- Tired of Waiting for Nigeria, M-Pesa Looks Towards Ethiopia
After months of waiting for Nigeria’s regulators to issue it licence to bring its popular mobile money service, M-Pesa, to Nigeria, Safaricom appears to have moved on to Ethiopia. The company is said to be in “advanced talks” with the Ethiopian government to introduce the innovation in the market of 100 million people.
According to Reuters, M-Pesa introduction in Ethiopia could transform the country’s economy by allowing people send money to each other rather than rely on the “decrepit and inefficient banking system”.
The Nigerian banking system is far removed from “decrepit and inefficient”. Eager not to be replaced by new financial technology (Fintech) startups, over 90 per cent of the banks have gone the extra mile to reinvent themselves and become champions of innovation in digital banking.
Notwithstanding, their attempts at cracking the mobile money market has not yielded the expected results of growing the number of banked Nigerians significantly. The Central Bank of Nigeria had an 80 percent financial inclusion target which it admitted recently that it was not achievable by 2019.
Many years after banks began to leverage fintech to innovate their services, the number of people that are unbanked remains almost unchanged – if not in decline going by the last World Bank Global Findex.
In view of this, different experts and stakeholders have urged the financial services regulator, the CBN, to rethink current policies on mobile money which does not allow mobile network operators (MNOs) to participate in the market, like in other African countries.
In anticipation that the CBN will have a rethink, Safaricom executives headed to Nigeria in June 2017 with the aim to secure mobile banking licence. The company was brimming with confidence having gathered a sizable financial war-chest from the sale of a 35 per cent stake in Nairobi-based Vodacom Group Limited by its parent company Vodacom Group Plc and a market capitalisation of $10.5 billion after its share price hit an all-time high of Ks27.25 in August.
Bob Collymore, chief executive officer of Safaricom told Bloomberg in an interview that, “Before the end of the year, I would expect to have something to roll out.” Nearly one after the promise has yet to become reality.
Experts have said that fear of creating an unequal playing field could be reason for stonewalling Safaricom’s efforts at courtship by the Nigeria market. The regulatory environment is structured in such a way that telcos are relegated to the basic role of infrastructure providers. Safaricom hopes it will not face this challenge in Ethiopia once the government follows through on its stated intention to open up its telecoms sector to foreign companies.
To be sure, Nigeria is not the only country shutting the door on M-Pesa. Of the “Big three” economies in Africa (South Africa, Egypt, and Nigeria), M-Pesa is only available in one – Egypt. Efforts to launch in South Africa have also failed repeatedly until it was finally scrapped by Vodacom.