Ethiopian Business Review

The Essence of ICT Restructuring in Ethiopia

Information and communication technologies (ICTs) are among the main enabling tools of modern civilization. These days, it is an integral part of our lives. The global economy needs ICT infrastructure for its activities such as the facilitation of trade and commerce. In addition to that, human welfare and poverty eradication programmes need proper ICT to enable humanitarian efforts. In this article, I present the importance of ICT restructuring in Ethiopia by first analysing the current state of ICT in Ethiopia and then suggesting the kind of restructuring it needs. 

ICT is an important technology sector which provides basic communication services to individuals and helps the overall growth and development of a country. ICT itself is one of the largest economic sectors and contributes to almost five percent of the global gross domestic product (GDP), according to the reports of Gartner Inc., a global research and advisory firm providing insights, advice, and tools for leaders in IT, Finance, HR, Customer Service and Support, Legal and Compliance, Marketing, Sales, and Supply Chain functions across the world. These days, ICT is essential for empowering the people all over the world. It provides knowledge and information which is essential for the success of democracy. In the modern world, ICT enables online businesses, provides advanced methods of teaching and learning, plays a key role in the functioning of governance, and enriches the entertainment industry. All branches of science, arts and commerce benefit from ICT. Recent advances in healthcare and public services are the results of the modern ICT. Overall, ICT has become an integral part of the modern human lives. 

Ethiopia has achieved some growth and development in the ICT sector over the last couple of decades. As of 2018, fifty-four million people use cell phones in Ethiopia. However, it is still far behind several African countries. It is one of the countries with very low Internet penetration. Every year, the International Telecommunications Union (ITU) analyzes the growth and development of ICT services across the world. Based on this analysis, it ranks the ICT services of the countries. This is quantified as ICT development index (IDI). In terms of IDI, Ethiopia ranked at 170 out of total 176 countries in 2017. Even its neighbouring countries Kenya, Djibouti, and Sudan were ahead of Ethiopia in terms of IDI. 

The modern digital ecosystem is very much expanded and several new dimensions are added to it every year. All of these new services provide some economic benefits and help the country in its development endeavours. If we analyze the human development index (HDI) of the countries around the world, we see that HDI and the IDI are very much dependent. The countries which have high HDI have high IDI. The following table shows the correlation between these two indices, which are critical for modern development. 

ICT is also instrumental in curbing corruption and financial fraud. For instance, in India, the public welfare system and public financial systems had corrupt practices at different levels. The current government in 2014 centralized these schemes using ICT. Now, the money directly goes from the welfare departments to the beneficiaries using the ICT facilities. It has brought down the corruption significantly. Similar practices are available in several countries. 

It is expected that Ethiopia will follow ICT enabled techniques to eradicate corruption from its public financial systems. The initiatives Prime Minister Abiy Ahmed (PhD) has enacted to make Ethiopia corruption free are very much dependent on an effective ICT system. ICT can play a very constructive role. 

Ethiopia, a country with more than 100 million population is currently struggling on several fronts such as corruption, lower level of literacy, unskilled/ limited skilled human resource, struggling education system, lack of research facilities in the universities, lack of modern infrastructure, slow business processes, and inefficient logistic systems. Several of these problems can be sorted out through ICT based solutions. The restructuring of the ICT sector in Ethiopia is quite slow. The last meaningful restructuring took place a decade ago. Though several ICT policies have been changed in 2018, they are not enough to bring the overall changes in the country. 

Last year, the prices of several services related to ICT were reduced by 40Pct to 50Pct. Despite that, the current prices of ICT services in Ethiopia are still among the most expensive in the world. For instance, Internet services over mobile phones are almost 100 times more expensive compared to the prices of those services in India and China. Furthermore, the qualities of those services are to be improved significantly. Initial installation and maintenance of ICT services in Ethiopia are very slow. In Western Europe, a connection for Internet and telephone service is provided on the same day on which the request is made (in some countries within a couple of hours). In Addis Ababa, it takes something between two weeks and six weeks depending on the location of the house in the city. These basic aspects of ICT service provisioning should be changed. This is possible through overall restructuring of the sector across the country. 

The following restructuring seems quite essential to change the state of ICT and its associated sectors in Ethiopia. 

Liberalization of the ICT Sector

Currently, Ethiopia has a very conservative policy forits ICT market which is very similar to Asian ICT markets of 1970s. Instead of having one government owned operator, it should allow both domestic and international operators in its market. 

Creating Competition

The privatization should be allowed on a large scale so that the competition in the market will ensure improved quality of service and reduction of tariffs. 

Globalization of ICT Sector

This will allow international companies to start operations in the country. They will build advanced telecom infrastructure which is not possible by Ethiotelecom through public funding. 

Changing the Telecom Policy

The national telecom policy should be changed to accommodate these changes. Of course, an appropriate regulator is required to monitor the relevant issues and problems of the sector. 

It seems to be the opportune time to make the above restructuring as Prime Minister Abiy is very much in favour of the liberalization, privatization, and globalization of the telecommunications sector. It would be beneficial to the common users of the country, the telecommunications sector, and the government. These restructuring would reduce the prices of the services, would bring more business, and thus profits for the corporate. The government will collect more taxes as the expansion of the services would bring more revenues. Overall, it will push Ethiopia towards growth and prosperity. At the same time the human values and democracy would be strengthened.


8th Year • Feb.16 - Mar.15 2019 • No. 71


 

 

Sasmita Mohanty

is PhD Scholar and researcher in Telecommunications Management at University of Aveiro, Portugal. She can be reached at 

sasmita@ua.pt

Leave a comment

Make sure you enter the (*) required information where indicated.Basic HTML code is allowed.