Learning
Research
July 15, 2025
Wingu News
Ethiopia stands at a turning point in its digital transformation. While there are over 28 million internet users and 85 million mobile connections as of January 2025, nearly 79% of its 130 million citizens remain digitally disconnected1. As Ethiopia pushes toward the goals outlined in its “Digital Ethiopia 2025” strategy, one priority is becoming increasingly clear, reliable infrastructure is not just an enabler of transformation, it is the foundation.
The Digital Ethiopia 2025 Vision
In 2020, the Government of Ethiopia launched “Digital Ethiopia 2025”, a national strategy to build a digitally driven, inclusive economy. More than just a technological shift, it represents a systemic rethink of how the country can engage in the global digital economy.
The strategy emphasises transformation across key sectors, from education and healthcare to governance and finance. Progress has been substantial. Over 130 government services have already been digitised2, and the “Digital ID” program, Ethiopia’s national digital identity system, has attracted over 12 million users3, indicating that the economic stakes are high.
The Infrastructure Challenge
Despite this vision, Ethiopia faces a significant infrastructure gap. The country's median fixed broadband speed of 9.01 Mbps lags considerably behind regional leaders like Rwanda and South Africa, where mobile speeds exceed 35 Mbps4.
Limited infrastructure impacts more than connectivity. Less than 1% of global data centre capacity is hosted in Africa5 forcing much of Ethiopia’s data traffic to be routed internationally, increasing latency, costs, and raising concerns around data sovereignty and compliance.
The rural-urban divide is stark. While connectivity in urban centres is improving, rural communities, where over 70% of Ethiopians live, struggle with limited or no access6. Without inclusive infrastructure development, digital transformation risks deepening inequality rather than bridging it.
Policy and Market Reform: A Turning Point
A core barrier has been regulatory. Before 2019, Ethiopia's regulatory landscape was indeed unfavourable for private Internet Service Providers (ISPs). The previous telecom law prohibited any entity from bypassing infrastructure established by the national telecom provider, which effectively created a monopoly and banned the entry of independent ISPs at the time.
This clearly demonstrates a long-standing environment that limited competition and delayed private sector participation in the telecommunications market. The law essentially entrenched the national provider's dominance, making it impossible for private ISPs to establish and operate their own infrastructure or even utilise alternative networks, thus stifling any potential for a competitive market before 2019.
Digital Ethiopia 2025 acknowledges these constraints and lays out reforms. Plans include a 50% increase in 3G distribution and an eightfold expansion of 4G coverage8. These are essential steps toward expanding high-quality access nationwide.
Beyond infrastructure, the strategy also prioritises device affordability, the expansion of mobile money, and regulatory changes to enable broader market participation, a necessary shift to create a robust digital ecosystem.
A Local Infrastructure Milestone: Addis ICT Park
A game-changing development has been the creation of Ethiopia’s first carrier-neutral, Tier III-standard data centre at the Addis ICT Park. This secure, redundant, and scalable facility offers local hosting capacity for enterprises and public services alike.
Co-located at the centre is ADDIX, Ethiopia’s first Internet Exchange Point (IXP). IXPs allow internet traffic to be exchanged locally rather than routed internationally. This significantly reduces latency, lowers operational costs, and keeps local data within national borders, a crucial factor for financial platforms, education tools, and enterprise software.
To mitigate Ethiopia’s power supply instability, the data centre is equipped with uninterruptible power systems (UPS), diesel generators, and redundant energy distribution, ensuring 24/7 uptime. These technical standards are not luxuries; they are requirements for hosting mission-critical services.
Infrastructure as a Platform for Services
Digital services cannot function without reliable infrastructure. Ethiopia’s Digital Financial Inclusion Strategy (2021–2025) promotes digital payment systems and mobile banking, all requiring reliable, secure connectivity to function effectively.
Services like TeleBirr demonstrate what’s possible when infrastructure supports access, security, and speed. The platform has processed billions of birr in transactions, but its growth depends entirely on consistent network coverage and data centre reliability.
The same applies to e-Government. The government’s follow-on strategies for 2025–2030 aims to further enhance e-Government delivery, demanding significant infrastructure upgrades, particularly in rural areas, but this requires far more capacity and long-term funding.
Ethiopia in the African Context
Africa as a whole is progressing slowly on digital resilience. The continent’s Internet resilience score in 2023 was just 34%, up only one point from the year before9. This reflects challenges in redundancy, connectivity quality, and hosting capacity across much of the continent.
For Ethiopia, the takeaway is clear: the digital race is regional, and infrastructure investment is critical to remaining competitive. Countries like Kenya and Rwanda have leveraged strategic infrastructure development to attract foreign investment and accelerate economic growth. or instance, Kenya’s Konza Technopolis and Rwanda’s Kigali Innovation City are frequently cited in regional digital economy assessments as successful infrastructure-led initiatives. Ethiopia’s reform plans will need to match or exceed this ambition to stay competitive, as comparative analyses such as those from the World Bank and GSMA indicate that infrastructure quality and regulatory openness are key determinants of digital competitiveness across Africa
The Investment Case
Investing in infrastructure is not just a national imperative, it’s a business opportunity. High-quality infrastructure unlocks productivity, enables cloud services, and attracts foreign investment. Ethiopia’s data centre and connectivity developments are part of a larger continental trend of growing investor interest in digital infrastructure.
Reliable infrastructure is especially crucial for businesses. Carrier-neutral data centres and IXPs reduce downtime, improve speed, and provide the reliability needed for everything from fintech and logistics to manufacturing and public health.
Ethiopia’s progress in this space positions it to meet this demand, if investments continue and are paired with enabling policy.
Building Technical Capacity
Infrastructure hardware represents only one dimension of digital transformation. Sustainable progress requires human expertise to design, implement, and maintain complex systems. Ethiopia is investing in digital skills development through vocational training programmes and university partnerships.
The Ethiopian Artificial Intelligence Institute (EAII) is working with infrastructure providers to support AI startups and research, creating demand for local compute power, secure hosting, and skilled personnel.
These partnerships show a recognition that human capital and digital infrastructure must evolve together. Without skilled professionals, even the best infrastructure remains underused.
Conclusion
Digital Ethiopia 2025 is more than a policy; it’s a national transformation agenda. But its success hinges on infrastructure: data centres, connectivity, power systems, human capital, and forward-looking policy.
The challenges are significant, from closing the digital divide and modernising laws to attracting capital and building skills. Yet the economic potential is immense, with the digital economy projected to contribute over ETB 1.3 trillion to GDP by 202810.
The infrastructure decisions Ethiopia makes today whether in broadband, power, cloud, or talent will shape its digital economy for decades to come.
With bold investment, smart regulation, and regional cooperation, Ethiopia can lead the next wave of African digital transformation. The road to Digital Ethiopia is challenging but well within reach.
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