Addis Ababa, October 24, 2024 (FBC) – Ethiopia’s digital economy could add over ETB 1.3 trillion to GDP by 2028, according to the GSMA’s new report, Driving Digital Transformation of the Economy in Ethiopia.
Note that GSMA, in collaboration with Ethio telecom, launched the Ethiopia Digital Economy Report on Thursday which explores key insights into the East African nation’s digital transformation journey and highlights opportunities and challenges in building a robust digital economy.
In a press release sent to FBC, GSMA stated that the report highlights how telecom reforms and investments in mobile technology are catalysing growth in key sectors such as agriculture, manufacturing, and public services. These advancements are expected to create over 1 million new jobs and generate an additional ETB 57 billion in tax revenues by 2028.
Acknowledging the role of telecom reforms in driving Ethiopia’s path to digital growth, GSMA pointed out that Ethiopia’s telecom reforms under the Home-Grown Economic Reform (HGER) programme have driven major progress.
By 2023, the sector contributed ETB 700 billion to GDP and generated ETB 57 billion in tax revenues. Mobile internet connections grew by 65%, with 4G coverage expanding eightfold. Key players, Ethio Telecom and Safaricom Ethiopia, have been instrumental in driving this growth through expanded mobile internet access and increased competition in the telecom market.
By 2028, over 50 million Ethiopians – nearly double today’s figures – are expected to be connected to mobile internet, according to the report. Increased connectivity will drive growth across sectors like agriculture, adding ETB 140 billion, and manufacturing, contributing ETB 114 billion by 2028, GSMA stated citing its Ethiopia Digital Economy Report.
However, a substantial usage gap persists, with 76% of the population still not using mobile internet despite living within network coverage. Bridging this gap, particularly the 40% gender disparity in mobile internet use, is crucial for Ethiopia’s digital future. With targeted policy reforms, this gap could shrink to 66% by 2028, bringing millions more Ethiopians online.
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 boosting both digital and financial inclusion, further contributing to the country’s economic development.
To fully harness the potential of digitalisation in Ethiopia, the GSMA outlines several critical policy recommendations, including: prioritise service affordability, fast-track telecom reforms, improve device affordability, expand mobile money services, and boost digital skills and government services.
Angela Wamola, Head of Sub-Saharan Africa at GSMA, commented: “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.”
According to her, this will benefit not only the economy but also the millions of Ethiopians who stand to gain from greater digital inclusion.
The GSMA (Global System for Mobile Communication) is a global organisation unifying the mobile ecosystem to discover, develop and deliver innovation foundational to positive business environments and societal change.