Report Highlights Ethiopia’s Potential as Leader in East Africa’s Digital Transformation

ADDIS ABABA — Ethiopia is emerging as a potential digital leader in East Africa, with the nation’s digital economy projected to contribute over 1.3 trillion Birr to its GDP by 2028, according to a recent report by GSMA. This report, released in collaboration with Ethio-telecom, outlines Ethiopia's significant strides in digital transformation and the advancements made in its telecommunications sector.

Over the past five years, Ethiopia has made substantial investments in its digital infrastructure, successfully rolling out advanced 4G networks and launching 5G services in Addis Ababa and four other regional cities. The country’s Home-Grown Economic Reform (HGER) initiative, alongside strategic investments from Ethio-telecom and Safaricom Ethiopia, has led to an expansion of mobile network coverage, fueling rapid digital growth.

At the report's launch event, Ethio-telecom CEO Frehiwot Tamiru emphasized the telecommunications sector's vital role in bolstering economic growth through digitalization. "Telecom investments are catalyzing growth across various sectors, including agriculture, manufacturing, and public services, contributing to Ethiopia's steady economic rise," she stated, highlighting the interconnectedness of telecommunications and economic development.

The GSMA report projects that ongoing advancements in Ethiopia's digital landscape will create over one million new jobs and generate approximately 57 billion Birr in tax revenues by 2028. By 2023, the telecom sector has already made significant contributions, adding 700 billion Birr to GDP and generating 57 billion Birr in taxes. Furthermore, mobile internet connections have surged by 65%, with 4G coverage expanding eightfold, primarily due to increased competition and investments from key players like Ethio-telecom and Safaricom Ethiopia.

Caroline Mbugua, GSMA's Senior Director of Public Policy for Sub-Saharan Africa, noted that Ethiopia experienced an impressive average GDP growth of 10% over the decade leading up to 2019. With projections indicating that 50 million Ethiopians will be connected to mobile internet by 2028—nearly double the current figure—enhanced connectivity is expected to drive significant growth across various sectors. This growth is projected to add approximately 140 billion Birr to agriculture and 114 billion Birr to manufacturing.

Moreover, with 90 million registered mobile money accounts and a penetration rate of 70%, mobile financial services are becoming increasingly integral to fostering financial inclusion in Ethiopia. As these services continue to expand, they will play a pivotal role in boosting both digital and economic inclusion within the country.

To fully capitalize on Ethiopia's digital potential, the GSMA has outlined several policy recommendations, including the reduction of sector-specific taxes to make mobile services more affordable for the population.

Angela Wamola, GSMA's Head for Sub-Saharan Africa, commended Ethiopia's progress, stating, "Ethiopia is well-positioned to be a digital leader in East Africa. With strategic reforms and improved access to digital tools and services, the country can unlock unprecedented economic and social opportunities, benefiting millions of people."

This report emphasizes that Ethiopia's digital transformation is not just an economic opportunity but also a vital route toward enhanced social inclusion and sustainable development. By leveraging digital technology, Ethiopia aims to create a more equitable and prosperous future for its citizens while contributing to the broader advancement of the East African region. The integration of digital tools and services into various sectors has the potential to empower marginalized communities, improve access to education and healthcare, and foster entrepreneurship, ultimately leading to a more resilient and inclusive economy. As the country continues to invest in its digital infrastructure, it is poised to unlock significant growth and development opportunities that will benefit all segments of society.