The agreement leverages M-PESA’s mobile money transfer service, accessible to Ethiopians following Safaricom’s acquisition of a Payment Instrument Issuer License in 2023.

This paves the way for Ethiopians to receive remittances directly through M-PESA.

“This partnership offers Ethiopians in the diaspora a seamless channel to support their loved ones,” said Paul Kavavu, General Manager at Safaricom Ethiopia.

Remittances are a significant contributor to Ethiopia’s economy, generating around $5 billion annually.

Kavavu emphasized that integrating international money transfers into M-PESA aligns with their goal of simplifying payments.

The significance of remittances in Africa was highlighted by Mohammed Endris, Director General of the Ethiopian Diaspora Agency.

He noted that remittances can reach up to 50% of GDP in some countries. World Bank data confirms this, with sub-Saharan Africa receiving $53 billion in remittance inflows in 2022

Endris aims to double Ethiopia’s remittance rate, which currently sits at around 5% of GDP.

Onafriq, formerly known as MFS Africa, brings a vast network to the table.

Founded in 2009, the company facilitates digital payments across 40 African markets, connecting over 500 million mobile money wallets and 200 million bank accounts.

According to a 2022 GSMA report, mobile money contributes significantly to GDP.

Countries with mobile money services boast a 1.5% higher GDP compared to those without. This collaboration between Onafriq and M-PESA is expected to further unlock the potential of mobile money in Ethiopia.