Ethiopia Lunch Brings Safaricom Shares Surge

Oct 8 , 2022

Last week’s launching of telecom services by the Kenyan-led consortium, Safaricom Ethiopia Plc, not only broke a century-old monopoly by a state-owned enterprise. The news brought good fortune to the company, seeing its share values surge after Ethiopian authorities announced that they decided to grant it a permit for mobile financial services. Ahmed Shidie, finance minister, told an audience gathered at Friendship Square on Thursday, September 6, that Safaricom’s M-PESA can operate in the Ethiopian market that has remained closed to competition for over 100 years. Safaricom became the first private operator in Africa’s largest telecom markets, with a population of over 100 million people. Safaricom's shares jumped more than six percent to 0.3885 dollars. "This was baked into the price," a Nairobi-based trader told Reuters. "I think it's a bit of a sugar rush, to last a day or two, and then we move back." A consortium of companies, including the South African Vodacom, the British Vodafone and Japan’s Sumitomo Corporation, won an operating license outbidding its contenders by offering 850 million dollars. Over a year in preparation, Safaricom Ethiopia switched its network in Addis Abeba last week, after piloting its services in 10 cities, mainly Dire Dawa. The company plans to cover no less than 14 cities by mid-next year. “We’re optimistic about how the technology and connectivity we provide contribute to a digital future and eventually transform people’s lives,” Safaricom CEO, Peter Ndegwa, said. The decision to allow Safaricom to begin mobile money service has not been in the initial deal, however. Anwar Soussa, CEO of Safaricom Ethiopia, pledged to roll out the service in three months. Safaricom is credited for being a pioneer in mobile phone-based money transfer, launching M-PESA 15 years ago. Almost half of the company’s revenues come from its mobile-payment services. “Safaricom’s success story is such an enduring innovation of how tech revolution is bypassing traditional barriers to deliver sustainable prosperity”, Kenya’s President William Ruto tweeted. Ruto attended the launch last week, making his first trip to an African country after his August election.


Abyssinia Bank Taps to Digital Loan Solution

The Bank of Abyssinia (BoA) is moving forward to provide banking solutions facilitating microloans. The Bank has hired an Indian-based tech vendor Newgen Software Company, that bagged the international bid on December 22, 2022. Over 10 companies have shown interest in the bid floated by the bank four months ago. The solution provider has committed to completing the project in six months with Yonas Daniel, regional manager for Newgen, and Menbereselassie Gebrekidan, procurement director at Aby...



Bank of Abyssinia rolls out banking services on a truck around Meskel square in the capital. With less than half of Ethiopian adults having access to bank accounts, financial inclusion is a major issue. The central bank revealed in August 2022 that 8,944 commercial bank branches exist in the country. The 30 commercial banks currently in operation offer credit services to less than 400,000 customers charging an average of 17pc interest on asset-backed loans...



Left) Elias Woldu and Mesnbet Shinkute sign a Memorandum of Understanding on behalf of the Ethio-American and Addis Abeba Chamber of Commerce & Sectoral Association, respectively. Some estimates put the number of Ethiopian diaspora living abroad at over two million people, larger than the population of several small nations. Continued economic and political deprivation has forced many to leave the country for better opportunities. While migration to other countries is still high, the number...