Cooling inflation and reduced exchange rate volatility in Ethiopia has handed Safaricom some respite as it eyes turning a profit in the market by March next year.
The lower consumer price index and easing pressure on the Ethiopian currency-the Birr-adds to tailwinds for Safaricom Ethiopia after December’s tariff increase on voice and data services.
Lower inflation and a stable exchange has the impact of raising the value of Safaricom’s assets and earnings in Ethiopia while also helping reduce the operator’s debt service costs.
Inflation in Ethiopia fell to lows of more than seven years to 9.7 percent in December 2025 to reach the National Bank of Ethiopia’s single digit target as per data from the Ethiopian Statistical Service (ESS).
Volatility in the Ethiopian Birr-US Dollar rate has also eased with the currency depreciating at a lower rate of less than one percentage point per month between November 2025 and January 2026.
The improving macroeconomic factors have ended a wretched run that had seen Ethiopia’s economy fall into hyperinflation (persistently higher inflation above 20 percent) resulting in wider losses for Safaricom Ethiopia whose capital expenditure in the country is quantified in US dollars.
Safaricom has highlighted the improvement in the macroeconomic environment as a signal of stability for its Ethiopian business.
“After several years of double-digit inflation, the annual inflation rate declined further to 9.7 percent in December 2025, the lowest level since November 2018 from 10.9 percent in the previous month,” Safaricom said in a trading update.
“This marked the seventh consecutive month of a slowdown in the inflation rate. Overall, the sustained moderation in inflation suggests that the National Bank of Ethiopia’s single-digit headline inflation objective has been achieved.”
Ethiopia advanced forex exchange reforms in the second half of 2025 with the National Bank of Ethiopia (NBE) capping banks’ net forex exposure and reinforcing prudential risk limits.
The operator marked a notable reduction in losses to Sh15.2 billion in the six months to September 2025 from Sh19.4 billion a year earlier.
Chief Finance Officer Dilip Pal noted that prices were too low to enable the company to recoup its investment in setting up the network in the country.
“The return that you are expecting with the depreciation of the birr from 57 units to the dollar in July 2024 to 146 birr means you need price correction. The price levels are way too low and telecoms like us are selling their services, be it data or voice, below cost and that must change,” he said in a November interview.
Safaricom Ethiopia realised revenues of Sh6.18 billion in the six months period from voice, messaging, data and M-Pesa with internet purchases making the lion’s share of the topline or Sh4.1 billion.
