The exponential growth of digital payments in Ethiopia, as reported by the National Bank of Ethiopia (NBE), reflects a major transformation in the financial and economic landscape of the nation. Over the past five years, the digital payments sector has witnessed impressive growth, with an increase of over 750%. This staggering figure reflects the increasing adoption of electronic transactions by businesses and individuals across the country.
In 2023 alone, the total volume of digital payments processed reached a staggering amount of 5 trillion birrs, equivalent to nearly $87.99 billion USD. This dramatic increase underscores the growing importance of digital financial services in the Ethiopian economy and highlights the enormous potential of this transformation to drive economic growth and improve financial inclusion.
"In a country where much of the population lacks access to traditional banking services, digital payments offer a convenient and accessible alternative”
This impressive trend is largely attributed to the implementation of the Ethiopian Digital Strategy 2025, an ambitious plan aimed at modernizing and digitizing the entire Ethiopian economy. Launched by the Ethiopian government, this strategy aims to harness the benefits of information and communication technologies (ICTs) to drive economic growth, promote innovation, and improve public services.
One of the key priorities of the Ethiopian Digital Strategy is to expand access to digital financial services to the entire population. In a country where much of the population lacks access to traditional banking services, digital payments offer a convenient and accessible alternative. Thanks to the widespread use of mobile phones and the rise of mobile payment technologies, Ethiopians can now conduct financial transactions online with ease and efficiency.
This transition to digital payments presents numerous benefits for the Ethiopian economy. By enabling faster and more efficient transactions, digital payments can boost trade and encourage economic activity. Additionally, by reducing reliance on cash, digital payments can help combat fraud and corruption while strengthening the transparency and traceability of transactions.
In addition to the economic benefits, the rise of digital payments in Ethiopia also contributes to financial inclusion by enabling more people to access financial services. In a country where much of the population lives in remote rural areas, the use of mobile banking services can play a major role in providing essential financial services, such as payments, money transfers, and savings.
However, despite the progress made, there are still challenges to overcome to ensure that the rise of digital payments benefits all Ethiopian citizens. It is essential to strengthen digital infrastructure, expand access to the internet, and promote financial literacy to ensure that no one is left behind in this transition to a digital economy.