Ethiopians could soon enjoy the services of M-Pesa from Kenya's Safaricom

Kenya’s telecommunications company Safaricom is negotiating with the Ethiopian government to introduce its popular M-Pesa mobile money service to neighbouring Ethiopia, a market of 100 million people, two sources said on Tuesday.

Britain’s Vodafone, Safaricom’s parent company, will license the use of the M-Pesa trade name to an Ethiopia-based bank while Safaricom will host the servers in Nairobi, one telecoms industry source told Reuters.

Ethiopia’s state telecommunications monopoly, Ethio telecom, will carry the service, the source added. Started in 2007, M-Pesa has nearly 30 million users in Kenya.

Ethiopia to liberalise economy

The development comes as many telecommunications companies and banks prepare to take advantage of opportunities that could arise as Ethiopia opens up its economy.

This week, Kenya’s biggest bank by assets, KCB Bank said it was ‘ready to invest’ in Ethiopia as opportunities arise from a possible liberalisation of foreign investment rules.

Since taking office in April, Ethiopia’s reformist Prime Minister Abiy Ahmed has shaken up politics and the economy too by emphasising the need to attract investment.

The Ethiopian government’s decision last month to sell stakes in its lucrative telecoms monopoly and other assets to private domestic and foreign investment, has raised hopes that the state might also loosen its grip on other sectors that foreign companies are eager to enter.

South Africa’s MTN Group and Vodacom Group also expressed interest in the Ethiopian market, following the June announcement that Ethiopia would partially liberalise its economy.