Safaricom prepares to switch on Addis in early October
The amended National Payment Proclamation requires foreign and local fintech operators, including mobile money service providers, to pay a license fee regularly. The proclamation, which was passed by the Council of Ministers last month, is expected to be ratified once Parliament is back from recesses.
Officials at the central bank told The Reporter that “the amount is not fixed. It will be stated in the directives of the proclamation. We are currently finalizing the directive required to put the proclamation into effect.”
The amendment of the 2011 proclamation is necessitated to open the mobile money sector to foreign operators. This came especially after Safaricom Ethiopia requested to bring onboard its mobile money arm, Mpesa.
However, Mpesa, a Kenyan mobile money service provider awaiting the amendment of the National Payment Proclamation, is unhappy with the requirement for a license fee, sources close to the matter told The Reporter.
Mpesa is already undertaking preparations to enter the Ethiopian market after government officials gave the green light last year. Managers of Safaricom Ethiopia also confirmed to The Reporter that technical work is already afoot.
“Mpesa has already started building the backdoor software developments. At the beginning, Ethiopian officials told us there would be no license fee for Mpesa. But now, they are telling us there will be a license fee,” complained an official working with the Safaricom Ethiopia, linking the inconsistency with the ebbing Ethiopia’s forex reserve.
However Tewedaj Eshetu, public relations and communication manager at Safaricom Ethiopia, said, “We are waiting for the proclaimation to be ratified.”
Managers of local mobile money companies believe the license fee is a global trend and the amount is not as large as many fear.
“The NBE consulted with owners of mobile money companies before approving the amended Payment System Proclamation. Comments and complaints were included during the stakeholders’ discussion on the draft document,” said a manager of a local mobile money company.
On the other hand, Safaricom Ethiopia is currently preparing for a wide service provision.
Safaricom will launch commercial service in Addis Ababa at a national level in October, according to Tewedaj, though she refrained from disclosing the exact date.
However, sources close to The Reporter disclosed that the launch date is slated for October 6, 2022. A grand ceremony in the presence of higher Ethiopian officials and top management of the five consortiums of Safaricom Ethiopia Plc is expected to be held on the day.
Safaricom launched its first service in Dire Dawa town last month, with a plan to reach 25 cities, including Addis Ababa, by April 2023.