Mobile money could add $5.3 billion to Ethiopia’s GDP: New Report

Addis Ababa, July 3, 2023 (FBC) – In its new report GSMA, a global organization that represents the interests of mobile network operators worldwide said that Mobile Money in Ethiopia could add $5.3 billion to the country’s GDP.

The report says that Ethiopia’s Mobile money is advancing financial inclusion and driving growth.

It adds that the liberalization of the telecoms market in Ethiopia is presenting an opportunity to advance economic development in the country, including the financial inclusion of underserved populations via mobile money.

The report explains that regulatory change in Ethiopia from 2020 has allowed non-banks to provide mobile money services; a change in which the Government of Ethiopia took to broader liberalization of the economy from state-led to private sector led growth.

In addition, the government of Ethiopia plans to privatize 45% of Ethio Telecom as well as admit another mobile operator into the market. If all goes to plan, by 2025 Ethiopia should have three mobile operators offering mobile money services, the report further explained.

The new report by GSMA forecasts that the positive impacts of mobile money adoption on poverty reduction, GDP growth, tax collection and resilience to economic shocks in the country.

The report estimates that Ethiopia see a high adoption of mobile money adding approximately 60% of Ethiopian adults are mobile money users by 2030 that could lift 700,000 people out of extreme poverty, add $5.3 billion to Ethiopia’s GDP, increase tax revenue by $300 million and provide a cushion for the economic shocks experienced by almost 40% of Ethiopian households.

The new report however, highlights some enabling factors whether the country will see high adoption of mobile money which depends on connectivity, affordability, policy/regulations, literacy and digital skills, payments interoperability, awareness, trust, safety and security among others.

Despite mobile money services having been offered in Ethiopia since 2015 by banks and micro-finance institutions, and in the last two years by Ethio Telecom, Findex data (2022) indicates that only 5% of men and 4% of women have a mobile money account.