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Mobile money transfer: ‘Ethiopia hasn’t shut the door to M-Pesa’

By Quentin Velluet
Posted on Wednesday, 7 October 2020 02:22

m pesa kenya
Customers make money transfers at an M-Pesa counter in Nairobi, Kenya, as others wait outside. (AP Photo/Sayyid Abdul Azim)

Myriam Said has been working behind the scenes at the office of Prime Minister Abiy Ahmed since 2018. The digital transformation adviser to the Ethiopian Prime Minister talks to The Africa Report about Ethiopia’s priority projects in the area of connectivity and digital entrepreneurship.

This physicist by profession and graduate of the University of Provence Aix-Marseille was at the helm of an Ethiopian fintech start-up for eight years. She went on to become director of the Digital Transformation Program at the Ministry of Innovation and Technology for nine months before joining the Office of the Prime Minister last February.

She currently advises the office on strategic matters related to digital technology, ranging from liberalising the telecoms sector to drawing up a start-up act, not to mention fostering openness to foreign investment.

In Ethiopia, only 24% of the population has internet access, making it one of the least connected countries on the continent. What should be done to bridge this gap?

Myriam Said: We still lack telecommunications infrastructure, especially towers [there are 8,000 today, but about 10 times that number are needed] to connect rural areas to the internet. This is one of the reasons why the government decided to liberalise the telecoms sector and privatise a portion of Ethio Telecom, two processes that are currently under way.

READ MORE Ethiopia prepares for partial privatisation of Ethio Telecom

We’re behind, but that shouldn’t obscure the fact that we’ve accomplished a significant amount of work this past decade. Our main achievement was the installation of 35,000 kilometres of fibre optic cables, which means our country has a solid infrastructure backbone. To date, between 80% and 85% of Ethiopia’s major cities are connected to the fibre optic network.

Two licences for telecommunications operators were originally set to be issued in March 2020. As of today, they are scheduled to be issued in the first half of 2021. What’s behind this postponement?

The postponement is for purely administrative reasons. The Ethiopian Communications Authority [ECA] is still in its infancy and we need to strengthen its skill set by continuing to hire more professionals and by developing various regulatory frameworks. At this time, the ECA is working, for instance, on developing a universal telecommunications service.

In April, while the Kenyan telecoms giant Safaricom was in talks with the Ethiopian authorities to launch its M-Pesa app, the country’s central bank, the National Bank of Ethiopia, decided to only allow locally-owned non-financial institutions to offer mobile money services. Why?

Unlike Kenya, where the telecoms sector has influence, Ethiopia is a country in which banks have clout. Ethio Telecom can’t, for example, launch its own mobile banking service. It has to create a joint venture with a banking institution and form a company specific to that project.

READ MORE Ethiopia further opens up sectors to diaspora and foreign nationals

So, we didn’t shut the door to M-Pesa. Instead, we’ve asked them to partner with an Ethiopian bank.

You’re working on drawing up a law that facilitates the growth of digital start-ups. What measures does it propose?

This draft law establishes three main measures. The first concerns tax exemptions for businesses and all other players, such as incubators, taking part in the growth of the digital economy.

The second concerns support structures and aims to provide them with a legal framework so that they are recognised by the government and, in particular, able to receive local and foreign funding.

Lastly, we plan to set up a regulatory sandbox that will give start-ups more freedom so that they can test their concept for a period of time in which they won’t necessarily have to comply with all the regulatory requirements applicable to their sector.

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