woman accelerating

The Woman Accelerating Digital Ethiopia

Ashenafi EndaleMarch 15, 202115020

Myriam Said, Digital Advisor to the prime minister, is the leading personality behind Ethiopia’s stride towards the digital economy. She coordinates initiatives implemented to advance digital technology throughout the economy, currently at an early stage of development. Myriam’s promotion to advisor to the prime minister in February 2020 came as a result of her dedicated work when serving for nine months as Director of the National Digital Transformation Program at the Ministry of Innovation and Technology. While working as a director, Myriam led a team of experts who developed Digital Ethiopia 2025, an inclusive strategy guiding Ethiopia’s journey from analogue practices where government, business, and social interactions took place in person, to a fully integrated inclusive digital economy and society where exchanges are made faster, cheaper, and more securely through digital technology.The experience she gained serving as Director at Kifiya Financial Technologies for ten years helped her understand the working environment and motives of the private sector, which is expected to be at the center of the digital revolution. These experiences make Myriam, born in Addis Ababa from an Ethiopian father and French mother, the ideal candidate to coordinate and strengthen initiatives currently underway by the private sector with government driven digitalization enterprises.
But the road ahead is not smooth for Myriam who holds a BSc in mathematics and physics and a masters in theoretical physics. For instance, reliable and cheap telecom infrastructure still remains the most binding constraint for Ethiopia’s fledgling IT-enabled sectors. Although internet coverage has grown at an annual rate of 45Pct in Ethiopia, it is still slower compared to other Sub-Sahara African countries. Access coverage of broadband internet services is 7.1Pct in Ethiopia, compared to the regional average of 24.8Pct. But Myriam says this will be changed after the partial privatization and liberalization of the telecom sector is finalized.
Factors such as poor government regulation and supervision as well as lack of skilled manpower in the area also hinder the nation’s journey towards building a vibrant digitally enabled economy. Myriam agrees with the attestation that the conventional education system is very stiff and does not give students the liberty to be creative.
EBR’s Ashenafi Endale sat down with her to discuss in detail the steps Ethiopia is taking towards a digital economy and the factors dragging the country back.

What are the enabling factors that will help to realize the objectives of the national digital transformation strategy known as Digital Ethiopia 2025?
Digital Ethiopia 2025 has three enabling systems: digital ID, electronic payment, and cybersecurity. The digital ID system is a platform that helps to identify and authenticate the identity of people. The second pilar—a digital payment system—enables government, private institutions, and the populace to interact with each other.
Conducting an assessment of Ethiopia’s cybersecurity stance and developing a roadmap for the adoption of cloud solutions and data centers are needed to improve Ethiopia’s digital readiness. Alongside, it is also necessary to address critical gaps and strengthen existing infrastructure; develop enabling systems; and facilitate digital interactions between the government, private sector actors, and citizens.

What progress has been achieved thus far in this regard?
Progressions are at different stages. For instance, the digital ID system will be piloted soon.

To achieve the objectives of the strategy, different institutions are assigned to perform certain activities. Does this create issues?
The strategy is a cross-sectoral umbrella strategy setting out a roadmap for a national digital transformation. So, the motive was for each sector to come up with their own digital roadmap that enables them to use technology to achieve their sectoral objectives. The Ministry of Science and Higher Education came up with its own digital skills plan. We expect others to follow.
Since the task is cross-sectoral, it has to be led at the macro level. The Ministry of Innovation and Technology is assigned to coordinate the successful implementation of the national strategy.

Do you think the right ingredients are in place to achieve the objectives of the strategy?
The right ingredients are uninterrupted power and the availability of the right skills and products. The policies and reforms the government is undertaking is leading the nation in the right direction. But the biggest progress will come after the telecom sector is liberalized.

Access to finance for tech startups is almost non-existent in Ethiopia. How can the private sector play a defining role in advancing the digital economy?
Access to finance has been a challenge thus far. Two major initiatives have been taken to resolve this problem. The first is a fund already allocated for startups by the government. The second measure is taken from a regulatory perspective. A proclamation regulating startups and incubation centers is now in the final stages. It will soon be approved. These two measures are expected to help tech startups launch their projects at full scale.

What major changes are expected after the ratification of this proclamation?
First, the proclamation allows incubators, accelerators, and startups to be recognized as businesses, as entities that can receive funding. There is going to be a series of incentives in place for entrepreneurs. It will encourage equity and angel investors to come to Ethiopia and invest in startups.

In recent times, the National Bank of Ethiopia (NBE) has introduced various measures restricting digital transactions made with ATMs and mobile and online platforms to certain levels and frequencies. This runs contrary to the expansion of the digital payment sphere.
The caps on digital transactions are necessary to fight money laundering and ensure financial security in general. If we do not have a digital ID system, it is very difficult to identify and authenticate transactions and the people executing them.
The NBE has been undertaking many reforms to expand digital payment systems. The new banking business proclamation allows non-financial institutions to provide digital payment services. I think the NBE is strengthening its regulatory capacity.

How do you evaluate the success of recent NBE measures to limit cash withdrawals and reduce cash-based transactions overall?
The measures are very good incentives. Restrictions on cash withdrawals pushes more and more people to go digital. Even in rural Ethiopia, people are starting to do this. If you go to Somali region, it is amazing how mobile money is working. Still, building digital skills is needed to break the fear and anxiety that people have surrounding digital transactions.

The government is planning to launch a stock market in the next three years. How will this help create a vibrant digital economy?
Adopting an open data system is critical. After the stock market is launched, governmental institutions will start making financial and other information public. This will make collaborating and interacting with government institutions easier. The private sector can also use the data to arrive at new ideas and build businesses.

Transacting with government institutions digitally has been difficult due to problems related to the issuance of e-receipts.
Yes, the e-receipt issue has been a problem. But we have the Electronic Transaction Proclamation, approved by parliament about a year ago. It recognizes electronic signatures, stamps, and receipts. But we are still at a nascent stage when it comes to implementation. A lot of reforms and laws were introduced in the last two years. Even the private sector is yet to digest and internalize the new laws and directives rushing out to adjust themselves and catch up with us.

How can Ethiopia leapfrog and reach levels attained by advanced economies?
To make this reality, innovators must understand what markets demand. For instance, the digital literacy rate in China was not satisfactory when mobile money was introduced in the country. But they came up with innovative solutions such as QR codes and fingerprint usage.
Ethiopia can learn many things from such experiences. We can come up with new solutions that are adaptable to Ethiopia’s condition. The first task is to understand the existing challenges. For instance, why rural people are not putting their money in banks. The second task is coming up with solutions.

Once the digital platform is opened up for foreign players, how is the government planning to ensure privacy and stop cyber-attacks?
This is the dark side of having a digital economy. Making sure we take cyber security at the strategic level, rather than seeing it as technical matter, is critical. Countries are losing billions because of cyber-attacks.
Especially when mobile money takes off, there will be a lot of scams, like what happened in in Kenya. The Information Network Security Agency is currently helping financial institutions and others strengthen their digital platforms. Imbedding security in any software, device, or platform we develop is important.

Do you see foreign investors with the required technological capacity coming and investing in device manufacturing and software development?
Our infrastructure is improving. In Ethiopia, electricity and labor costs are very competitive. Foreign phone and tablet manufacturers as well as data centers, business process outsourcing companies, and call centers will come to Ethiopia soon.

What is the specific purpose of the recently established Artificial Intelligence (AI) Center by the government?
The main purpose of the center is to undertake research and development (R&D) and develop applications especially for health and agriculture amongst other sectors. AI is the future. If we do not catch up quickly through technology, the gap between poor and rich countries will get wider.

Ethiopian banks are the largest buyers of software and financial technologies. But they usually purchase from abroad.
This discourages emerging local tech companies. What is the government doing about this?
The procurement proclamation is being updated. Incentivizing local sourcing is critical. The need for aftersales service will increase the demand for local IT developers.

Can e-commerce and e-government cut out the bureaucracy, public service inefficiency, and corruption in Ethiopia?
That is the big advantage of digital economy. But the right mindset is still critical. The steps citizens take to access digital service should be simple and clearly known.
The Ministry of Trade and Industry has already launched the e-trade platform. This will increase Ethiopia’s ranking in the ease of doing business index. Opening a business used to take 32 days. With the new initiatives, it takes less than six days. Tax and all the issues businesses complain about are now under the lens.

The government is in the process of partially liberalizing the telecom sector. In the past it had been resisting, arguing private operators cannot ensure access in rural areas. What has changed now?
A law was introduced by the Ethiopian Telecommunications Authority (ETA) to ensure access to telecom services in rural areas. This law makes each operator responsible to serve underserved populations. Every operator will be assigned to the same role and they will have to obey and expand in rural areas.

What is the progress of the privatization and liberalization of the telecom sector? What benefits are expected from the result?
Around 12 companies are competing currently. The winners will not only be selected by the highest offered bid or price but also by the best services they expect to provide.
This process in the telecom sector will boost the competitiveness and quality of services provided in Ethiopia.

What is the agreement that will be reached with the operators that will join the telecom sector?
The operators that will be licensed can build their own infrastructure such as towers, where there are none. But where there are towers, they can use Ethio telecom’s infrastructure. The bid is closed for third party infrastructure developers.

Many local companies store their digital data abroad. Do you see any alternative to reverse this?
The only solution is to build efficient telecom infrastructure. This will be realized after the privatization process is completed.

How can the digital economy improve the lives of the rural population and increase productivity especially in the agricultural sector?
The minute people in rural areas are included into the financial system, they can access credit to expand their businesses, improve their lives, and transform agricultural productivity. There are many technologies that can be deployed in the agriculture sector to boost productivity and avoid catastrophes.
E-commerce is ideal to make agriculture attractive to entrepreneurs. Farmers can easily access markets digitally to sell their products and increase their visibility to international consumers. Currently, farmers do not know or control the final selling price of their products. Empowering farmers with price information will increase their profit margin. Digital technology will also encourage the youth to go back to rural areas and invest in agriculture.

What is the potential of the digital economy in facilitating GDP growth?
Studies show a 10Pct improvement in the telecom sector can lead up to 2Pct growth in GDP. Financial inclusion can add between 6 to 7Pct growth to GDP.

But some argue automation and technological advances lead to job losses.
I do not believe that. Some professions might disappear but more new jobs will be created. In fact, more rewarding jobs will be created when the digital economy grows.

Can digital technology help create a more favorable working ecosystem for women?
The initiatives launched by the digital economy are already opening up new opportunities for women to work from home.

Do you think Ethiopia’s education system is aligned with the needs of the digital economy?
Our conventional education system, like most in the world, is very stiff. It does not give students the liberty to be creative. So, efficient mechanisms are needed in the education system. EBR

Ashenafi Endale


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