Is Ethiopia Africa's next tech mecca?

Ethiopia, a country often seen as a late comer to the tech boom in Africa, is now emerging as a potential fintech giant with a perfect storm of factors aligning for its tech industry's growth. In a recent interview on CNBC Africa, Mr. Yohannes, a prominent figure in Ethiopia's tech sector, highlighted the unique opportunities present in the country for tech investors. With a population of approximately 120 million people, a significant portion of whom are unbanked, and an expanding telecom infrastructure, Ethiopia is ripe for advancements in fintech. The expansion of Ethio Telecom, boasting over 70 million users and popular apps like Telebur with close to 40 million users, has significantly contributed to the increased connectivity in the nation. Additionally, the competition spurred by Safari Com's entrance into the telecom sector has driven innovation and growth, laying the foundation for further expansion in the coming years. The government's commitment to fostering a conducive environment for tech growth is evident through policies aimed at financial inclusion and digital transformation. By implementing a national financial inclusion strategy and a digital transformation strategy, Ethiopia is actively working towards attracting investment and driving innovation in the fintech industry. Mr. Yohannes also pointed out the practical implementation of these policies, such as the expansion of mobile money services through both state-owned and private enterprises, facilitating transactions across various sectors. This move towards financial inclusion is seen as a crucial step in transforming Ethiopia's economy and increasing access to digital payments, insurance, microfinance, and savings. While countries like Nigeria, Kenya, and South Africa have traditionally led the fintech revolution in Africa, Ethiopia's nascent but promising ecosystem stands out due to its unique blend of changing landscapes, innovative solutions, and increased liberalization. The forthcoming establishment of the Ethiopian Stock Exchange in 2024 or 2025 further signals the country's commitment to driving economic growth and attracting domestic and foreign investments. The stock exchange is expected to provide a platform for large companies to trade shares, fostering capital market development and opening up opportunities for smaller businesses. Additionally, the move towards increasing mobile penetration and electrification in the country is recognized as crucial for bridging the digital divide and enabling widespread access to technology. Improved mobile connectivity and access to electricity are seen as catalysts for transforming various aspects of daily life, from education to commerce, and moving Ethiopia towards a more digitally integrated society. Despite ongoing challenges, like the funding drought affecting technology globally, Ethiopia's tech sector is poised for significant growth and transformation backed by supportive government policies, private sector investments, and a burgeoning culture of innovation. As Ethiopia positions itself as a rising tech hub in Africa, the potential for exponential growth in the fintech industry holds promise for both investors and the country's economic development.