Digital Payments Offer Enormous Opportunity for Ethiopia, Says Better Than Cash Alliance Africa Lead

Addis Ababa, April 5/2024 (ENA)  There is enormous economic opportunity for Ethiopia to benefit from digital payments, Better Than Cash Alliance Africa Regional Lead Oswell Kahonde told ENA. 

Speaking to the Ethiopian News Agency on the sidelines of Ethiopia Digital Payment Conference held today, Kahonde said digital payments really help to bring many people into the formal economy and that's the most important thing.

At the moment, Ethiopia has a formal economy with 90 million mobile money accounts, an increase like what we've not seen before, he noted, adding that financial inclusion is also growing in Ethiopia. 

A few years ago, financial inclusion was around 20 percent in the country, and now we're talking of almost 50 percent, Kahonde added. 

“What this means is that there's also still another 50 percent of the population that is outside the former banking system.” 

According to him, digital payments help to fast track and accelerate the inclusion agenda that the government is pursuing. 

The advantage that Ethiopia has is it's coming right to the end, if you compare it with other countries, Kahonde stated.

“There is no country in Africa that has ever experienced such exponential growth in digital payments, adoption or digital wallets adoption, 90 million in the space of four or five years. It's a great number.”

The demography of Ethiopia is also very encouraging. Over 60 percent of the population is youth, and when you introduce digital they are more likely to adopt digital instruments and digital channels than older people, he elaborated. 

So, there is a huge opportunity economically for Ethiopia to benefit from digital payments. 

Kahonde further said that the United Nations Better Than Cash Alliance has been working with  Ethiopia, one of the members, since 2016. 

“We have been working with the Government of Ethiopia to drive digitalization of payments, which has culminated to this exciting conference that we're having here,” the lead pointed out. 

National Bank Governor Mamo Mihretu said on his part the numbers of mobile money, and credit card users have reached 90 million and 42 million, respectively, over the past five years.

 

The digital payment service of cash transactions across the country has also been significantly increasing and seeing more and more growth.

According to him, laying foundation for digital payment in terms of strategies and fostering the overall ecosystem has been recognized by the government and National Bank of Ethiopia. 

For this reason, the National Bank of Ethiopia launched Ethiopia’s first ever National Digital Payment Strategy several years ago in order to provide framework for how responsible digital systems and payments can drive greater economic efficiency, transparency, financial inclusion and sustained inclusive growth.    

“The coming together of supportive policies, digital infrastructure and ecosystem players has in the past led tremendous explosion of the use of digital payments,” the Governor said. 

He revealed that the Bank projects to close the financial year at more than six trillion Birr in value transacted through existing financial channels.