NBE Advisor Warns One in Ten Digital Transactions Fail, Questions Financial Inclusion Metrics

EBR_News Jun 24, 2026

Betegbar Yaregal

A senior official of the National Bank of Ethiopia has raised concerns over the reliability and depth of the country’s rapidly expanding digital financial system, saying that roughly one in ten digital payment transactions fails to complete successfully. 

Speaking at the Huawei Finance Summit 2026 in Addis Ababa on Tuesday, Naoll Addisu (PhD), Senior Technology Advisor to the NBE Governor, said Ethiopia’s financial sector has undergone a compressed digital transformation that has left gaps in consumer protection, infrastructure resilience, and service quality.

“What happened in the West over 25 years happened in Ethiopia in a few years,” he said. “Our communities, our society, have not kept up with the technology.”

He said Ethiopia’s digital payment ecosystem processes large volumes but still faces structural weaknesses, including an estimated 8% transaction failure rate. When transactions fail, he said, users are often transferred between banks, switches, and other intermediaries without clear resolution, with some funds taking months to recover.

The central bank, he noted, has responded by establishing a consumer protection directorate and a public dispute resolution portal, and is preparing to push the industry toward stronger settlement and accountability systems.

On inclusion itself, Naoll questioned the sector’s headline figures directly. Ethiopia currently counts approximately 64 million financial accounts, with mobile wallets pushing the nominal figure toward 128 million but he said these numbers misrepresent the reality. “Financial inclusion does not mean account opening,” he said. 

“Financial inclusion means affordable and accessible,” he said, noting that around 70% of rural areas still operate on 2G connectivity, limiting access to modern digital financial services. Credit penetration also remains low, he added, despite the rapid expansion of deposit accounts.

He further cited system-level data showing the scale of Ethiopia’s digital finance expansion, including 24 billion transactions processed in the past nine months, 70% connectivity coverage across the ecosystem, and financial inclusion estimated at 64%, describing infrastructure development as a central pillar of ongoing reforms.

On infrastructure sovereignty, Naoll raised concerns about Africa’s dependence on external cloud systems, stating that none of the world’s major hyperscale providers including Amazon Web Services, Microsoft, and Google operates a data centre on the continent despite its 1.5 billion population.

“With all due respect, I consider South Africa to be in Europe,” he said, referring to commonly cited regional cloud infrastructure claims, and framing the issue as one of economic and institutional sovereignty.

He added that fragmentation in Ethiopia’s payment ecosystem is already visible at merchant level, citing cases where multiple QR codes are displayed for different payment systems, a situation he said reduces efficiency for both consumers and businesses.

“Fragmentation is happening,” he said, calling for interoperable systems, programmable financial infrastructure, and the use of smart contracts in areas such as subsidies and welfare delivery.

Naoll also outlined ongoing institutional reforms at the central bank, including the creation of a technology cluster at vice-governor level, a financial industry infrastructure oversight directorate focused on resilience and cybersecurity, and a public treasury market portal allowing direct participation without intermediaries. 

The NBE is also transitioning toward ISO 20022 payment standards and developing interest-free financial instruments targeting underserved segments of the market.

He said these reforms align with Ethiopia’s broader homegrown economic agenda and long-term digital strategy, and require coordinated action from the Ministry of Finance, capital market institutions, telecom operators, fintech companies, and development partners.

While the NBE highlighted regulatory and infrastructure challenges, Huawei executives at the summit focused on the future, showcasing the company’s AI-driven banking roadmap, the company’s global financial technology footprint and AI-driven banking roadmap, citing operations in more than 38 countries and partnerships with over 7,100 financial institutions.

Alvin Feng, President of Huawei’s International Digital Finance Business Unit, said artificial intelligence is shifting banking from a productivity-support tool into what he described as an intelligent operator capable of autonomous engagement, real-time risk assessment, and personalised financial services.

He added that banks will increasingly be divided between early AI adopters gaining competitive advantage and institutions that lag behind in digital transformation.

Huawei also showcased case studies from China, the Middle East, and Southeast Asia, including a Philippine bank that built a hybrid cloud enterprise data platform enabling predictive banking through unified customer data.