Since 2021, three World Bank-supported projects in Ethiopia have helped expand digital access significantly, benefiting more than seven million Ethiopians to date and facilitating the transition to a modern digital economy through support to the regulator and line ministry. Digital sector reforms have also helped drive economic growth and financial inclusion.

Key Highlights

• Between 2020 and 2024, Ethiopia gained 7 million new unique mobile subscribers, increasing mobile penetration from 26 to 33 percent of the population.
• Since 2018, mobile data costs have fallen by over 90 percent, enhancing affordability and access to digital services.
• Between 2020 and 2024, at least 4 million more people gained internet access, increasing coverage from 15 to 19 percent of the population. Although each of the new mobile users has access to broadband internet, not all use data, so 4 million is a minimum estimate for new internet users.
• By the end of 2024, mobile money users grew to 60 million, compared to none in 2020, driving financial inclusion, particularly for women.
• Since 2022, over 3,000 digital firms have been licensed by the Ethiopian Communications Authority, creating thousands of new jobs and fostering digital entrepreneurship.

Digital literacy is no longer a luxury—it is a necessity for inclusive development. Through our nationwide International Certification of Digital Literacy training initiative, we have equipped over 12,000 academic staff and nearly 200,000 students with essential digital skills, while also reaching close to 3,000 community members through university engagement programs. With 64 certified trainers deployed across 50 public universities and TVET institutions, and with localized content in Amharic and Afaan Oromo underway, we are building a digitally empowered generation aligned with Ethiopia’s ICT in Education Policy and national development goals.” Zelalem Assefa, PhD, Chief Executive Officer (CEO), ICT and Digital Education, FDRE, Ministry of Education.

Zelalem Assefa, PhDChief Executive Officer (CEO), ICT and Digital Education, FDRE, Ministry of Education

Challenge

Until 2021, Ethiopia’s telecom sector was served by a single state-owned provider, resulting in a monopoly environment. Ethiopia lagged other countries in eastern and southern Africa, with high costs and limited access for voice and data services, and no mobile money services. The conflict in the north of the country, between 2020 and 2022 caused an estimated $600 million in damage to communications infrastructure. The lack of competition and choice in service availability hindered economic growth, leaving millions without access to essential digital services or opportunities for economic inclusion.

Approach

The World Bank’s engagement around digital access, services, and inclusion in Ethiopia spans multiple projects, including the Digital Ethiopia Foundations Project, the Ethiopia Digital ID for Inclusion and Services Project (to expand digital identification to enable inclusive service delivery), and the Eastern Africa Regional Digital Integration Project (to advance digital market integration in East Africa). With over $630 million in International Development Association (IDA) support across the three projects, the Government of Ethiopia adopted a comprehensive approach to addressing the country’s digital challenges, focusing on fostering competition in the telecom market, improving connectivity, launching Digital ID and enabling digital service delivery. To liberalize the telecom sector, IDA supported policy and regulatory reforms, enabling market entry for private operators like Safaricom. These efforts increased competition, reduced prices, and enhanced internet quality. The private sector has committed more than $1 billion in license fees and a further $3 billion in investment in digital infrastructure, including in the expansion of mobile broadband, bridging connectivity gaps in underserved areas, particularly rural communities, and launching mobile money services.

Through IDA we leveraged our convening power to bring together stakeholders, facilitating collaboration between government entities and private sector players toward market liberalization. Capacity-building initiatives strengthened the regulatory environment and enhanced the technical expertise of Ethiopian institutions. Furthermore, innovative financial models, such as Public-Private Partnerships, mobilized an estimated $8 billion in private sector investment to accelerate digital transformation. Promoting women’s participation in the digital economy through digital ID and digital skills training programs was critical. This holistic strategy fostered entrepreneurship by creating an enabling environment for digital firms which has helped create jobs. These interventions are helping to expand access to digital services and catalyze economic growth.

The project interventions have contributed to liberalizing the telecom market and supporting the Ethiopian Communications Authority (ECA) to facilitate new market entry; investing in digital public infrastructure to enhance service delivery; promoting digital entrepreneurship, creating a vibrant ecosystem of newly licensed firms; and supporting policy reforms, including the passage of the Digital ID Proclamation and Data Protection Proclamation. This multi-faceted approach fostered innovation and economic growth, with significant benefits for underserved populations.

Results

Between 2020 and 2024, the IDA investments in the digital sector through the three projects have achieved the following results:

• Mobile Penetration: Increased over 33 percent, with 7 million new subscribers, particularly in rural areas, benefiting from improved connectivity and reduced costs.
• Internet Penetration: Grew to 19 percent, with 4 million additional users gaining online access, enhancing communication, education, and business opportunities.
• Telecom prices have fallen by around 70 percent since the decision to introduce competition was announced and Ethiopia was the world’s seventh cheapest country in the world for mobile data and voice in 2023, as ranked by the International Telecommunication Union (ITU).
• Mobile Money Growth: The adoption of mobile money services surged to over 60 million users by early 2025, providing access to financial transactions, savings, and credit, with an estimated 55 percent of users being women.
• Job Creation: IDA holistic strategy and emphasis on promoting women’s participation in the digital economy through digital ID and digital skills training programs fostered entrepreneurship by creating an enabling environment for 3,051 licensed digital firms, creating over 24,000 jobs directly.
• Digital Entrepreneurship: Between 2020 and 2024, more than 3,000 digital firms were licensed, fostering innovation and creating thousands of jobs across sectors such as fintech and e-commerce.
• Digital ID Policy Reform: The rollout of Digital ID reached 13 million citizens by early 2025, improving access to public and financial services while ensuring data security through the Data Protection Proclamation.
• Telecom Infrastructure Development: Safaricom’s entry into the telecom market, with a long-term commitment of $8 billion in investment (in addition to license fees of $1 billion), led to the construction of 2,500 new cell towers, significantly enhancing network quality and rural connectivity.
• Legislative Milestones: The passage of the Digital ID Proclamation in 2023 and the Data Protection Proclamation in 2024, advances Ethiopia's digital governance framework.

One World Bank in Action

The World Bank and the International Finance Corporation (IFC) collaborated to enable Safaricom’s market entry, mobilizing some $3 billion in additional investments for network expansion. This partnership was pivotal in constructing 2,500 new cell towers, increasing rural connectivity, and enhancing service quality. The IFC’s role included providing technical and financial support, which directly contributed to expanding Ethiopia’s telecom infrastructure and fostering competition in the sector. The Multilateral Investment Guarantee Agency (MIGA) has also provided investment guarantees to Safaricom.

World Bank Group Contribution

The World Bank Group played a pivotal role in supporting Ethiopia’s digital transformation.

• IDA financing:
  • Digital Foundation Project, $170 million
  • Eastern Africa Regional Digital Integration Project, Series of Projects II, $110 million
  • Ethiopia Digital ID for Inclusion and Services, $350 million
• IFC contributed $1.5 billion in equity investments to support Safaricom’s market entry, significantly enhancing connectivity and competition.
• MIGA provided around $1 billion in investment guarantees.

Partnerships

Major domestic partners included Ethiopia’s Ministry of Innovation and Technology, Ethiopian Communications Authority (ECA), Ethernet, and Telcos companies. The World Bank is also coordinating with the Japanese International Cooperation Agency (JICA), which was planning to support the Universal Service Fund, managed by ECA. The World Bank has also leveraged funding from the European Union under the Africa Connect program to expand international connectivity for EthERNet, the national research and education network.

Looking Ahead

The Ethiopia Digital Foundations Project will continue to focus on expanding rural connectivity and fostering an innovation-driven digital economy. Sustainability will be achieved by strengthening regulatory frameworks, promoting inclusive digital services, and encouraging private sector investments. The project provided seed funding for the development of a new $350 million Digital ID for Inclusion and Services Project. As of early 2025, more than 12 million Ethiopians had already received the Fayda Digital ID, with a target of reaching 90 million. Ethiopia is also a recipient of $110 million in IDA credits and grants for the Eastern Africa Regional Digital Integration Program.

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