Higher government officials lauded the focal attention Ethiopia placed on digital economy that is believed to further underpin the country’s economic development. And the country is flexing muscles to display a push in the sector.
Prime Minister Abiy Ahmed and co-founder and former executive chairman of Alibaba Group Jack Ma has just agreed to establish a hub of electronic World Trade Platform (eWTP) in Ethiopia.
The signing of the Memorandum of Understanding (MoU) between the government and Alibaba is envisioned to facilitate cross-border trade, provide smart logistics and fulfillment services, assist small and medium-scale enterprises (SMEs) to reach China and other markets and offer talent-sharpening trainings.
Next to Rwanda, the move will make Ethiopia the second country in Africa to establish such a eWTP hub, and the partnership builds upon the successes of other eWTP partnerships in Asia, Europe and Africa over the past two years.
Minister of Innovation and Technology, Dr. Eng Getahun Mekuria said, Ethiopia is according a preferential treatment for technology particularly, for digital economy that will take the highest portion in its GDP.
Associate Professor of Economics Wendaferahu Mulugeta told The Ethiopian Herald that digital economy has a greater role for a given country’s marketing progress. There is no need to go to a market place in person for selling and purchasing purpose. It is advantageous in fulfilling needs without moving far.
The financial transaction will also develop in tandem with the digital market expansion. The transaction of money will help strengthen the economy. As the country was tardy in embracing the sector, this initiative has to enjoy further support to achieve the multiple advantages that accrue from it, he stated.
As to him, espousing Digital economy necessitates increasing the telecom capacity. It can prod the latter to be capable enough. It also requires the financial sectors readiness for this service.
The country’s decision to embrace digital economy reaching an agreement with Alibaba group, a giant international company on the digital economy sector could be considered a breath of fresh air. So the role of governmental institutions like Ethio telecom, financial sectors and other is necessary for its effectiveness, he said.
Wendaferahu believes that the establishment of this digital economy sector plays quite a role on FDI. Apart from strengthen marketing it needs more coordination and obligates making the platform ready. So, governmental institutions need to strength their capacity soon. They have to start the job through drawing experience from neighboring countries or other developing countries.
The online marketing could also face challenges like money laundering. Therefore, there is a need to exercise care. Especially the National Bank, Ethiopian National Security and other safety-related sectors are expected to work in concert. Coordination is mandatory for a positive outcome regarding the envisaged digital economy, he pointed out.
Associate professor Ermias Ashagre. on his part ,said that the country’s initial exercise on digital economy is promising. But he has doubt on its positive effect on the country’s economy because of foreign exchange shortage.
As to him, marketing imbalance could also be the other stranglehold regarding the effectiveness of the functionality of the digital economy, so the government should focus on it.
Prudential moves are needed to parry challenges apparent in electronics marketing like cheating. The sector necessitates more controlling and strong follow up because the transaction will not be simple, he added.
Ermias stressed, the trade imbalance and exchange rate will be the basic issues that the implementers need to focus on.
The Ethuiopian Herald December 1/2019
BY GENET FEKADE
