Ethiopia closes door on M-Pesa, only local companies allowed

Ethiopia has dealt a blow to the aspirations of foreign mobile phone companies like Safaricom, closing its door to popular mobile money services like M-Pesa in a bid to boost non-cash payments in the country. The move by the Ethiopian government has sparked discussions and debates surrounding the future of mobile money in the region, with some questioning the impact of the decision on the country's economy. In a recent interview on CNBC Africa, Samuel Getachew, a Writer and Analyst, shed light on the government's decision-making process. According to Getachew, the Ethiopian government has decided to only allow locally-owned non-financial institutions to offer mobile money services, effectively shutting out foreign players like Safaricom. Getachew highlighted that Prime Minister Abiyah Ahmed's vision to open up the Ethiopian telecom market and other sectors has faced resistance from advisors who believe that certain institutions should remain in the hands of Ethiopians to safeguard national interests. This stance has resulted in missed opportunities for foreign investments and advancements in the country's telecommunications sector. As the discussion turned towards the privatization of Ethio Telecom and the role it could play in spearheading mobile money services, Getachew noted that progress in Ethiopia tends to be slow compared to other countries. Despite ambitious economic reforms, the regulatory framework for mobile money services in the country still seems lacking. Getachew expressed concerns about Ethiopia's ability to attract international players and investments due to restrictive policies. Ethiopia's decision to restrict foreign mobile money platforms like M-Pesa has raised questions about the potential impact on financial inclusion in the country. With over 75% of the population remaining unbanked and a significant concentration of bank branches in the capital, there is a pressing need for convenient and accessible financial services. Getachew pointed out that mobile money platforms could have facilitated easier and more efficient money exchanges for Ethiopians, contributing to economic growth. Discussing the broader implications of the government's decision, Getachew underscored the missed opportunity for Ethiopia to follow the successful model of mobile money adoption in Kenya. Platforms like M-Pesa have proven transformative for the Kenyan economy, raising hopes that similar services could have catalyzed economic growth in Ethiopia. In conclusion, the exclusion of foreign mobile money services in Ethiopia represents a setback in the country's quest for modernization and economic development. As Ethiopia navigates its path towards inclusive financial services and foreign investments, the decision to keep M-Pesa out raises concerns about the country's readiness to embrace digital transformation. While the government's move may have been driven by concerns for national interests, it has inadvertently cast a shadow on the potential for innovation and growth in the telecommunications sector.