The majority of businesses in Ethiopia do not have websites to promote their businesses for the online community. Business processes of most companies in Addis Ababa are manual. To this end challenges in access to digital infrastructure like Broadband; access to reliable electric power; under developed digital service provision; and others are among the challenges that the business community faces.
Mesay Hailemariam Moreda is CEO of Ronabit Consult. He has more than a decade of experience in multidisciplinary fields. He successfully led projects such as Integrated Social Security Administration System project, the exam registration and placement and the Unified Billing Project of Ethiopia among others.
Currently his company is developing many national strategies in the field of ICT including the Ethiopian national government strategy of National Network master-plan, ICT for community development strategy, Vendor management assistance, and Procurement Management assistance.
Capital sits with Mesay to talk about the challenges businesses face and how ICT can intervene. Excerpts;
Capital: What can you Identify and prioritize ICT related services and actions which support the transformation of the Ethiopian businesses for realizing effective and efficient services?
Mesay Hailemariam: For example, a media company could deliver personalized and targeted advertisements via their websites and related tools. Hospitals may further engage their patients to interact with specialist using short texts, chats, and even videos. Retail businesses directly on conducting online using web-based systems and electronic online payment systems could be a common example of this. The manufacturing sector Using of Robots and drones for various business related activities. Sharing economy using a digital platform is another example. Selling any extra goods as services for example extra car-seats; extra car time; extra store; extra room could all be sold as a service using software applications.
Capital: What are the major legal, business and capacity challenges undermining the role of ICT for promoting businesses in Ethiopia?
Mesay: We can list many challenges. Lack of awareness and Knowledge of the Business community about the business benefits of Information communication technology is among the leading challenges.
According to a study conducted by Ronabit Consults in 2018, for example, majority of Businesses in Ethiopia do not have websites to promote their businesses for the online community. Significant number of businesses in Addis Ababa own computers but primarily use they it as a type writer. Many own smart phones but use to browse social media contents. Business processes of most companies in Addis Ababa are manual. Business processes facing customers are in the first-row to be automated; I think, the reason is they are not usually profitable. Customer facing process automation do not usually have a direct relationship with revenue generating or profit bearing activities and cheaper when done manually. Their return on investment is indirect and takes relatively long-term to pay back – as they mostly pay back through efficiency and customer satisfaction. The other challenges Access to digital infrastructure like Broadband; access to reliable electric power; under developed digital service provision; etc are among the other challenges. This is actually challenging the existing business models in a positive and progressive manner
Capital: You have an ICT support strategy document that can guide future interventions towards supporting the business community to benefit from the ICT sector?
Mesay: In my opinion, Businesses could benefit from ICT in many ways: such as; the first and most obvious benefit is introduction of efficiency to their business processes especially those facing their customers. The marriage between Entertainment and Information processes (which we usually call Infotainment) is possible through automation of customer facing processes. Customer facing processes are very useful as they capture data; and data is the new oil – and for me, automating the data capturing process is like drilling an oil well.
The second benefit is Revenue generation: Usage of technologies in businesses may directly generate revenue; maximize profit margins; or minimize losses by providing additional services. For example; our concept of taxi before 3 to 4 years was to go to a roadside, wave our hands to a blue car with a label on it; negotiate a price and pay at the destination – usually prone to renegotiations of prices and disagreements. Now, from the convenience of your sofa, you just run a mobile app; click once or twice; and before you know it, the nearest Ride driver will call you – then you have a taxi. Name of the driver; Plate number; color of his car, will be displayed on your mobile and you know everything that you need to know. And at your destination, the total price is displayed on your phone and the on the phone of the driver- you are at your destination safely and pay without a hassle. Such business models could be applied to every spare good you have. May be your store that should stay empty for some time; your children’s’ rooms while they are at the university; and may be your bakery & Juicer. As far as you can imagine a business model, and have an online application, literally any extra service of good could be shared with others and generate revenue. The government as a policy maker & regulator in Ethiopia should work harder to cop up with this. A study by Ronabit consults in 2019 have reviled that the progress of ICT for revenue generation is growing relatively faster than ICT for process automation in Ethiopia.
Capital: What policy issues do you think is pertinent and streamline the ICT sector in such a way that it plays a pivotal role for enhancing trade and investment in the country?
Mesay: I call ICT – Smart everything. I mean smart building, smart manufacturing, smart transport, smart city; Going smart brings efficiency to business processes and generates revenue at the same time. Internet of things, Industrial Internet of things, Smart Manufacturing and smart Industry to enhance trade and investment in the capital and in the nation at all.
Capital: what is the role of government in expanding cloud computing?
Capital: How does Ethiopian businesses be ready in a tough competition that would face in connection to opening up their doors for African market because of CFTA?
Mesay: First, let us see what African Continental Free Trade area is. As you know, it is the largest free trade area with an estimated market size of almost 3.0 Trillion dollars. From the digital technology or digital economy perspective, it creates very big demand for e-commerce. Thus, intensive package delivery and trade logistics for customers in Ethiopia other member countries should be improved. Next, what is its benefit for digital economy? One Benefit of AfCFTA is that it lowers or illuminates tariff providing free access to the market and market information throughout Africa. Our private sector could benefit from these expanded markets for goods and services;
Capital: Are Ethiopia Businesses ready to reap these benefits?
Mesay: AfCFTA brings not only opportunities. It comes with its own challenges: One: policy makers and regulators of Ethiopia will greatly be challenged to develop or adopt the non-existent regulations. Two: It greatly increases competitive pressure on the already under-developed local private sector. Producers in Ethiopian may lose huge sales to foreign suppliers due to the cost associated to producing the goods or services. Large companies will definitely get advantage through economic of scale. They may sell cheaper, and Ethiopian companies may not compete in some goods and services. They may not even comeback to competition quickly.