James Wainaina, MasterCard’s vice president and area business head for
the East African region says the firm’s entry into Somalia is in line
with its broad growth strategy for sub-Saharan Africa. PHOTO | FILE |
NATION MEDIA GROUP
By James Anyanzwa and Isaac Khisa, The EastAfrican
In Summary
- The launch of MasterCard payment system in Somalia is expected to open the country’s economy to electronic transactions both in government and private sector.
- Planning minister says the partnership signals Somalia's financial liberation after years of exclusion from the global economy.
MasterCard has become the first
international payments network to enter Somalia through partnering with
Premier Bank Ltd, signalling a huge business potential in a country that
has long been shunned by Western powers due to perpetual wars and
conflicts.
The US-based technology firm is eyeing growing
volumes of remittances estimated to contribute over $1 billion to
Somalia’s economy and 35 per cent of the total value of goods and
services produced in the war-ravaged state in a year.
The funds are an essential source of income for individuals and necessary for the development.
James Wainaina, MasterCard’s vice president
and area business head for the East African region said the firm’s
entry into Somalia is in line with its broad growth strategy for
sub-Saharan Africa.
“We recognise that there are challenges in
this market (Somalia) but for me it is about opportunities. The market
is continuing to open opportunities emanating from remittances from the
diaspora, non-governmental organisations (NGOs) and donor funded
activities,” Mr Wainaina told The EastAfrican through a phone interview last week.
“There are no restrictions in terms of working
with Somalia and from our perspective we engage with a market because
there is a need. Basically there is a huge drive in digitising the
Somali economy in line with global trends.”
Mr Wainaina however acknowledged that there are challenges of having an effective payment infrastructure.
The launch of MasterCard payment system in
Somalia is expected to open the country’s economy to electronic
transactions both in government and private sector.
MasterCard currently has a presence in Kenya,
Uganda, Tanzania, Rwanda, Burundi, Zanzibar and South Sudan, and the
firm is sniffing for more business opportunities from the rest of Africa
through partnerships with local financial institutions.
The firm’s partnership with Somalia’s
privately-owned Premier Bank was announced at the World Economic Forum
in Cape Town, South Africa last week.
Premier Bank, which has only two branches in
the capital Mogadishu, will now issue and accept MasterCard branded
payment cards in Somalia, a country that has never had any form of
formal banking service since the collapse of the government and
financial services system in 1991.
“Somalia has made significant strides to
rebuild the country and instil peace and stability,” said Abdirahman
Yusuf Ali Aynte, the country’s Minister of Planning and International
Co-operation.
Mr Aynte said the partnership signals Somalia's financial liberation after years of exclusion from the global economy.
The latest development means that government agencies in Somalia have a platform through which to transfer salary disbursements.
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