-Saharan African nations, with a total of $54 billion recorded in 2023, marking an upturn from previous years. This growth was particularly pronounced in countries like Mozambique, Rwanda, and Ethiopia.
While acknowledging the positive trajectory in remittance inflows, stakeholders emphasize the pivotal role such funds play in poverty reduction and bolstering a nation’s GDP. Mohammed Endris, Director General of Ethiopian Diaspora, underscored the significance of remittances, noting their substantial contribution to GDP in some countries, contrasting it with Ethiopia’s current 5% remittance share. The partnership between M-PESA Safaricom and Onafriq is poised to augment this figure significantly.
The integration of International Money Transfer capabilities into M-PESA’s offerings enables the platform to harness Onafriq’s expansive network, linking 500 million mobile money wallets and 200 million bank accounts. This extensive reach facilitates domestic and cross-border transactions, card services, agency banking, and treasury operations.
Paul Kavavu, General Manager at Safaricom Ethiopia, articulated the significance of the partnership, stating, “Our objective is to streamline payments, and the integration of International Money Transfer services into M-PESA perfectly aligns with that goal. With Ethiopia receiving over five billion USD in remittances annually, this partnership provides the Ethiopian Diaspora with a convenient and rapid formal channel to send money home.”
Nika Naghavi, Group Head of Growth at Onafriq, emphasized the partnership’s role in advancing Ethiopia’s digital transformation agenda, particularly the ‘Digital Ethiopia 2025’ strategy, which prioritizes digital payment solutions to foster financial inclusion and innovation.
“This collaboration extends our footprint across Africa and reinforces our position as the continent’s premier payment network,” Naghavi remarked. “We believe that simplifying payments and enhancing access will catalyze economic growth and contribute to achieving sustainable development goals.”
The service aligns with Ethiopia’s efforts to bolster foreign currency inflows through formal channels, offering customers a secure, inclusive, and dependable avenue for financial transactions via M-PESA.
