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Digital Ethiopia 2025 -A Strategy for Ethiopia Inclusive Prosperity

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Digital Ethiopia 2025 -A Strategy for Ethiopia Inclusive Prosperity DIGITAL ETHIOPIA 2025 -A STRATEGY FOR ETHIOPIA INCLUSIVE PROSPERITY Foreword The world is undergoing a fourth industrial revolution at an unprecedented rate. Ethiopia must proactively embrace it to ensure our communities benefit, and our youth succeed in the new world. We are witnessing a global transformation driven by new technologies such as Artificial Intelligence, Internet of Things, Nanotechnology, and Big Data, amongst many others that offer new models for production, communication, and lifestyle. Our children require new skills and knowledge, and it is our responsibility to position them better in seizing the future. Ethiopia is yet to realize its potential in the digital space and leverage technology to build a more prosperous society. Urgent, bold, and coordinated action is needed so we can make this transformation successful. We are on a journey of rapid economic and social change. In 2019, we adopted the Homegrown Economic Reform Agenda and the Ten-Year National Development Plan (2020-2030). New digital technologies offer an opportunity to sustain growth and ensure every citizen benefits from a more prosperous nation. Leveraging these digital opportunities demands a new mindset and leadership style from the Government. Enabling innovation means embracing the unknown. The Government commits to investing in Research and Development of future and emerging technologies as well as creating an enabling environment for courageous, innovative and committed people to develop new businesses, services and jobs. Like many new and mostly unknown opportunities, there are risks to mitigate and lessons to be learnt to ensure our future is safe and inclusive. While these risks include cybersecurity innovation, harmful social media content, a growing gap between the rich and poor, the risks to not leveraging digital technologies, however, are higher for developing economies like ours. The Covid-19 pandemic, for example, has provided powerful lessons in the importance of digital tools: to trace and track high-risk individuals, to facilitate vaccine research, as well as to mitigate the economic downturn by safely enabling people to work remotely. Ultimately, the most considerable risk is complacency in understanding and navigating our new digital paradigm. Also, informed risk-taking and a compassionate spirit are vital to ensuring gender and socio-economic gaps are bridged and not merely managed. Inclusively realizing new opportunities demands learning, collaboration, and partnerships, both within and beyond Ethiopia. The development of this strategy has been possible through cooperation and collaboration amongst various stakeholders, local and international leaders. Special thanks to the Ministry of Innovation and Technology, Oxford University's Pathways for Prosperity Commission, MasterCard Foundation, Tony Blair Institute, Dalberg, and the United Nations Economic Commission for Africa. Together we keep learning from each other, we collaborate more deeply, and we form more robust and more innovative partnerships. Version 4.0 II DIGITAL ETHIOPIA 2025 -A STRATEGY FOR ETHIOPIA INCLUSIVE PROSPERITY This strategy is a first step and a call to action. Only work brings to life and delivers meaningful results to citizens who deserve a prosperous future. This strategy is the first step and fundamentally a call to action. I invite all those committed to a prosperous future for Ethiopia to join together and contribute all they can. I am confidentwe can do it together. Abiy Ahmed Ali (PhD) Prime Minister Federal Democratic Republic of Ethiopia Version 4.0 111 DIGITAL ETHIOPIA 2025 -A STRATEGY FOR ETHIOPIA INCLUSIVE PROSPERITY Table of Contents E·xecutive Summary .............................................................................................................................. 2 1. Introduction ..................................................................................................................................... 8 2. Vision and Objectives ...................................................................................................................... 12 3. Framework & Methodology ............................................................................................................ 17 4. Digitally Enabled Pathways for Prosperity for Ethiopia ..................................................................... 21 4.1 Ethio ia's Pathwa 1: Unleashin Value from A riculture ............................................................. 21 4.1.1 Current Status ........................................................................................................................... 22 4.1.2 Global Trends ............................................................................................................................ 23 4.1.3 Where Ethiopia Can Succeed: Opportunities............................................................................ 25 4.1.4 Ensuring lnclusivity ................................................................................................................... 27 4.2 Ethiopia's Pathway 2: The Next Version of Global Value Chains in Manufacturing ........................ 28 4.2.1 Current Status ........................................................................................................................... 28 4.2.2 Global Trends ............................................................................................................................ 29 4.2.3 Where Ethiopia can succeed: Opportunities ............................................................................ 31 4.2.4 Ensuring lnclusivity ................................................................................................................... 34 4.3 Ethio ia's Pathwa 3: Buildin the IT Enabled Services Sector ...................................................... 35 4.3.1 Current Status ........................................................................................................................... 35 4.3.2 Global Trends ............................................................................................................................ 36 4.3.3. Where Ethiopia can succeed: Opportunities ........................................................................... 37 4.3.4 Ensuring lnclusivity ................................................................................................................... 39 4.4 Ethio ia's Pathwa ital as the Driver of Tourism Com etitiveness ....................................... 40 4.4.1 Current Status ........................................................................................................................... 40 4.4.2 Global Trends ............................................................................................................................ 41 4.4.3 Where Ethiopia can succeed: Opportunities ............................................................................ 45 4.4.4 Ensuring lnclusivity ................................................................................................................... 47 5. Where Ethiopia is: Assessing Ethiopia's Digital Readiness ................................................................. 48 5.1 Infrastructure ............................................................................................................................... 48 5.1.1 Connectivity .............................................................................................................................. 48 Version 4.0 IV DIGITAL ETHIOPIA 2025 -A STRATEGY FOR ETHIOPIA INCLUSIVE PROSPERITY 5.1.2 Power ........................................................................................................................................ 52 5.2 Enablin S stems.......................................................................................................................... 55 5.2.1 Digital ID .................................................................................................................................... 55 5.2.2 Digital payments ....................................................................................................................... 58 5.2.3 Cybersecurity ............................................................................................................................ 61 5.3 Di ital Interactions amon Government Private Sector and Citizens ............................................ 63 5.3.1 E-Governance ............................................................................................................................ 63 5.3.2 E-commerce .............................................................................................................................. 67 5.4 The Di ital Ecos stem ................................................................................................................... 70 5.4.1 Finance ...................................................................................................................................... 70 5.4.2 People ....................................................................................................................................... 76 5.4.3 Policy & Regulation ................................................................................................................... 81 6. What needs to be done.................................................................................................................. 87 6.1 Short Term Foundational Pro·ects u to
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