Year-over-year (YOY)—sometimes referred to as year-on-year—is a frequently used financial comparison for looking at two or more measurable events on an annualized basis. Observing YOY performance allows for gauging if a company’s financial performance is improving, static, or worsening. For example, you may read in financial reports that a particular business reported that its revenues increased for the third quarter on a YOY basis for the last three years.
Digital ID’s Sprint: Africa’s race to register ‘Invisible Millions’
African governments are racing to bring the “invisible millions” once left out of formal services into national systems, unlocking their access to healthcare, banking, education, and security.
At the ID4Africa AGM 2025 in Addis Ababa, in May, Identity (ID) Authority leaders showcased how digital identity on the continent is reshaping the continent’s future.
These authorities from Ethiopia, Tanzania, Somalia, Benin, and Malawi, affirmed digital IDs are becoming key to enhancing service delivery as they lay efforts to fast-track roll-out efforts to reach universal access targets.
Ethiopia aims to provide digital identification to its entire population by 2027.
Since the launch of the country’s National ID Program, Fayda, less than three years ago, it has registered more than 15 million people, including those in remote parts of the country.
Ethiopia’s National ID Program, Executive Director Yodahe Zemichael said the ID is now mandatory for banking in Addis Ababa, with a nationwide roll-out planned for 2026.
Ethiopia’s Prime Minister Abiy Ahmed termed digital ID a “critical infrastructure for modern governance,” aligning it with the country’s Digital Ethiopia 2025 strategy.
“For decades, identification in Ethiopia was fragmented, serving only a portion of the population and leaving millions behind. That’s why we made the choice to build a national ID guided by the aspirations of Digital Ethiopia 2025,” said Abiy.
Tanzania targets issuing a National ID from birth as part of its universal identity effort, the Jamii Number program.
The initiative includes biometric registration for infants and a legal framework to assign ID numbers at birth.
Tanzania’s National Identification Authority (NIDA), Director of ID management, Edson Guyai while acknowledging technological challenges in capturing biometrics for children under five said children’s IDs will be linked to their mothers’.
“We need more research, more study to make sure we find a proper solution. But as we work around from zero to five years, we will be using National ID of the mother. So we link the National ID of the mother to the child’s National ID, in order to identify a person uniquely,” Guyai explained.
Tanzania has registered more than 25 million people, accounting for 81% of its adult population and the ID system has been adopted by 124 institutions, supporting mobile wallets, health coverage, and social protection schemes.
Somalia aims to register all adults by 2030 and enroll 15 million people by the end of 2025.
Somalia’s National Identification and Registration Authority (NIRA) announced it is launching online biometric self-registration via mobile phones later in November to increase accessibility.
NIRA Director, Abdiwali Ali Abdulle said only 5% of Somalis currently have bank accounts due to a lack of formal documentation, which also hinders law enforcement and development. The digital ID system he said will unify fragmented regional IDs, ease onboarding for financial services, and support national security efforts.
“We are now developing online biometric registration, which actually will reduce our dependence on the physical centers. This application will help people to register themselves using their mobile phones.” said Abdulle.
Benin with 98% of its population of more than 30 million people registered in the national system, targets full digital ID coverage by 2028.
Benin National Agency for the Identification of Persons Director General, Aristide Adjinacou, said Benin is using artificial intelligence and engaging skilled members of its diaspora especially in data analytics to drive innovation and efficiency.
“We adopted a decree where we are able to attract Beninis from the diaspora and every other citizen. Wherever they are living, they can come in Benin to contribute to our transformation, depending on their skills,” said Adjinacou.
The ID system processes nearly 200,000 biometric authentications daily and is integrated with more than 80 institutions. The challenge now he said is reaching the final 2%, often remote or culturally distinct communities.
“We need to address those specificities. Every community have its own challenge, its own way of living and it’s important for us to be able to address them. This is another big challenge. It’s our last mile,” said Adjinacou.
Since the introduction of the first-generation ID in 1978, Kenya has consistently embraced technology to modernize its identification systems. A semi-automated system followed in 1995, paving the way for the Maisha Project, launched in 2023.
Today, more than 33 million Kenyans are enrolled in the initiative, which integrates civil registration—including birth, school enrollment, national ID issuance at age 18, and death registration, into a unified digital system.
“Kenya started way back 20 years ago to create identity management as a public utility enterprise. We have so many developments that have leveraged in identity cards, including in telecommunications sector, mobile payment, said National Registration Bureau Head Christopher Wanjau.
Throughout the last decade, more than 30 African countries have launched or are developing digital ID programs, with African Union reports that more than 70% of member states now have some form of digital ID infrastructure.
Other African countries that have made significant strides include Rwanda, Ghana, Nigeria, South Africa and Kenya.
Rwanda is among the leaders, with more than 90% adult enrollment and IDs integrated into healthcare, banking, and government platforms.
Ghana’s Ghana Card has similarly achieved more than 90% adult registration and is now mandatory for tax, SIM, and social services.
Nigeria’s enrollment is more than 100 million out of its population of 220 million, with the country’s authority citing mobile phone registration a key driver. Still reaching rural and marginalized communities remains a major hurdle for the West African economy.
According to the World Bank and World Economic Forum, more than 500 million people in Africa lacks proof of legal identity.
Government unveils new investment incentives to boost foreign investment
To further open the economy to international players, the government has introduced new investment incentives designed to stimulate private sector growth, including foreign investment in key sectors. The newly enacted directive replaces all previous laws and offers unprecedented tax benefits, such as extended tax holidays.
Issued last week by the Ministry of Finance, the directive establishes a comprehensive framework for income tax exemptions and customs duty waivers. Experts note that this new law employs a sector- and location-based approach to determine the duration of tax holidays, marking a significant shift from past policies.
For instance, developers operating in Special Economic Zones (SEZs) outside Addis Ababa and the surrounding Oromia Special Zone can receive income tax exemptions for up to 15 years.
In contrast, investments within Addis Ababa and its vicinity qualify for a 10-year tax holiday.
The directive also outlines conditions under which tax holidays may be revoked, including providing false information, terminating a project, or failing to meet reporting requirements.
In such cases, investors must repay the exempted taxes along with applicable interest and penalties.
Additionally, businesses that incur losses during the tax holiday can offset those losses against profits earned in the first half of the post-holiday phase.
Beyond tax incentives, the directive introduces customs duty exemptions to promote the use of locally produced goods.
Investors who source materials domestically instead of importing them may qualify for duty-free benefits.
Exemptions are also available for importing capital goods, construction materials, and spare parts, subject to phased importation and government verification.
The law emphasizes local procurement, requiring investors to purchase goods domestically if they are available in sufficient quantity, quality, and at competitive prices. Duties paid on inputs used to manufacture locally sourced products may be refunded.
The directive also outlines sector-specific provisions.
SEZ operators, including developers, sub-developers, administrators, and enterprises, are eligible for extended tax holidays, while special considerations apply to leasing companies and tourism-related investments, accompanied by detailed documentation requirements.
To ensure transparency, the directive mandates that the Tax Authority submit quarterly reports on tax exemptions and their impact on revenue. Under Article 9.2, the Tax Authority must provide investor data to the Ministry of Finance by the 15th day of the first month of each quarter.
The directive includes detailed annexes listing the required documents for both tax and customs incentives, streamlining the application process for investors.
This reform highlights the government’s commitment to fostering a more competitive and investor-friendly business environment.
Ethiopia must ban crypto mining as well as trading
Ethiopia has recently begun to attract the world’s attention in connection with cryptocurrencies. The 2024 Global Crypto Adoption Index calculated by Chainalysis has Ethiopia ranked second in Africa, superseded only by Nigeria, and 26th in the world. Ethiopia is singled out as the fastest-growing African market for retail-sized stablecoin transfers. Furthermore, Ethiopia ranks fourth globally as a Bitcoin-mining destination, after the United States, Hong Kong and the wider Asia. Apparently, it leads its African peers by a mile in Bitcoin mining capacity. Hence, some observers are heralding Ethiopia as “the new global hub for crypto mining”. But sadly, all this is not an achievement to be proud of, but rather a brand on our technology preference, resource management and moral judgment.
The background: Cryptocurrencies (in short “crypto”) are digital or virtual tokens that can be traded for fiat currencies on centralized exchanges or peer-to-peer trading platforms. A type of cryptocurrency whose value is pegged to fiat currency is referred to as “stablecoin”. The first and most publicized cryptocurrency is Bitcoin, launched in 2009. Crypto’s defining feature is that ownership or conveyance is first established by solving complex codes aka “hashes” iteratively using specialized machines in a competitive process called “mining”, and then recorded on a decentralized and updatable digital ledger called “blockchain”. Owners of crypto tokens are required to set up a crypto “wallet” – be it digital, paper or device – in order to store those tokens securely. So, no external party, neither a bank nor a legislative authority, is needed to create, deposit, or transfer cryptocurrencies. And users retain considerable anonymity.
However, cryptocurrencies’ raison d’être is far from convincing, and their supposed economic benefits do not hold up empirically. Indeed, the spectacular rise of crypto, especially in the United States, has been found to be part ideological, part promotional and it has fed on individual investors’ irrational optimism. It is not an outcome of a plausible economic rationale.
First of all, the widespread narrative that cryptocurrencies are a form of money begs the question of what is meant by money. Crypto tokens do not properly serve any of the three primary functions of money: (a) they are not widely accepted as a medium of exchange; (b) they are undependable store of value, for their prices are highly volatile; and (c) they are not a unit of account, as few goods and services are quoted in crypto units.
The concept of cryptocurrencies replacing conventional money nationally and the U.S. dollar in international trade over time is a fairytale that is not feasible. To begin with, fiat money, in general, serves its primary functions efficiently, except in crisis times. Besides, as argued by the IMF, the widespread use of cryptocurrencies poses substantial risks to financial stability and the effectiveness of monetary policy. If one needs a natural experiment, crypto (specifically Bitcoin) has so far had two auditions for legal tender status, held in El Salvador and the Central African Republic, and both have been to no avail. Last, whether we like it or not, the U.S. dollar’s dominant role as an international currency is here to stay for the foreseeable future.
Cryptocurrencies are also incredibly risky as an investment vehicle. Unlike fiat currencies, which have legislative backing, unlike commodities such as gold and oil, which have underlying economic uses, and unlike even stocks, which reflect – at least partly – the values of companies, cryptocurrencies derive their value entirely from what people are willing to pay for them. The crypto market is thus highly speculative. A consequence of this is that repeated market crashes have become inevitable, leaving behind a trail of naïve and financially vulnerable investors who lost their savings. The price plunge, by the way, applies to the so-called stablecoins, which are supposed to have a fixed value.
The assertion that the blockchain technology used by cryptocurrencies makes the latter “futuristic” is also refuted by the facts. The world has already moved from a barter system and commodity money through to fiat money and checks and finally to electronic payment systems such as debit and credit cards, mobile and internet banking. The hallmark of this transition is significant reduction in transaction costs and much greater convenience. By contrast, creating or transferring cryptocurrencies is awkward, technically complex and inherently costly. Mind you, processing a single crypto transaction requires a large network of miners as opposed to just a trusted bank in the case of a fiat money transaction. And so, in the words of Paul Krugman, a Nobel Prize winner in economics, “crypto remains a solution in search of a problem”.
The implication for Ethiopia is clear: while the country’s vision to digitally transform and become a hub for technological innovation is highly commendable, it would be a major policy error for the government to mix up value-adding technologies, such as artificial intelligence (AI), and technologies that flatter to deceive, like crypto.
But, there is one area where crypto has proved its worth, and that is criminality. There have been several instances of cryptocurrencies playing a key role in tax evasion, money laundering, capital flight, drug trafficking, extortion, political election meddling, and financing terrorism. Bribing public officials, in particular, has gotten easier. Why should these officials worry about registering their wealth or disclosing their bank accounts when they can anonymously stash their ill-gotten money in cryptocurrencies? In fact, the crypto ecosystem itself has been infested with thieves, hackers and scammers, and crypto appears to be well on track to join the likes of Ponzi and Pyramid schemes as one of the most fraudulent investment products of all time.
Given this, the 2025 National Bank of Ethiopia Proclamation deserves credit for prohibiting trading cryptocurrencies or using them as a means of payment. However, instead of “monitoring global trends”, the NBE should evaluate cryptocurrencies on their own merit. The fact is that the claimed benefits of crypto have already been realized by existing technologies. Today, Ethiopians can choose between various forms of electronic money; digital transactions have exceeded cash transactions. And there is no logical or legitimate ground for the NBE’s goal of “deepening usage of digital payments” to extend to cryptocurrencies. Neither is financial inclusion a compelling reason to adopt crypto. You do not want to bring more of your citizens into a most risky and deceptive monetary scheme.
The story does not end here. What is even more baffling is that mining cryptocurrencies – creating those economically valueless encryption keys – consumes gigantic volumes of electricity. The adage goes: “With mining rigs, energy goes in, money comes out”. Typically, thousands of miners in a crypto network compete to validate transactions and thereby generate new cryptocurrencies using energy-intensive computational power. It is estimated that to mine Bitcoin alone devours as much electricity as many countries. But energy is scarce all over the world, and many governments, most notably China, have banned crypto mining. So miners are always on the lookout for cheap, uninterrupted electricity supply and welcoming jurisdictions.
And it seems that crypto miners have now launched, so to speak, a full-scale invasion on Ethiopia. The Ethiopian government has made pitiful resistance so far, apparently won over by windfall gains in U.S. dollars. Also, some mining companies have camouflaged their operations with “digital development”, “data mining”, and “green energy management/development” projects. A fig leaf of “electricity infrastructure development” is added too. Other miners are probably conducting underground operations in basements and bedrooms, or just embedded in other businesses. In any case, the Ethiopian Electric Power reportedly earmarked around 600MW hydroelectricity to crypto – mainly Bitcoin – mining facilities in 2024 alone. This electricity supply is equivalent to about 10% of Ethiopia’s installed hydroelectric power capacity, or to more than the combined capacity of Tekeze, Melka Wakena and Fincha hydropower plants.
This is misallocation of our resources for a variety of reasons. First, the underlying notion that Ethiopia has “cheap hydroelectric power in abundance” is a misconception. Ethiopia remains one of the least electrically powered countries in Africa, with less than 60% of its 130 million population currently on the national electricity grid. And domestic demand for electricity is increasing very rapidly, and it will not be easily satisfied even with the completion of the hard-built Grand Ethiopian Renaissance Dam (GERD), which will almost double the country’s hydropower potential. Second, the opportunity cost is huge. While Ethiopia has gained some millions in foreign currency, it comes at the expense of tens of thousands of households or several manufacturing firms capable of generating even more hard currency long term. In fact, electric power has long been identified as one of the major bottlenecks in truly transformative economic sectors such as manufacturing. Finally, if crypto mining continues to siphon off energy on such an epic scale, how and when is Ethiopia going to meet its universal electrification and economy-wide energy transition goals?
Under these conditions, the government’s decision to export electricity to neighboring countries might be justified, at least on geo-political grounds. But supplying large amounts of scarce electricity to a fallacious and trendy industry is not only opportunistic but deeply irresponsible as well. That is no way to finance development projects. And right now the inevitable pressure on the national grid is causing grotesquely repeated power blackouts in Addis Ababa and the rest of the country, much to the frustration of homes and especially businesses. The Ethiopian electricity provider cannot go on blaming tall trees, bad weather, or poor infrastructure. What is particularly sickening about these power failures is that they are being imposed on top of inefficient customer service, and that the Ethiopian Electric Utility has recently used its monopoly power to raise prices exorbitantly on most types of subscribers, making a dent in meager household budgets.
This is not to say, however, that Ethiopia should host crypto mining if the latter somehow manages to cut back its immense energy requirements. For to do so would still be saying something like: “You cannot use or trade cocaine here, but you can produce and export it from here”. Ethiopia could, in effect, be aiding and abetting a global scam network.
The bottom line is that the Ethiopian government, unless it is willfully ignorant, must sever all ties with crypto – be it through trading or mining, and the sooner the better. Yes, the crypto faithful, and even some well-meaning people, call for a regulatory framework instead. But we want to regulate and tax genuine, problem-solving industries. The whole crypto thing doesn’t serve the long-term best interests of our society. We need to wake up and smell the coffee.
Matias Assefa is an Economic and Business Analyst based in Addis Ababa. He can be reached at matias.assefa@gmail.com
