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Digital Ethiopia 2025 Hopes to Streamline Ethiopia’s Economy

Digital Ethiopia
In 2020, less than 19% of the Ethiopian population had access to the internet. The Ethiopian government widely owns Ethiopia’s internet and telecommunications systems, which has been the source of much criticism. The Addis Ababa Chamber of Commerce itself noted that the lack of liberalization in the telecommunications and digital sectors limits competition and dampens efficiency, ultimately stalling the development of the nation. Given that it is one of the fastest growing economies in Africa, Ethiopia’s comprehensive strategy, Digital Ethiopia 2025, has significant plans to bring the country fully into the modern age.

The Digital Landscape in Ethiopia

People in Ethiopia have very limited internet access. On one hand, the infrastructure is not widely organized or well-oiled; outages occur regularly. The cost of an internet package surpassing the actual income of a household is not uncommon in the country. Internet cafes, or hotspots where people can access the internet, are many Ethiopians’ best hope for a fast and reliable access. Hubs are typically located in Ethiopia’s bustling urban regions.

On the other hand, barriers to access are not just structural, but also political. The Ethiopian government’s monopoly on Ethio Telecom has made it difficult to manage access for the entire country. Whatsmore, the state has periodically shut down internet access for political reasons, such as in the aftermath of Āmara president Ambachew Mekonnen. The government’s strict control over telecommunications in Ethiopia not only limits the possibilities of nationwide commerce but also disconnects Ethiopia’s economy from the rest of the world.

Digital Ethiopia 2025

The goal of this new digitization strategy is to bring technology to the people of Ethiopia, as well as to its industries. Digital Ethiopia 2025 focuses on e-commerce and the ability to digitize services in traditionally non-digital industries, like agriculture and manufacturing. Utilizing modern technology to operate in these spaces will create room for investment in agriculture technology. Digitization in the public sector, such as the implementation of a national ID database, would mean a boost in efficiency as Ethiopians all around the country connect to the internet through one streamlined system.

The other big push that Digital Ethiopia 2025 is championing is the privatization of the telecommunications sector. The government’s explicit control over media and news, internet traffic, and trade via telecommunication not only pose threats to privacy but also limits competition. The original plans to sell a large stake of government-held Ethio Telecom ended up on hold in May 2020, largely due to economic shifts as a result of COVID-19. However, moving forward with plans will likely be the key to advancing the market capacity of Ethiopia’s telecommunications sector and the economy as a whole.

Looking Ahead

Digital Ethiopia 2025 is Ethiopia’s first major step towards a more connected and efficient economy, as well as towards more protections for Ethiopians and their access to information. These efforts are critical to modernizing the economy and creating a self-sustaining digital sector.

 – Hannah Yonas
Photo: Flickr

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7 Facts About Ethiopia’s Economy

Ethiopia's Economy
Ethiopia is the second-most populous country in Africa with an estimated population of 112 million people. Ethiopia also has the fastest growing economy on the continent and is located on the east coast. In 2015, the World Bank reported 23.5 percent of Ethiopia’s population to be living under the national poverty line, however. As of 2019, its GDP is expected to grow between seven and eight percent in the next year in large part due to Prime Minister Dr. Abiy Ahmed Ali, who proposed large scale economic reforms in June 2018, two months after assuming office. The following facts about Ethiopia’s Economy give a closer look at the country’s development in recent decades.

7 Facts About Ethiopia’s Economy

  1. Prior to 2018, the state primarily controlled the Ethiopian economy, which was in line with the beliefs of its dominant political coalition, the Ethiopian People’s Revolutionary Democratic Front (EPRDF). In 2018, however, Prime Minister Dr. Ali, chairman of the EPRDF, announced that it would allow private investors into some of its monopolies, beginning with select airlines, electricity and telecommunications. Ali and the EPRDF found this shift necessary to spur economic growth according to the government.
  2. Agriculture, textiles, minerals and metal processing are the largest industries in Ethiopia. According to the CIA World Fact Book, the country can trace 40.5 percent of its GDP to the export of coffee, vegetables and sugarcane. Recently, foreign investment in flower, wine and textile industries have become major contributors to the Ethiopian economy as well.
  3. Despite this, Prime Minister Ali has declared his intention to move Ethiopia’s agriculture-based economy into manufacturing, which he announced in a national plan titled Vision 2025. The goal of the plan is to create more than two million jobs and grow the manufacturing industry to 25 percent of Ethiopia’s economy. The idea is for Ethiopia to position itself as a viable contender for low wage jobs to foreign companies in need of labor.
  4. Infrastructural development is also an integral player in the expansion of the Ethiopian economy. Vision 2025 also details the timeline for the creation of 10 new public industrial parks as well as six others to be completed by private developers, bringing at least 60,000 jobs to the area. The sites will receive supplementation in the form of free water, subsidized rent and electricity. To this end, the government has created the Industrial Parks Development Cooperation to oversee the project, and communicate with potential investors. This initiative has been rather controversial to date, however. Strikes erupted at Hawassa Industrial Park, which opened in 2016, due to low wages and unsafe working conditions.
  5. Another significant infrastructural development has been the light rail, the first transportation system of its kind in sub-Saharan Africa. Since its completion, the metro has allowed more than 60,000 people easier access to urban centers where they are more likely to find work or able to attend school for $.027 a ride.
  6. Ethiopia’s potential as an energy provider superpower can not only be seen by its light rail, which relies on hydropower, but also by its large stake in the Ethiopian Renaissance Dam, which once completed, will be largest in the continent. It has been under construction since 2011 but will be able to generate 6000MW of electricity, serving not only Ethiopia’s water and hydropower needs but those of 10 other countries as well.
  7. As a rising global economic powerhouse, Ethiopia also has a great interest in expanding its tourism industry. With multi-billion-dollar investments spread across industrial parks and transportation, Prime Minister Ali announced his intentions to no longer African citizens require visas to enter the country. The plan to expand the Bole International Airport so it can serve 22 million people, more than triple the number it accommodates today, accompanied this.

The economic reforms and rapid, large scale infrastructural development happening in Ethiopia today are a promising start to reducing its poverty levels worldwide. Internationally, others recognize Ethiopia’s efforts too; the World Bank pledged $1.2 billion of support in 2018. These seven facts about the Ethiopian economy highlight the government’s rightfully ambitious initiatives— sure to result in a more advanced country supported by the creation of hundreds and thousands of jobs it requires to continue to thrive.

– Jordan Powell
Photo: Flickr