Telecoms slow down development of Ethopian tech scene

Lemma, who co-founded iceaddis in May 2011, told HumanIPO the tech space in Ethiopia had much potential.

“There is untapped potential and knowledge,” he said. “The ICT educational sector is growing.”

He said, however: “Even though there is a high potential in the tech space in Ethiopia, what is very visible right now is the challenges and the many problems which hold it back.”

He said the main challenge was the telecommunications sector, which he said slowed down the acceleration of Ethiopia’s tech scene and meant it did not see the economic growth evident in other sectors, which came about due to reforms in spheres such as agriculture and education.

“The bandwidth capacity of Ethio Telecom is 8.6gbit/s. To compare, Kenya has 8.6Tbit/s and plans to expand to 15Tbit/s,” he said. “So I believe the main challenge for techies in Ethiopia – and for any small businesses in the country – is the poor and unreachable service of Ethio Telecom. The penetration still remains below 2 per cent. About 2.5 million people are connected to the internet.

Lemma also pinpointed “restrictive regulations” as a challenge to the development of the sector.

“Customs is one big problem for startups as it is almost impossible to import innovative and new technologies,” he said. “The banking system is old fashioned, and unproductive, the most advanced banking services banks provide is an ATM. There is no mobile money whatsoever.”

Yet, Lemma believes, if these difficulties can be overcome, Ethiopia has the potential, as the second most populous country in Africa and one of the fastest growing economies globally, to compete on a global scale through ICT.

“There is a huge market,” he said. “So techies can develop solutions for the local market and still make good revenues. This will help them to gain momentum in the country and aim big into the global market. The local market enables the developers to quickly bring products to the market and make profit.”

He said the country is already planning on joining the World Trade Organisation (WTO) in 2015, which he said would expose local solutions to the international market.

“Competing on a global scale is generally hard for East African companies – as the playing field isn’t level,” he said. “But the current solutions from iHub, such as Ushahidi, show that East African companies can indeed compete in the international market.”