Unlocking
Ethiopia's Digital Potential

With a population of approximately 126 million, Ethiopia is Africa’s second most populous country, boasting a significant domestic market. A key objective of the Ethiopian government is the structural transformation of the economy from agriculture to industry. It has invested in information and communications technology (ICT) infrastructure, as well as in human resource development and electronic applications. According to the African Development Bank, the contribution of the ITC sector to GPD was 4 per cent in 2021, with an upward trend. This has supported the diversification of the Ethiopian economy and is an additional source of foreign exchange. In addition, the country has increased its connectivity with the launch of Ethio Telecom’s 4G services in major cities and the ongoing rollout of 5G technology.

Furthermore, the country’s Digital Ethiopia 2025 strategy sets out a comprehensive plan to digitise key sectors of the economy, including agriculture, manufacturing, and services. It seeks to create a knowledge-based economy that can sustainably address the needs of its growing population. Ethiopia had about 20.86 million internet users in January 2023, which is 16.7 per cent of the population. Digital Ethiopia 2025 strategy will increase access to technology and innovations such as artificial intelligence, blockchain, and the Internet of Things (IoT), develop the local industry and enable the delivery of high-speed digital services to both urban and rural areas.

Building on these developments, Invest for Jobs supports small and medium-sized enterprises (SMEs) in the fast-growing e-commerce and e-services sector in Ethiopia. The project strengthens the capacity of SMEs by improving their services, products, internal processes and structures, and marketing, as well as helping them gain new customers in local and international markets. The SMEs currently supported work on digital services in health, education, logistics, and job matching, as well as delivery and transport services and other innovative models targeting local and international customers.

The project offers capacity building, which includes market and product development, executive coaching, IT development skills, content development, graphic design, costing and finance, and matchmaking for working and investment capital. SMEs can participate in trainings to improve digital literacy and skills in digital marketing, e-commerce, data analytics, cybersecurity, and software/app development. These are complemented by mentorship and coaching programs, where digital entrepreneurs share their experiences with SMEs. Alongside skills development, SMEs receive hands-on support in implementing digital solutions that help assess their digital maturity, identify appropriate technologies, and develop comprehensive digital transformation strategies. Providing of direct support in deploying e-commerce platforms, enterprise resource planning (ERP) systems and cloud-based productivity tools further enables SMEs to unlock the full potential of digital technologies.

Specialised trainings capitalise on developments such as the increasing importance of Web3 technologies, for example by focusing on blockchain-powered platforms or decentralised finance applications. Those applications can for example allow SMEs to access credit, insurance, and other financial services more efficiently, without relying on traditional intermediaries. Additionally, the transparency and traceability of blockchain-based systems can help SMEs build trust and verify the provenance of their products, whether it's agricultural goods, industrial products, handicrafts, or electronic components, which becomes increasingly relevant in the context of new value chain regulations for export.

To increase exposure to international markets, and specifically to leverage the dramatic shortage of qualified employees in Germany, the project also supports ICT SMEs in Ethiopia by helping them connect with technology outsourcing companies in Germany and by showcasing the potential and capabilities of Ethiopian ICT SMEs to German companies. Selected Ethiopian ICT SMEs will be able to participate in at least two ICT industry events in Germany and/or other parts of Europe.

Since August 2023 the project has already onboarded 11 SMEs offering a range of innovative digital services.

One example is TaskMoby by Eziti Information Systems, which connects Ethiopian users with tradespeople like plumbers, electricians, and cleaners, helping users find reliable service providers and offering tradespeople opportunities to receive orders. More than 3,800 service providers have completed over 10,000 jobs through the platform, generating decent income and creating jobs for young people and women. This company is receiving technical assistance in sales consultancy, enhancing its organizational structure, refining methods for identifying skilled talent, and ensuring preparedness for effective client engagement.

Another example is Gotech, a technology provider currently developing a new product called Falcon, a fast, low-cost delivery service. The project provides Gotech with grant support to overcome equipment and technical constraints, which is expected to create more than 25 good jobs.

In total, the SME Support Facility, the wider project in which this aid for SMEs in the ITC sector is included, has successfully created since 2020 11,877 good jobs across growth sectors such as the digital economy, textile, leather, health, coffee, and more. By supporting SMEs in the digital space, the project is driving economic diversification and competitiveness and creating sustainable employment opportunities for Ethiopia's growing population.

This project is implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH and sequa gGmbH within the framework of the Special Initiative “Decent Work for a Just Transition” of the German Federal Ministry for Economic Cooperation and Development (BMZ).