The announcement came seven months after Safaricom became the first private telecommunications operator in Ethiopia, ending a monopoly under state-owned Ethio Telecom.
"This is the first mobile money license granted to a foreign investor in Ethiopia," the National Bank of Ethiopia said in a statement.
"The NBE will continue to take measures to deepen Ethiopia's digital finance ecosystem. To this end we will strongly support the spread of digital payment systems as a substitute for cash-based transactions within the economy."
Ethio Telecom already offers a mobile money transfer service called Telebirr, named after the national currency, the birr.
Safaricom first launched its mobile money service known as M-Pesa in Kenya in 2007 and it has become an indispensable tool for paying bills and transferring money.
The system is now used by 51 million people in seven African countries, according to Safaricom, which estimates that M-Pesa generates about 40 percent of its profit.
The company said it paid $150 million for the license in Ethiopia and aims to launch the M-Pesa service there in the second half of this year.
Safaricom switched on its telecommunications network in Ethiopia in October last year and said it now has 2.1 million customers, with a goal of reaching 10 million next year.
In February, the Ethiopian government said it planned to sell up to 45 percent of Ethio Telecom, part of an economic reform package that Prime Minister Abiy Ahmed announced after coming to power in 2018.
But the economy has deteriorated sharply in recent years and the will to continue the reforms has largely stalled.
Safaricom Cleared for Ethiopia Business
ADDIS ABABA - Ethiopia's central bank said on May 11 it had issued a mobile money license to Kenyan telecoms giant Safaricom, the first granted to a foreign company in Africa's second most populous country.
