A digital payments service, Onafriq, and the Vodacom and Safaricom-owned mobile phone-based banking services, M-PESA, have signed an International Money Transfer Agreement (IMTA).
In a briefing at the first-ever International Day of Family Remittances in Ethiopia in 2023, the Director General of the Ethiopian Diaspora, Mohammed Endris, stated that remittances make up to 50% of the GDP in some countries.
Founded by Dare Okoujou (CEO) in 2009, Onafriq (formerly MFS Africa) is an African-focused payments company enabling interoperable cross-border and domestic digital payments.
According to World Bank, remittance flows into sub-Saharan Africa stood at $53 billion in 2022, indicating the massive contribution of African immigrants to their home countries.
However, Endris also stated that the diaspora sent home to Ethiopia accounts for only 5% of the country’s GDP and that they are working to double it in the next five to seven years.
This remittance rate is expected to be boosted with the new collaboration between Onafriq and M-PESA. Ethiopians living outside the country sent $4.2 billion in remittances to their country in 2022.
General Manager at Safaricom Ethiopia, Paul Kavavu, noted that the signed agreement would offer Ethiopians in the diaspora a seamless channel to send money to their loved ones at home in Ethiopia, giving a significant boost to the $5 billion the country generates in remittances annually.
Kavavu explained that the company’s goal remains to simplify payments, and integrating International Money Transfer capabilities into M-PESA aligns with that.
A report released in 2022 by GSMA based on data collected between 2013 and 2022 revealed that in countries with mobile money services — known as mobile money countries — the total Gross Domestic Product (GDP) was about 1.5% ($600 billion) higher than it would have been without mobile money.
Onafriq boasts a network connecting over 500 million mobile money wallets and 200 million bank accounts in 40 African markets.
An embedded finance platform provider, Alviere, was selected in January 2024 by Onafriq to enhance payments and remittances from the US into Africa.
