In an exclusive interview, Peter Ndegwa, Chief Executive Officer at Safaricom shares insights on navigating market challenges, future advancements in M-PESA, expansion plans beyond Kenya, support for local tech startups, and the company’s commitment to sustainability and corporate responsibility.
As CEO, what are the biggest challenges you face in maintaining Safaricom’s leading position in the African communications market, and how do you plan to address them?
Our industry is no different from others in the region. We are cognizant that we operate within communities, so what affects the community affects us. The economy continues to pose a challenge to our customers due to inflationary pressures, geopolitical shocks, assertive tax regimes, and uncertainty regarding foreign currency exchange conditions.
To combat these challenging economic times, we continue to push for innovation to cushion against the economic shocks while creating enhanced products and service offerings that meet the needs of our customers. We operate in a complex and heavily regulated environment, where changes in laws or regulatory requirements could adversely impact our business.
To this end, we continue to build and maintain proactive and constructive relationships with regulators and governments, informed by a shared understanding of the need for inclusive economic development. In our shift from a conventional telco to a technology company, we are facing heightened competition both for customers and digital talent from various nontraditional players. We are leveraging this competitive and disruptive environment to deliver innovations that are setting us apart, allowing us to be agile, drive partnerships, and explore new markets while providing our customers with a world-class experience.
Lastly, our customer value proposition is based on the reliable availability of our high-quality network and services. To this end, we have undertaken extensive investment in a robust network architecture driven by customer needs to ensure we always meet customer expectations. In addition, we have strong technology redundancies to minimize technology failures.
Safaricom has been a pioneer in mobile payment systems with M-PESA. What innovations or advancements can we expect from M-PESA in the near future?
M-PESA is a platform that leverages partnerships to enhance lifestyles and financial inclusion. As a Technology Company that puts our customers at the center of all that we do, we continue to innovate and seek partnerships that align with our strategic intent of being a digital lifestyle enabler. Beyond payments, we are advancing M-PESA into a platform offering wealth management, diversified credit, and savings propositions.
We continue to leverage our digital platforms and solutions, such as the M-PESA Super App and Business App, to provide an end-to-end excellent customer experience. With over 9 million Consumer App signins, our platform now offers access to more than 80 mini-apps that span various sectors, including transport & travel, events, and public services.
Additionally, we are committed to foster collaborations with banks, Fintechs, underwriters, fund managers to spur innovation as we enhance our service offerings.
Can you share your vision for Safaricom’s expansion beyond Kenya, and what markets are you targeting next?
To achieve this vision, we will have a focused approach to defending and growing our connectivity and mobile financial services businesses.
As part of our strategy, we will accelerate the transition to TechCo while evolving Ethiopia into a fullscale digital business. We aim to maximize opportunities, particularly in Ethiopia, where we foresee strong commercial progress.
To date, we have made significant strides, now covering 40% of the population and growing our 90-day active customer base to over 4.4 million as of 31st March 2024. In Kenya, with a mature connectivity business, we see opportunities to accelerate smartphone acquisition and expand internet access for all.
In mobile financial services, we are focused on driving financial health. Additionally, in the public sector, we are working to enable digitization to ease the delivery of public services to citizens.
In line with our digital economy agenda, we, together with other industry players, have launched a first-of-its-kind device assembly plant in Kenya. This plant will manufacture smartphones and other devices, making it easier to achieve our digital economy goals.
What steps is Safaricom taking to support and nurture local tech startups and innovation within the African tech ecosystem?
In line with our ambition to be a purpose-led technology company, we launched the Spark Accelerator Program with our partners M-PESA Africa and Sumitomo Corporation. This initiative aims to nurture, grow, and scale commercially viable tech startups that make a positive societal impact by offering them access to product and technology support, market opportunities, and capital. The first cohort, comprising 9 selected startups, has already begun.
As we continue to scale M-PESA, we are continuously enhancing our Daraja platform enabling businesses to seamlessly integrate to M-PESA. The platform currently hosts over 88,000 developers with over 44,000 integrations reflecting on its growing impact.
To foster collaboration and ideation within the tech industry, the Safaricom Engineering Community and Summit have accelerated the acquisition of tech skills and provided a networking platform for tech professionals over the past two years. The Community is now partnering with 10 higher education institutions to train students in ondemand tech skills. Additionally, to create a healthy digital talent pipeline, we have partnered with various organizations from academia, training partners, tech hubs, government, and industry players through the Industry Digital Talent Program. This program focuses on upskilling participants in the digital skills currently in high demand.
Sustainability and corporate social responsibility are increasingly important for companies worldwide. How is Safaricom integrating these principles into its business strategy and operations?
Our purpose of transforming lives and our commitment to society remain at the core of our operations. As part of our dedication to environmental, social, and governance (ESG) initiatives, we have successfully grown 1.5 million trees and converted 23% of our sites to solar power, aligning with our Net Zero target by 2050.
We are continually focused on creating a sustainable business by decarbonizing our operations and advancing the circular economy. Our commitment extends beyond environmental efforts. Through our M-PESA and Safaricom Foundations, we strive to enable Kenyans to access quality healthcare, education, skills, and sustainable employment, thereby providing resources, opportunities, hope, and dignity to communities.
In Ethiopia, our Green Legacy Initiative has seen the planting of over 5,000 trees by Safaricom Ethiopia and its vendors, with a goal of having 40% of our sites powered by solar energy by 2030. We also remain dedicated to supporting Kenyan communities through our passion for sports. For example, our Chapa Dimba football tournament has this year enabled thousands of young Kenyan girls and boys to pursue their passion for the game, becoming one of the most successful sporting events in Kenya.
For more details on our programs and initiatives that positively impact our customers, colleagues, company, and community, the Safaricom Sustainability Report 2024 will be published in October this year.
