(Ecofin Agency) - As Africa increasingly embraces digitalization, Ethiopia shows promising prospects for its digital economy, which analysts expect to grow significantly, positively impacting its GDP.

Ethiopia's digital economy has the potential to contribute 1.3 trillion ETB (about $10.8 billion) to the nation's GDP by 2028. This is according to a report by Ethio Telecom and the GSMA (Global System for Mobile Communications Association), titled "Driving Digital Transformation of the Economy in Ethiopia: Opportunities, Policy Reforms, and the Role of Mobile."

The GSMA, in collaboration with our company, officially launched its first comprehensive report on Ethiopia's digital transformation today in Addis Ababa, examining the successes, opportunities, and challenges of building a robust digital economy.
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— Ethio telecom (@ethiotelecom) October 24, 2024

The report highlights that investments in mobile technology and ongoing telecommunications reforms could enhance key sectors like public services, agriculture, and manufacturing. It also suggests that these advancements could generate 57 billion ETB in tax revenue and create over one million new jobs. In 2023, the report notes, the reforms under the Home-Grown Economic Reform (HGER) program helped generate 57 billion ETB in tax revenue and contributed 700 billion ETB to the GDP.

Mobile internet coverage has increased by 65%, and 4G connections have multiplied eightfold, thanks to significant investments from Ethio Telecom and Safaricom Ethiopia, along with increased competition. At this pace, the GSMA predicts that 50 million Ethiopians will have mobile connectivity by 2028. This growth could yield 114 billion ETB for the manufacturing sector and 140 billion ETB for agriculture, stimulating further growth in other areas.

ኢንጅነር ባልቻ ሬባ የኢትዮጵያ ኮሙዩኒኬሽን ባለስልጣን ዋና ዳይሬክተር ባለድርሻዎችን ያሰባሰበው በ ጂኤስኤምኤ እና ኢትዮ ቴሌኮም ለተዘጋጀው መርሃግብር ያላቸውን አድናቆት በመግለጽ ለዘርፉ ድጋፋቸውን አጠናክረው እንደሚቀጥሉ አረጋግጠዋል።
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— Ethio telecom (@ethiotelecom) October 24, 2024

However, the report also identifies significant challenges to expanding digital technology in Ethiopia. We Are Tech Africa reported that currently, 76% of the population does not use mobile internet, with a 40% gap disadvantaging women. Closing this gap is crucial for achieving widespread digital inclusion.

The GSMA recommends several measures, including making devices more affordable and services more accessible, speeding up reforms, and promoting mobile money. Ethiopia views digitalization as key to its Vision 2025 plan, seeing it as a way to create new economic opportunities and boost productivity.

Angela Wamola, GSMA’s director for Sub-Saharan Africa, believes that Ethiopia is poised to become a digital leader in East Africa. By implementing strategic reforms and enhancing access to digital tools and services, the country can create unprecedented economic and social opportunities for millions of its citizens.