East African mobile payment giants trapped in the government's iron curtains and the dark abyss
Author:Sleepy.txtWatching
In China, mobile payments are a revolution about convenience. The blue and green two-dimensional code has turned mobile phones into our digital wallets, both in popular cities and in remote villages. In our perception, mobile operators (mobile, telecommunications, connectivity) are defined as mere “flow pipelines”, and real finance and payment games take place between the two giants, the ants and the communicators。
But if you cross the Indian Ocean and set foot on the red land of East Africa, that business logic will be crushed in an instant。
HERE, OPERATORS ARE NOT CONDUITS, THEY ARE BANKS; SIM CARDS ARE NOT COMMS, THEY ARE BANK CARDS. WHOEVER CONTROLS THE COMMUNICATIONS NETWORK HAS THE FINANCIAL LIFELINE OF A COUNTRY. IT WAS THE TEMPTATION OF THE "LIFE-LEVEL" THAT LED TO AN EXTREMELY CRUEL HUNTING。
In December 2025, the African mobile payment giant M-Pesa was personally killed in Ethiopia by the National Team。
M-Pesa has launched a highly ambitious Internet-wide product, "M-PESA LeHulum", in order to break the flow between operators. In the local language, “LeHulum” means “for everyone”. It was an experiment with a strong financial inclusion that M-Pesa wanted every Ethiopian with a mobile phone to be free to transfer and pay。
However, the product survived only a few days。
Less than a week after the launch, Ethiopia's telecommunications master, the State-owned giant Ethio Telecom, went down and blocked M-PESA's mobile data access. In the face of absolute administrative will, the finer business logic is no match for the line that has been removed directly。
Why should the "national team" take on the name of the innovation and kill foreign capital
The answer lies in that set of ruling data: Ethio Telecom, the Ethiopian Crown Prince, and the payment platform under its banner, Telebir, are a huge and unmistakable thing. It is home to 54.8 million users and controls nearly 90 per cent of the country's market share, with an annual turnover of $43 billion。
For such an enterprise, when M-Pesa tried to bypass the barrier to connect all users, it saw no longer as a rival, but as a predator who tried to infiltrate the national treasury and carry a financial lifeline。
In the commercial world, data sometimes lie, but the contrasts from common sense often point to the truth。
According to the number of users, Safaricom appears to be a quick hit into the Ethiopian market. In just one year, the number of users rose by 83.7 per cent, crossing the 11.1 million threshold. At the other end of the financial statements, however, M-Pesa ' s payments fell by 45.6 per cent。
This contrast reveals the cruel truth under the Iron Curtain that the users can only use foreign operators as a cheap Internet card for wool, while the National Team remains in their hands as it relates to storage and liquidation operations。
Ethiopia under the Iron Curtain
In July 2025, a report by the World Bank called the Ethiopia Telecommunications Market Assessment torn the final veil of the local market。
According to the objective statement of the report, the Kenyan giant Safaricom is like a hunter who broke into the original forest and thought that he possessed advanced weapons, but did not know that he had fallen into a carefully designed trap。
The first trap is the ticket. To get this ticket to Africa’s second-largest population, Safaricom paid $1 billion in day licence fees for 15 years of operating rights and moving payment plates。
This means that even if a company cannot sell a flow pack, it will carry a fixed amortized cost of approximately $66.7 million per year. And Ethio Telecom, a rival state-owned enterprise, costs zero to get the same license。
The second trap is the settlement mechanism known as MTR (mobile terminal rate). The logic of this mechanism is simple: when the users of A are calling the users of B, A is required to pay a pass fee to B. Since Safaricom is a new player, almost every phone that its users allocate to Ethio Telecom Nagon。
The World Bank estimates that Safaricom will pay almost $20 million a year to the largest competitor. In addition to Ethiopia's lack of an independent third-party iron tower company, Safaricom had to rent Ethio Telecom's base station and fibre-optics to lay its own network, and their commercial competition became a funny parasitic relationship: Safaricom was giving blood to its largest competitors every time a new user was developed, with one kilometre of fibre-optic laid。
Even with such a heavy shackles, Safaricom has torn a mouth with better service, and the number of users has gone through millions. The Ethiopian side has begun to use administrative means to de-escalate the country’s rivals, as the “soft knife” failed to kill them。
At the tax level, the Government requires that all transactions involving the Government take place first and foremost through Telebirr. Safaricom, as a large taxpayer, was asked to use the payment system of Telebirr, a competitor, when paying taxes to the Government。
During the flow price battle, Ethio Telecom lowered the data price to about $0.16/GB. This is nearly 40 per cent below the African average (US$ 0.25/GB)。
The World Bank has characterized this strategy as “predatory pricing”, which uses the monopolistic position of State enterprises and their capacity to absorb losses, deliberately setting prices below the cost line and crowding out competitors with tight financial chains。
In December 2025, when M-Pesa tried to complete the final breakout through the LeHulum application, Ethio Telecom finally lost its last patience. It's no longer in circles, no more rules. The unearthed line became the end of this year's hunt。
Why is the Ethiopian Government so radical and willing to destroy the global commitment to liberalization of telecommunications
On the power board in Addis Ababa, mobile payments have never been an option for “facility”. The core of life lies in two words: foreign exchange and surveillance。
Ethiopia receives up to $6 billion in remittances each year through underground channels, with Hawala (Hawara) the most troubling for the Government, which is home to the ancient underground banks in the Middle East and Africa, which do not rely on banks, rely entirely on interpersonal credit endorsements and completely bypass the surveillance radar。
Telebirr is not just a wallet for the Ethiopian government, which is extremely deprived of foreign exchange, but a "financial catcher". Through this official channel, the Government urgently needs to nationalize every cent of the dollar scattered among the population。
The more hidden ambition is the central bank digital currency (CBDC). In the Government ' s ambitious vision, Telebirr, with a population of 54.8 million users, will be the only legal export for future digital currency issuance. In the logic of power, the financial infrastructure must be in its own hands and no foreign investment should be allowed to draw on the country ' s credit base。
However, is this "absolute sense of security" based on the Iron Curtain really a return to prosperity
In July 2024, Ethiopia implemented monetary reforms, which resulted in a sharp drop of nearly three times the local currency exchange rate. Ethio Telecom's foreign exchange losses jumped from 3 billion Bills to 42 billion Bills in an instant due to the huge dollar debt of Chinese-owned, middle-heavy suppliers, and increased by 1825%, resulting in a 70% collapse in post-tax profits。
This is the true picture under the Iron Curtain, where governments stifle competition for security, where foreign investment bleeds in unfair rules, and where national firms are seriously injured by exchange-rate storms. For ordinary users, they have no choice but to continue to use their custom applications。
Freedom in Kenya
Since Ethiopia's iron curtain was suffocating, would Kenya next to the free market be a promised place for commerce? After all, this is M-Pesa's home, and it's the proudest camp。
Here, M-Pesa doesn't have to face any administrative closure. It accounts for 90 per cent of the market share, and nearly 60 per cent of Kenya's GDP is flowing through this network. It is not only a payment tool, but also a hydroelectric coal in the financial system of the country。
But when regulation is chronically absent, this absolute freedom eventually becomes absolute chaos. M-Pesa, the conduit to inclusive finance, is now a criminal highway out of control。
First on this highway is gambling. In Kenya, the lottery is a tacit gold-eating giant, while M-Pesa is its largest financial channel, with approximately $1.5 billion (1691 billion Kenyan shillings) annually flowing through M-Pesa's network。
The Government of Kenya, which relies heavily on the huge tax revenues provided by the gaming industry, has opened its eyes to funding sources, making M-Pesa a haven for criminals. The Government collected taxes, the lottery company made money, and M-Pesa charged fees. In this perfect business circle, only social security is paying。
What scares ordinary people more than money-laundering is widespread fraud. In 2024, M-Pesa-related fraud losses increased sharply, by 344 per cent. M-Pesa has 30 million users in this country, and more than 80 per cent of them have been targeted by fraud syndicates。
And now the trick has been repeated several times, and they are no longer satisfied with stealing the balance from your wallet, but they are simply stealing your identity for a loan。
The most typical case is the attack on the loan services offered by Safaricom. Criminal groups have obtained 123,000 SIM cards by illegal means, using M-Pesa ' s letter-of-assist loophole to apply for overdraft loans on a large scale, and millions of dollars have been lost instantaneously。
Why can criminals pass identification so precisely? The answer points to inside Safaricom。
In 2024, the company dismissed 113 employees in one breath on the grounds of involvement in fraud. Those in-house who have user privacy data and back-office access are becoming a key link in the black chain of industry, and any sophisticated technical firewall is thin in the face of human greed。
Common underground roots
As we try to explain Ethiopia's iron curtain and Kenya's abyss with civilized business logic, the deeper and more disturbing world beneath the surface is often overlooked。
Technology is neutral, but not human。
In the Tigray region of northern Ethiopia, illegal gold mines are spreading like cancer on the wasteland. According to the survey, in the vast mining areas that even satellites can overlooking, a legitimate order has long been put behind it, replaced by a network of violence woven by mysterious foreign investment and local armed forces。
The mysterious “foreign investors” provided millions of dollars to buy heavy excavation equipment; the local military forces were responsible for guarding the mines, turning them into independent nations。
Every day, thousands of miners work at gunpoint, and the gold extracted does not enter the central bank's vault, but is constantly flowing through military-controlled smuggling lines to the Sudan or the United Arab Emirates, making billions of dollars in black money。
Facilities such as distributive, instantaneous, low-cost, multi-paying facilities are borrowed from mobile payments, and large amounts of smuggling money are turned to zero, returning silently. At the temptation of a gold price breakthrough of $4000 per ounce, the so-called inclusive finance became the most efficient harvest tool for illicit mineral realization。
It's harder to track than gold, it's cash. Ethiopia receives up to $6 billion annually in remittances that support the livelihoods of countless families. But because of the huge difference between the official and black market rates of about 15 per cent, the vast majority of the money went to Hawala instead of going to the bank。
The Central Bank of Ethiopia, in an effort to combat money-laundering, has raised the profile of Somali remittance companies, accusing them of financing illegal activities, but formal banking outlets are scarce for the poor in remote areas, and these underground networks are their only option。
If you block it, you cut off the lives of the poor; if you let it go, it is the hotbed of terrorists and money launderers. In this vast mobile payment network, with 118 million dormant accounts, funds flow like mercury, and there is no oversight。
If gold and money-laundering were merely a game of money, blood would flow at the other end of the mobile payment network。
In 2022, 29 bodies were found in an abandoned truck in the forest in northern Malawi. They were young Ethiopian men who had tried to smuggle through that notorious southern route to South Africa in search of life and had eventually died of suffocation。
This is not just a simple case of smuggling, and surveys show that mobile payment techniques are inadvertently reshaping the business model of the bloody industry of human trafficking。
In the past, snakeheads demanded a one-time cash payment with high risks and high thresholds. And now, using tools such as M-Pesa, criminal gangs have developed a stowaways model of "payment in instalments". The real-time nature of mobile payments allows snakeheads to manage human trafficking as they manage supply chains, and which station to pay. Once a family transfer is not paid, it is abandoned, ill-treated and even killed who are waiting for the stowaways。
Whether Ethiopia is trying to monitor everything with an iron curtain or Kenya is trying to connect everything with freedom, underground undertows can always find cracks that know no boundaries and do not care about institutions。
The highways built by M-Pesa and Telebir are not only running for the ideal of inclusive finance, but also for money-laundering, smuggling and human trafficking. The technology fixed the road, but it could not control whether the car on the road was carrying life-saving food or cold bodies。
Choice of capital
In the face of such a distorted and fragmented East African market, the smell of international capital is always the most sensitive and cold。
In December, the South African telecommunications giant Vodacom announced an amazing decision, throwing $2.1 billion, to increase the shareholding of Safaricom from 35 per cent to 55 per cent, taking absolute control。
But this is by no means an ambitious attack, but rather a defense of despair. Safaricom's home-grown business in Kenya is still a cash cow, with net profits of 58.2 billion shillings (approximately $450 million) in the first half of 2025, of which M-Pesa contributes half the mountain. But in Ethiopia, it is bleeding at an alarming rate。
According to the financial statements, Safaricom Ethiopia lost 15.5 billion shillings in only six months, and M-Pesa ' s operating income fell by 45.6 per cent。
This has plunged Vodacom into extreme passivity, and it cannot watch Ethiopia's bottomless hole, dragging down Kenya's money-changing tree。
Vodacom broke down the heavy cash holding stock at this time with the clear intention that it would need to be directly involved in management through absolute holding. Either the losses were stopped by force in Ethiopia or the business was reorganized using its transnational resources. This $2.1 billion, in essence, is a life-saving payment to keep the base base of the profits of Kenya。
The choice of another shareholder, Sumitomo Corporation, is more early than that of Vodacom, who was forced to take over in order to preserve Kenya. As the second-largest shareholder, a resident bought a 10-year political risk insurance policy for his investments in Ethiopia。
This policy, which does not cover business losses, specifically covers "government confiscation of assets" "currency non-convertible" and "risk of default"。
In the international investment community, this was seen as the highest red warning. Even after years of deep cultivation in Africa, the Nippon Foundation has lost faith in the rule of law environment. In their plans, the government has turned its assets or currency into waste paper, no longer "if" but "anytime"。
However, the giants of the old world may all have miscalculated one thing. They are also fine-tuning the market share of the local French currency, and the stabilization currency is deconstructing everything in a downward blow。
When Kenyan software engineers began to demand stable currency payments to fight inflation, when Ethiopian rich people used stable currency to bypass foreign exchange controls to transfer assets, M-Pesa, the very foundation for survival, the local currency system, was breaking down from within。
What users need is no longer an electronic wallet that saves a devalued currency, but a digital dollar that preserves value. In Ethiopia, even if the Government strictly prohibited, the volume of stable currency transactions in retail continued to rise in reverse by 180 per cent。
Vodacom spent $2.1 billion on it, perhaps just an expired ticket to the old world. And the ships of the new world left the port early。
Third way
In this ancient and agitated land of East Africa, mobile payments are written in unprecedented gestures about the most violent confrontation in the history of human commerce. But the kernel is a game history about power and greed。
On the one hand, the Ethiopian-style "sealed" to protect financial sovereignty with executive towers, while inadvertently stifling the possibility of a future; on the other hand, the Kenyan-style "run" to crush a safe red line with market hooves, turning ordinary people into lambs to slaughter。
This is the craziest part of the African mobile payment revolution: It makes financial flows as simple as they ever were, while making the lives of ordinary people more complex than they ever were。
Those who shouted revolution talk about changing the world in their capital glasses. Those who actually lived on that land had to face digitized fraud, trafficking in persons in instalments and a line that could be removed at any time。
Between the iron curtain and the abyss, the third road has not yet appeared。
We had hoped that technology would be unfair, but eventually it was just a magnifier. It magnifies the arrogance of power and the wildness of capital。
On board the ship to the new world, we need not only a fully powered engine, but also a cable called the "underline" that is ignored by everyone. Otherwise, this vast digitalization process, which is ultimately left to the times, may not be an all-embracing monument, but a pile of expensive debris。
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