Ethiopia’s digital economy could add over 1.3 trillion Birr to GDP by 2028, according to the Global System for Mobile Communications (GSM) new report, driving digital transformation of the economy in Ethiopia. The report highlights how telecom reforms and investments in mobile technology are catalyzing growth in key sectors such as agriculture, manufacturing and public services. These advancements are expected to create over one million jobs and generate an additional 57 billion Birr in tax revenue by 2028.
Recently, Ethio-Telecom with the cooperation of GSM organized conference focused on how digital technology propelled economic growth and transformation. The report on Ethiopia’s digital economy performance also was presented.
On the occasion, Ethio- Telecom Chief Executive Officer, Frehiwot Tamiru, said that expanding mobile telecom network and service to the wide areas of the country is growing from time to time with updated technology. She further said that the endeavor, in addition to advancing connectivity, plays a crucial role in empowering the users, enhancing productivity and financial inclusion.
As to her, Ethio-Telecom, on top of expanding telecom service here in Ethiopia, has a broader plan to expand its activities on digitizing the African economy. She further said that the continent has an untapped market in these regard, and by exploiting the market, creating job opportunities for millions can be possible. Mobile connectivity is currently not a luxury; rather, it is a fundamental necessity, and reaching the underserved rural community through expanding digital technology is essential.
As public owned organization, in line with engaging in profit making business, it provides services with affordable prices and in the coming years the organization plans to assemble digital devices locally. It also made agreement with venders to disseminate mobile devices to the rural population.
Among the services that can be obtained through digitization are mobile banking which enhanced financial inclusion, fast track connectivity, e-governance which serves for administrational purpose such as taxation and revenue collection through online system and expanding education.
Ethiopia’s telecom reforms under the homegrown economic reform (HGER) program have driven major progress and by 2023, the sector contributed 700 Billion Birr to GDP and generated 57 billion Birr in tax revenues. Mobile internet connection grew by 65% with 4G coverage expanding eight fold. Key players, Ethio Telecom and Safari-com 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 GSM report. Increased connectivity will drive growth across sectors like agriculture, adding 140 billion Birr and manufacturing contributing 114 billion Birr by 2028.
The Safari com Ethiopia Chief Executive Officer WimVanhelleputte on his part said that, his organization is the first private operator in the Ethio-telecom business after the government liberalized the 130 years old public owned institution few years ago. Thanks to that initiative, he said that Safari com is now operating in Ethiopia and without that decision there would be only one operator in the telecom business. So as to him, his company has to be great full that it has been given the opportunity to rule out its services by stretching the infrastructure in Ethiopia.
He further said that like other countries and markets, there were some challenges the company faced which could be overcome but all over he said that he thanks the government policies and regulations which are conducive for doing business in simple way and made his company to be successful in Ethiopia.
As to the Chief Executive Officer, the company currently has six million customers after two years of operation. Asked whether competing with the public owned Ethio-Telecom challenging or not, the Chief Executive Officer said that the public owned company was privatized after 130 years of ownership and in the beginning, the company faced some challenges in terms of getting subscribers and stretching infrastructure because there was a capacity gap but as time passed, things became changed to the better and the company could provide its services both qualitatively and quantitatively and could penetrate the market. Currently, it is in a good position and the opportunities to work here also broaden the chance to do business.
Digitization is a key for advancing Ethiopia’s vision 2025. Mobile technologies will boost productivity in agriculture and other sectors, creating new opportunities across the country.
Angela Wamola is head of Sub –Saharan Africa at GSM. As to her, Ethiopia is well positioned to be 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 millions of Ethiopians who stand to gain from greater digital inclusion.
She also said that sustaining investment in telecom to Africa is essential because no country should be left behind from such development. The continent has to be where it has to reach in terms of the gains to adopt the technology to the benefit of the people. Over the last 20 years, numerous efforts have been exerted to enhance the coverage of the digital connectivity. In the earlier years, 3G has been widely adopted and currently it rose to 90% coverage. Even though the challenge in terms of sustained infrastructure investment on research for adopting for 4G witnessed, Ethiopia is reached around 73% of the population coverage.
The majority of African population has access to the mobile technology but, due to various reasons, most of them are not using the technology sufficiently; mostly they use it for verbal communication. So if they are still at 3G this again hampers the attraction of foreign direct investment in the telecom sector. She further said that while the rest of the world reached to 5G the majority of Africans are still adopted 3G and 4G. The recently introduce of 5G technology in Ethiopia clearly shows the nation reached remarkable moment in that regard and helps to attract more private investment.
She also said that there will be hearing the first live commercial network of 6G in the near future so this again creates division between Africa and the rest of the world in terms of utilization of digital technology.
The provision of quality service to the customers directly related with the capital which should be invested in the sector. Hence, attracting local and foreign private investors is essential and to that end creating playing field conducive for competition is crucial.
Nevertheless, as mentioned above though 90% of the population got access to telecom infrastructure, they are not using it properly to services such as internet connectivity. No one shows interest to invest in the telecom business while the population shows less interest to purchase products supplied by the digital technology which needs internet connectivity. Because investment needs return and without profit no one dares to engage in such business.
As to her, therefore, side by side with investing in digital endeavor making the price of the devices and the service should be affordable to the ordinary citizens.
It is understood that most African countries are highly indebted and faced shortage of hard currency and asked whether they can afford the importation of digital technology, she responded that attracting foreign direct investment to the importation of the technology should be taken as a way out because FDI reduces the countries financial shortcoming.
Side by side with enhancing the digital connectivity, providing literacy to the public is vital. However, she underlined that unless demand is created for the utilization of the internet services, pulling foreign investment is impossible.
Angela also mentioned the role of digitization in increasing productivity in many sectors. As to her, small scale farmers in Africa can obtain information about agricultural inputs’ prices such as fertilizer, pest and herbicides and selected seeds through mobile telephone; so that they can bargain in the market to purchase in fair price.
They also can supply their products to the consumers without dealing the matter with brokers and when they obtain profit, they reinvest the money on their farms. When their income increases from time to time, they start to practice irrigation system and in such manner they can harvest crops twice or three times a year. In such a way when wealth is created in the rural parts of the country, poverty can be reduced significantly.
BY ABEBE WOLDEGIORGIS
THE ETHIOPIAN HERALD THURSDAY 31 OCTOBER 2024
