Safaricom Ethiopia, has reported KES 7.2 million ($43,368) in M-PESA revenue just three months after its launch in August 2023, having garnered an M-PESA customer base of 1.2 million users, with 67% actively utilizing the mobile money product.
The success includes the registration of 22,700 M-PESA agents, facilitating transactions amounting to 2 million in volume, and valued at KES 43.7 billion ($287 million). In contrast, M-PESA in Kenya, operational since 2007, showed a 16.5% year-on-year revenue growth, reaching KES 66.23 billion ($436 million). This growth was supported by a 12.0% year-on-year increase in average revenue per user (ARPU) to KES 344.05 ($2.26).
However, Safaricom Group’s overall earnings for the first half of 2024 declined compared to the same period in 2023. This drop in profits is attributed to increased financial strain on customers, higher taxes, and currency devaluation in Ethiopia. Despite Safaricom’s $400 million investment in the Group, which includes Safaricom Kenya and Ethiopia, the new market operations are yet to yield positive returns.
The group’s profit after tax for the first half of 2024 was KES 27.187 billion ($179 million), down from KES 30.229 billion ($199 million) recorded in the previous year. In contrast, Safaricom Kenya’s profit after tax grew to KES 40.609 billion ($267 million) in the same period, up from KES 35.732 billion ($235 million) in 2022.
Safaricom commenced its entry into the Ethiopian market in October 2022, following a bidding exercise where the company, partnered with Vodafone Group, Vodacom Group, Sumitomo Corporation, and British International Investment (BII), secured the winning bid of $850 million. M-PESA was officially licensed by Ethiopian authorities in May 2023 at $150 million, allowing operations to commence in August 2023.
Safaricom Kenya CEO, Peter Ndegwa, acknowledged the challenging economic conditions, saying, “the period under review was challenging for the business, our consumers, and the country at large.”
Ndegwa was, however, satisfied that Saficom Ethiopia’s “performance has been exceptional despite these strong headwinds caused majorly by strong economic headwinds,”