By now, Huawei has been in Ethiopia for more than 20 years, with more than 100 employees. As the CEO of the company, my team and I often hold group discussions to estimate how Ethiopia is catching the wave of digitalization and how our company can ride in this wave.
The first input for our analysis comes from official published policies and national strategies.
Like many other developing countries, ICT technology is continuously transforming the market and society in Ethiopia. According to the FDRE Ten-Year Development Plan, by 2030 100% of population will have access to mobile and internet services; over 3000 tech start-ups will receive support from the innovation promoting mechanism; private sector jobs opportunity will take up to 80% of the technology and digitalization industry. It envisages huge potential for Ethiopia and for our business.
According to Homegrown Economic Reform Agenda and Digital Ethiopia 2025 strategy, ICT will become an enabler of transformation in Ethiopia, which creates new sources of productivity and job growth to the whole country. The telecom reform has already commenced with visible social effect; while digital ID system, WoredaNet, public internet access centers are also highlighted in the planning of the Ethiopian government on ICT and relevant fields. These are the country’s blueprints of digitalization, and also could be regarded as a beacon of our business.
Huawei and Oxford Economics found out the magnitude of digital spillover effect of ICT investment: every $1 invested in digital technologies over the past three decades has added $20 to GDP, on average. In large economies like China, the digital economy has taken up to 38.6% of GDP. Digitalization can play different roles in various industries, such as Tourism (e-travel), Healthcare service (e-health), Finance (WoredaNet), Retail (e-commerce), and government (e-government). Agriculture, manufacturing, and service sector can share benefit from improvement, transformation, and disruptive innovation that ICT infrastructure provides.
The second input comes from the current development stage of the country.
Huawei annually published Global Connectivity Index (GCI) gave ranks of 79 nations on ICT investment, ICT maturity, AI and digital economic performance. Based on 2020 ranking, Ethiopia belongs to Starter cluster together with Kenya, India, and others. Starter countries usually experience a faster economic growth rate and they are narrowing the gap with the leading economies thanks to improvements in broadband coverage and affordability.
However, the ICT industry in Starter cluster is still focusing on expanding connectivity coverage to enlarge digital access to more people. The insufficiency of basic infrastructure makes it more vulnerable during economic recession and harder to recover. During the hard time, people in Starter cluster countries are more likely to cut investment in IT budget for non-digital purposes, which makes the industry foundation less stable than the Frontrunner countries. This might further enlarge the digital gap between developed and developing countries.
Nevertheless, Huawei is trying to do our best to close bridge the digital divide of Ethiopia with our partners and other industrial stakeholders. Currently, one of our main business is to assist Ethio Telecom to improve coverage network and enrich service portfolio. 4G LTE network has been expanded from Addis Ababa to other regions, which has linked more and more unconnected population to broadband internet services.
Apart from telecom business, Huawei also commits to build a long-lasting ICT ecosystem in Ethiopia, especially in talent cultivation. Up to now, 40 universities has registered as Huawei ICT Academy partner. We have built an ICT practice center in Addis Ababa University in June with a training capacity of 2000 people over three years, organized ICT competition for undergraduate student in August with 1000 participants from the country.
And the last input comes from multiple external partners of Ethiopia, including insight and plan from international organization, financial institutions, and sovereign countries who expressed their readiness to help Ethiopia seize the opportunities of digital revolution. As a private company, Huawei is eager to learn about and participate in these opportunities.
This year, World Bank approved financing agreement for credit for Ethiopia Digital Foundations project with an amount of 200 million USD, and projects will focus on digital economy, enabling legal and regulatory environment; digital government and connectivity; digital business and entrepreneurship; project management; contingent emergency response component.
And recently, China announced that it will work together with African countries, including Ethiopia, to formulate and implement a plan for China-Africa digital innovation partnership, and proposed efforts in six aspects. First, strengthen digital infrastructure to ensure unimpeded information flow for socioeconomic development. Second, nurture the digital economy and promote the integrated development of the digital technology and the real economy. Third, advance digital education to produce a talent pool for digital innovation and thus remove the bottleneck. Fourth, enhance digital inclusiveness to make sure services benefit all African people. Fifth, jointly ensure digital security and improve digital governance capability. Sixth, build cooperation platforms to stimulate progress with exchange.
As a participant of Ethiopia’s digital transformation, Huawei is confident in the long-term prosperity of the country. We will continuously improve our service to meet contractual liability as well as external social responsibility, such as gender equality, technological inclusiveness, youth ICT literacy. Advanced technologies such as AI, IoT, VR, Cloud have already been deployed in many industrial scenarios around world, we will welcome these cases together with Ethiopian people.
Chen Mingliang is CEO of Huawei Technologies Ethiopia PLC