Ethiopia’s digital economy could contribute more than $10 billion into the nation’s GDP by 2028, according to a recent report by the GSM Association (GSMA), titled Driving Digital Transformation of the Economy in Ethiopia.
The report underscores how telecommunications reforms and investments in mobile technology are fueling growth across vital sectors, including agriculture, manufacturing, and public services. These digital advancements are expected to create over a million jobs and contribute an additional $467 billion in tax revenue by 2028.
Angela Wamola, Head of Sub-Saharan Africa at GSMA, praised Ethiopia’s strides, stating, “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 stand to gain from greater digital inclusion.”
The report highlights significant achievements driven by Ethiopia’s Home-Grown Economic Reform (HGER) program, spurring the telecommunications sector’s growth. In 2023 alone, the sector contributed ETB 700 billion to GDP and generated $467 billion in tax revenues.
Mobile internet connections surged by 65%, with 4G coverage expanding eightfold, largely due to Ethio Telecom and Safaricom Ethiopia’s efforts to enhance connectivity and introduce competition in the telecom market.
Projected Growth and Connectivity Goals
By 2028, Ethiopia’s mobile internet user base is expected to reach over 50 million—nearly twice today’s figures. This connectivity boost is anticipated to drive economic growth, adding $1.1 billion to agriculture and $935 million to manufacturing. Yet, a significant usage gap persists, as 76% of the population does not use mobile internet, despite residing within network-covered areas.
Addressing this disparity, including the 40% gender gap in mobile internet usage, is essential for inclusive digital growth. With targeted policies, GSMA’s projections suggest that the usage gap could narrow to 66% by 2028, drawing millions more Ethiopians online.
Role of Mobile Money and Financial Inclusion
With over 90 million registered mobile money accounts and 70% market penetration, mobile money services have been pivotal for financial inclusion. As the adoption of these services expands, they are set to further enhance Ethiopia’s economic landscape by promoting both digital and financial inclusion.
Policy Recommendations to Accelerate Digital Transformation
To maximize Ethiopia’s digital economy potential, GSMA outlines key policy recommendations:
Service Affordability: Reduce sector-specific taxes to make mobile services more affordable.
Accelerate Telecom Reforms: Streamline Rights of Way and planning approvals to expedite infrastructure.
Enhance Device Affordability: Cut taxes on mobile devices to make smartphones accessible for low-income families.
Support Mobile Money Services: Strengthen regulations to boost mobile money and financial inclusion.
Advance Digital Skills and Government Services: Invest in digital literacy and e-government services, particularly targeting underserved groups like rural populations and women.
As Ethiopia works toward its Vision 2025 goals, the continued growth in mobile technology and digital connectivity is set to boost productivity in agriculture and other sectors, creating new opportunities across the nation and paving the way for a digitally empowered future.