24th October 2024, Addis Ababa: Ethiopia's digital economy could add more than ETB 1.3 trillion to GDP by 2028, according to new GSMA report:Report on the digital economy in Ethiopia: Opportunities, policy reforms and the role of mobile telephony'. The report highlights how telecommunications reforms and investments in mobile technology are catalyzing growth in key sectors such as agriculture, manufacturing and utilities. These advances are expected to create more than 1 million new jobs and generate an additional ETB 57 billion in tax revenue by 2028.
Ethiopia is a pioneer on the path to digital growth
Ethiopia's telecommunications reforms under the National Economic Reform (HGER) program have driven significant progress. By 2023, the sector contributed 700 billion ETB to GDP and generated 57 billion ETB in tax revenue. Mobile Internet connections grew by 65% and 4G coverage multiplied by eight. Key players Ethio Telecom and Safaricom Ethiopia have been instrumental in driving this growth through increased mobile Internet access and greater competition in the telecom market.
Key findings and economic impact
According to the report, by 2028, more than 50 million Ethiopians (almost double the current numbers) are expected to be connected to mobile Internet. Greater connectivity will drive growth in sectors such as agriculture, which will add 140 billion ETB, and manufacturing, which will contribute 114 billion ETB by 2028.
However, a substantial gap in usage remains: 76% of the population still does not use mobile Internet despite living within network coverage. Closing this gap, particularly the 40% gender disparity in mobile internet usage, is crucial for Ethiopia's digital future. With targeted policy reforms, this gap could be reduced to 66% by 2028, allowing millions more Ethiopians to get online.
Mobile money and financial inclusion
Mobile money, with 90 million registered accounts and 70% penetration, is a crucial driver of financial inclusion. As these services grow, they will play an increasingly important role in driving digital and financial inclusion, further contributing to the country's economic development.
Key policy recommendations to accelerate Ethiopia's digital transformation
To fully realize the potential of digitalization in Ethiopia, the GSMA outlines several critical policy recommendations, including:
- Prioritize service affordability.Reducing sector-specific taxes will go a long way to addressing mobile service affordability in Ethiopia.
- Accelerated telecommunications reforms: Expedite rights of way and planning approvals to accelerate infrastructure development.
- Improve device affordability: Reducing taxes and customs duties on mobile devices will help make smartphones more affordable for low-income households, allowing more Ethiopians to access mobile Internet services.
- Expand mobile money services: Strengthening regulatory support for mobile money services is essential to boost financial inclusion. Ethiopia has already made significant progress, with more than 90 million mobile accounts registered by 2024.
- Boost digital skills and government services: Supporting digital literacy and expanding e-government services will help increase the adoption of digital technologies, particularly among underserved communities, such as rural populations and women.
Empowering Ethiopia's future through connectivity
Digitalization is key to advancing Ethiopia's Vision 2025. Mobile technologies will boost productivity in agriculture and other sectors, creating new opportunities across the country.
Angela Wamola, Head of Sub-Saharan Africa at GSMAcommented: “Ethiopia is well positioned to be a digital leader in East Africa. By implementing strategic reforms and improving access to digital tools and services, Ethiopia can unlock unprecedented opportunities for economic and social development. This will benefit not only the economy but also the millions of Ethiopians who will benefit from greater digital inclusion.”
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About the GSMA
The GSMA is a global organization that unifies the mobile ecosystem to discover, develop and deliver critical innovation for positive business environments and social change. Our vision is to unlock the full power of connectivity so that people, industry and society thrive. Representing mobile operators and organizations across the mobile ecosystem and adjacent industries, the GSMA offers its members three broad pillars: connectivity for good, industry services and solutions, and outreach. This activity includes advancing policy, addressing today's biggest societal challenges, supporting the technology and interoperability that make mobile devices work, and providing the world's largest platform to convene the mobile ecosystem at the MWC and M360 series of events.
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