Kenyatta says entry of private mobile money players will boost investment, development in Ethiopia
Kenyan President Uhuru Kenyatta has called on Ethiopia to open up its telecommunications sector to private mobile money business investors. It will not only invite foreign investment into the region, but will also facilitate further development of the telecom sector.
This development has come days after Ethiopia awarded operating license to private telecom players in a move to end the monopoly of state-owned Ethio Telecom. Last month, Ethiopia’s telecommunicationsregulator gave an operating license to a consortium led by Kenya’s leading telecoms company Safaricom, Vodafone and Japan’s Sumitomo.
On Tuesday, Kenya’s President Kenyatta flew to Addis Ababa to witness the formal signing of an operational agrement between the Consortium and Ethiopian government.
Addressing the gathering in the Ethiopian capital, Kenyatta said that the deal is part of the cherished journey of mutual prosperity aimed at improving the economies of both countries. Ethiopian PM Abiy Ahmed also hailed the occasion as a “monumental moment” for the country.
During his visit to Ethiopia, the Kenya President said that bringing private mobile money business investors into the telecom sector will offer millions of Ethiopian people avenues for financial inclusion.
Started in Kenya in 2007, mobile money products and services have gradually taken over several countries in Africa. Mobile money allows people to spend, receive and store money using mobile technology, making it a profitable sector in many sub-Saharan African countries over time. During the COVID-19 pandemic, mobile money helped leading telecoms companies in the region such as MTN, Airtel Africa and Safaricom by providing revenue buffer against business fallout.
According to reports, the consortium, also consisting of Vodafone, Vodacom, and UK’s development finance institution CDC Group, paid $850 million for the license. The Ethiopian government has affirmed that the consortium will create around 1.5 million new jobs and bring $8.5 billion worth of investment to the country’s infrastructure over the next decade. Ethiopian PM Abiy Ahmed had said that it is the single largest Foreign Direct Investment into the country so far. He also noted that the government is in the final stage of initiating a tendering process to offer stakes in Ethio Telecom to private investors as well as citizens.
In addition, Ethiopian officials held a meeting with a delegation from the Kenya government and Trade Mark East Africa (TMEA) on Tuesday to commence the operations of the Moyale One-Stop Border Post (OSPB) in line with the joint inauguration by Kenya’s President Kenyatta and Ethiopian PM Abiy Ahmed on December 9, 2020.