New Safaricom Ethiopia CEO takes on big growth targets

Pan-African telecommunications company Safaricom has announced that the CEO of its Ethiopian business, Anwar Soussa, is to leave his post at the end of the July. Soussa will be replaced by Wim Vanhelleputte, a former operations executive at MTN Group, Africa’s largest mobile network operator.

This reshuffle in Safaricom’s Ethiopian leadership team comes shortly after the company was offered a “mobile money service licence” by the National Bank of Ethiopia. Under the terms of this licence, which was granted in May, Safaricom is permitted to offer its M-Pesa service in Ethiopia, which the Nairobi-based company operates alongside global giant Vodafone.

M-Pesa is a mobile banking service which allows users to conduct transfers and store funds via their mobile phones and has played an important role in allowing unbanked populations in Africa to access financial services. Safaricom is the first foreign entity to be granted such a licence in Ethiopia, as the government led by Abiy Ahmed continues to pursue a policy of liberalisation and privatisation in strategic sectors.

This was widely seen as a success within the Safaricom leadership which, in October 2022, announced plans to invest $300m a year into Ethiopia until 2032, having already invested $1.2bn. Fewer than 40% of Ethiopia’s 120m population have a mobile phone and Safaricom believes that it could be in prime position to generate significant returns in a newly liberalised market.

However, Safaricom’s investment in Ethiopia has also proved controversial among some shareholders. The company’s latest earning report, released in May, showed that profits dropped more than 22% year-on-year, meaning profits have been in decline for three consecutive reports.

Safaricom’s sizeable investments in Ethiopia have eaten into the company’s margins, with sluggish economic growth globally also contributing to profit declines. On the Nairobi Securities Exchange, where Safaricom is listed, the company’s share price has declined by almost 30% since the start of the year alone. At time of writing, Safaricom is trading at KSh17.40 ($0.12).

Vanhelleputte will therefore need to convince shareholders of the opportunities available in the East African country and demonstrate a path to profit growth. Safaricom Ethiopia generated $4m in revenue in the last financial year, having started operations in October 2022.

Vanhelleputte will be tasked with substantially expanding the company’s userbase – which currently stands at about 3m – and successfully overseeing the beginning of M-Pesa services in order to drive higher revenues.

Safaricom stated that Vanhelleputte “brings extensive leadership experience and deep industry knowledge, having worked in the telecommunications industry across multiple markets in sub-Saharan Africa for over 25 years.”

He joins Safaricom Ethiopia from MTN Group, where he was the operations executive – markets since August 2022 and he was responsible for the performance and governance of four operating companies in West and Central Africa. Immediately before this, he served as the chief executive officer of MTN Uganda, a role he held from 2016.

Vanhelleputte will take up his post at the start of September 2023.