Ethiopia’s Economy and Emerging Digital Landscape

Ethiopia is a large country in the Horn of Africa, known for its rich history, diverse geography, and rapid economic growth. As of 2025, Ethiopia is Africa’s second most populous country (over 120 million people) and has one of the fastest-growing economies in the region. Despite significant progress, it remains a low-income economy facing challenges such as poverty and limited infrastructure. In recent years the Ethiopian government has embarked on reforms to liberalise key sectors and invest in technology. This article provides a comprehensive overview of Ethiopia’s economy from a business perspective, with a focus on the expanding internet and digital economy. It examines how the nation’s geography shapes economic activity, outlines the structure and performance of major economic sectors, and discusses the state of telecommunications and internet access. It also explores the most popular online platforms in use, the role of the country’s .et domain, leading technology-oriented companies, and the evolving digital marketing landscape. All figures are based on the most up-to-date data available, presented in a strictly formal tone with an emphasis on key statistics and trends.

Geographic Position and Influence on the Economy

Location and Regional Context

Ethiopia is located in northeastern Africa, forming part of the Horn of Africa along with neighbouring countries. It shares land borders with Eritrea, Djibouti, Somalia, Kenya, Sudan, and South Sudan. With a total area of about 1.1 million square kilometres, Ethiopia’s terrain is marked by high central plateaus, the Great Rift Valley, and lowlands in the east and west. This varied topography gives rise to diverse climates and resources across the country. The fertile highland regions support extensive agriculture, while the lowland areas provide pasture and some arable land. Ethiopia’s climate ranges from cool highlands to arid deserts, influencing the types of crops grown and livestock reared. The country’s geographic position in the tropics and its elevation (with many areas over 2,000 metres above sea level) make it suitable for high-value crops like coffee, which grows best in the highland climate and is Ethiopia’s most famous export product.

Landlocked Challenges and Trade Routes

A significant geographic factor affecting Ethiopia’s economy is its landlocked status. Since the independence of Eritrea in 1993, Ethiopia has had no direct access to the sea. As a result, the country relies heavily on overland routes to access seaports in neighbouring countries. The primary trade corridor is via Djibouti: over 95% of Ethiopia’s import-export trade by volume is transported through the port of Djibouti on the Red Sea. This reliance on a single corridor makes trade logistics crucial for economic activity. To mitigate this, Ethiopia has invested in transport infrastructure such as the Addis Ababa–Djibouti electric railway and upgraded highways to improve efficiency and reduce costs. The landlocked nature also spurs Ethiopia to seek alternative port access through agreements with Sudan (Port Sudan) and Somaliland (Berbera Port) to diversify its trade routes. Being at the crossroads of East Africa, Ethiopia’s location allows it to engage in regional trade within the East African and Horn regions, and it is a member of regional economic blocs like IGAD and the African Continental Free Trade Area (AfCFTA), which aim to boost intra-African commerce. However, high transportation costs and dependency on neighbours for port access remain challenges that influence import prices and export competitiveness.

Natural Resources and Influence on Economic Activity

Ethiopia’s geography endows it with certain natural resources that shape economic opportunities. The highlands have ample water from rainfall and rivers, including the Blue Nile, which originates in Ethiopia. This has enabled the country to invest in large-scale hydroelectric projects – most notably the Grand Ethiopian Renaissance Dam (GERD) on the Blue Nile. The GERD, completed in 2023, is Africa’s largest hydropower plant and is expected to generate substantial electricity for domestic use and export, potentially earning around USD 1 billion annually in energy sales. Abundant water and elevation also support agriculture; Ethiopia produces coffee, tea, cereals, pulses, and oilseeds as staple and export crops. The fertile soils of the highland regions, especially in Oromia and the Southern Nations region, make agriculture a backbone of the economy. Additionally, the country has deposits of minerals like gold, tantalum, and gemstones, though mining remains a smaller contributor to GDP. The geographic distribution of population (roughly 77% rural and 23% urban) reflects the agrarian base: most people live in rural highlands engaged in farming. This has implications for internet and digital access, as rural areas are harder to reach with modern infrastructure. Nonetheless, geography has also offered economic advantages – Ethiopia’s capital, Addis Ababa, sits at a strategic highland location and serves as a regional hub (it is the headquarters of the African Union and many international organisations). Overall, Ethiopia’s location and landscape have a dual impact: providing resources and a large agricultural base, while also posing logistical challenges that the nation continues to address through infrastructure development and regional cooperation.

Overview of Ethiopia’s Economy

GDP, Growth and Economic Size

Ethiopia’s economy has expanded significantly over the past two decades. In 2023, the country’s Gross Domestic Product (GDP) reached an estimated USD 156 billion in nominal terms, making it one of the largest economies in East Africa. In terms of purchasing power parity (PPP), which accounts for cost of living, GDP was approximately USD 394 billion, reflecting the considerable domestic market size. Real GDP growth has been robust: the economy grew by around 7.1% in the fiscal year 2022/23, recovering from the impacts of the COVID-19 pandemic and internal conflicts. During the mid-2000s to late 2010s, Ethiopia frequently recorded annual growth rates near 10%, fuelled by government-led infrastructure investment and a strategy of agricultural and industrial development. This rapid growth has lifted millions out of extreme poverty, but average incomes remain low. GDP per capita is roughly USD 1,270, indicating that Ethiopia is still a low-income country (among the poorest per capita in Africa despite its large overall economy). Controlling inflation has been a challenge in recent years – inflation was about 30% in 2023, driven by rising food prices and global commodity costs. The government’s ongoing economic reforms, dubbed the “Homegrown Economic Reform” agenda, aim to sustain high growth while stabilising prices and exchange rates, as well as moving Ethiopia towards middle-income status in the next decade.

Sectoral Composition of the Economy

The structure of Ethiopia’s economy is transitioning gradually from an agrarian base towards more diverse sectors. Agriculture remains a cornerstone, accounting for approximately 32% of GDP in 2022 and employing the majority of the workforce. Key agricultural products include coffee (Ethiopia’s primary export earner), oilseeds, pulses, cereals like teff (a staple grain), and horticultural products such as flowers. Agricultural exports provide much of the country’s foreign exchange; for example, coffee alone involves millions of smallholder farmers and contributes significantly to export revenues. However, agricultural productivity is often affected by droughts and traditional farming methods, and the sector’s share of GDP has been slowly declining as other sectors grow. Services have become the largest component of GDP, contributing around 40% as of 2023. This sector encompasses wholesale and retail trade, transport, tourism, banking, education, and public services. Rapid urbanisation and a growing middle class have spurred services like trade, hospitality, and telecommunications. Industry (including manufacturing, construction, and utilities) makes up roughly 28% of GDP. Within industry, construction and infrastructure development have been particularly prominent drivers of growth – Ethiopia has invested heavily in roads, railways, dams, and housing. Manufacturing is still developing but has seen foreign investment in areas such as textile and apparel factories, leather goods, cement, and steel production. The government established industrial parks (for example, in Hawassa and Adama) to attract manufacturing firms, especially in garments, to boost exports and create jobs. While still relatively small, the industrial sector’s expansion is important for diversifying the economy. Notably, Ethiopia also has a growing energy sector due to new hydropower capacity, which is expected to support industrialisation and potentially generate export revenue from electricity sales to neighboring countries.

Trade, Exports and Investment

Ethiopia engages in international trade but runs a persistent trade deficit, importing far more than it exports. In 2023, exports of goods and services were about USD 10.8 billion, whereas imports reached roughly USD 22.9 billion. This gap is financed by external aid, loans, remittances from the Ethiopian diaspora, and foreign investment inflows. Ethiopia’s main export commodities are agricultural products: coffee is the largest export by value, followed by items like gold, oilseeds (such as sesame seeds), pulses, leather and leather products, live animals, and flowers. More recently, some light manufactured goods (textiles, garments) have started to contribute to exports from the industrial parks, though volumes remain modest. On the import side, Ethiopia spends a significant portion of its foreign exchange on fuel (petroleum), capital goods (machinery, vehicles, electrical equipment), chemicals, pharmaceuticals, and food items. The reliance on imported fuel and capital goods reflects the ongoing development needs for infrastructure and industry. Major trading partners for Ethiopia’s exports include countries like China, the United States, Saudi Arabia, the United Arab Emirates, and various European Union members; for imports, China, India, and the Middle East are major sources of manufactured goods and oil. To help close the trade gap and gain foreign currency, the government has been encouraging foreign direct investment (FDI) in priority sectors. Ethiopia became one of Africa’s top FDI destinations in the 2010s, attracting investment in manufacturing (especially from China, Turkey, and India), agriculture, and more recently in telecommunications. The liberalisation of telecom and plans to open up the financial sector have increased investor interest. The country is also part of the African Continental Free Trade Area, which in the long run could expand export opportunities by reducing trade barriers in Africa.

Employment and Demographics

Ethiopia’s labour force reflects its young and growing population. With a population exceeding 120 million and a median age of about 19 years, there is a large pipeline of new entrants to the job market each year. It is estimated that around 65%–70% of the workforce is employed in agriculture (mostly smallholder farming), even though agriculture generates only about one-third of GDP – highlighting a productivity gap between rural and urban economic activities. The services sector (including informal trade) employs a substantial share of the remainder, while formal industry and manufacturing jobs are still limited but slowly increasing. The official unemployment rate was around 8% in 2021, but underemployment is prevalent, and youth unemployment (ages 15–24) was about 23%. Creating jobs for the millions of young Ethiopians entering the labour market annually (estimated at 2 to 3 million per year) is a key developmental challenge. The government has recognised that private sector growth, especially in new industries and the digital economy, will be crucial to absorb this labour supply. Poverty rates have fallen in the past decades (the national poverty headcount declined from roughly 39% in 2005 to 24% in 2016), yet a significant portion of the population remains near the poverty line and vulnerable to economic shocks. Urban migration is accelerating as people move to cities like Addis Ababa in search of better opportunities. This urbanisation, along with improvements in education enrolment, provides a foundation for a more skilled workforce in the future. However, there is still a shortage of highly skilled labour in technical fields, which is an impediment to some sectors. Recognising this, Ethiopia has invested in expanding higher education and technical training. The demographic profile – a young, growing population – is a potential demographic dividend for economic growth if sufficient jobs and productivity gains can be achieved. It also means there is a rising consumer base, which is attracting businesses and driving demand for services, including digital services, as more of the youth become tech-savvy and connected.

Internet Access and Telecommunications

Telecommunications Infrastructure and Providers

The telecommunications sector in Ethiopia has historically been dominated by a state-owned monopoly, Ethio Telecom, which for many years was the sole provider of telephone and internet services nationwide. This has begun to change with recent reforms. In 2022, Ethiopia opened its telecom market to competition for the first time, licensing a second major operator – a private consortium led by Safaricom (a Kenyan telecom company) in partnership with global firms. Ethio Telecom still remains the largest operator by far, serving tens of millions of customers, but Safaricom Ethiopia (launched in late 2022) has started rolling out its network in major cities and regions. The entry of Safaricom has sparked increased investment in telecom infrastructure. Both companies are expanding coverage of mobile voice and data services, including 3G and 4G networks. Ethiopia’s telecom infrastructure includes a national fibre-optic backbone connecting major cities, microwave links to reach remote areas, and international gateway connections via submarine cable links through Djibouti (providing connectivity to global internet networks). While fixed-line telephone and broadband infrastructure exist, they are limited mostly to urban centres and businesses; the vast majority of Ethiopians rely on wireless mobile networks for communication. In recent years, Ethio Telecom has upgraded its systems and even launched pilot 5G mobile services. In 2022, Ethio Telecom activated initial 5G sites in Addis Ababa (with technical support from Huawei), making Ethiopia one of the few sub-Saharan African countries beginning to adopt 5G technology. By 2024, Ethio Telecom was extending 5G to other cities on a trial basis, aiming to introduce high-speed services for industrial and commercial uses. The government has also indicated plans to partially privatise Ethio Telecom by selling a stake to foreign investors, hoping to inject more capital and expertise into the sector. Overall, the telecommunications infrastructure is improving rapidly due to competition and investment, but coverage and quality still vary greatly between urban and rural areas.

Internet Penetration and Broadband Access

Internet access in Ethiopia has been growing steadily, though from a very low base. As of early 2024, there were about 24.8 million internet users in the country – roughly 19.4% of the population having some form of internet access. This marks a gradual increase from previous years (internet penetration was around 15% in 2020), thanks to the expansion of mobile data services and more affordable devices. However, over 80% of Ethiopians remain offline, indicating a large digital divide. Most internet connectivity is via mobile broadband rather than fixed connections. Fixed broadband (such as home fibre or DSL lines) is extremely limited, with only a small percentage of households in big cities subscribing, due to high costs and underdeveloped wired infrastructure. In contrast, mobile broadband (3G/4G cellular data) is the primary mode of internet access across Ethiopia. Ethio Telecom’s 3G network covers most of the populated areas, while 4G LTE service has been introduced in Addis Ababa and many regional cities and towns. The arrival of Safaricom Ethiopia is expected to increase 4G coverage competition and capacity. Bandwidth and speeds are improving but can still be inconsistent; outside of major urban centres, internet speeds tend to be slow, and network congestion is common. Additionally, internet service has sometimes been disrupted by government-imposed shutdowns during periods of civil unrest or national exams, reflecting the regulatory control the state still exerts over digital communications. Broadband affordability is another challenge – the cost of data relative to income is high for many Ethiopians, which limits regular internet use primarily to urban residents, businesses, and those who can afford smartphones and data plans. Despite these issues, internet use is expanding yearly, and the government has set ambitious targets under its Digital Ethiopia 2025 strategy to increase broadband penetration by improving infrastructure and encouraging private sector participation.

Mobile Phone Usage and Digital Connectivity

Mobile phones are the principal means of connectivity for Ethiopians, and mobile usage has grown explosively. By 2024, there were about 77.4 million active cellular mobile subscriptions in Ethiopia, equivalent to roughly 60% of the population. This figure counts SIM cards, and many people, especially in cities, own more than one SIM (for example, one for personal use and one for work – using different networks to maximize coverage and deals). The unique mobile subscriber rate is therefore lower than 60%, but still a majority of adults have access to a mobile phone. The vast expansion of mobile networks over the last decade means that even rural villages often have basic voice coverage (2G), enabling SMS and simple mobile services. Mobile network coverage for 3G data services extends to most towns and many rural areas. Smartphone adoption is rising quickly as affordable Android phones (some priced under $100) become available from brands like Tecno, itel, and Samsung. It is estimated that around a third of mobile connections are on smartphones with internet capability, while others use basic feature phones. This uptake of smartphones is crucial for the digital economy, as it determines the potential user base for online services and apps. With Safaricom’s entry, competition in the mobile market has led to aggressive promotional offers and improved service quality in some areas. Total mobile subscriptions increased by nearly 12% between 2023 and 2024, indicating strong demand. Mobile internet users form the majority of Ethiopia’s internet users; many people access social media, messaging, and news primarily through mobile data on their phones. The government and telecom operators have also rolled out initiatives to extend connectivity, such as building more telecom towers in underserved regions and introducing community internet centres. While challenges remain – such as occasional network outages and the need to expand electricity supply for charging devices – the proliferation of mobile phones has laid the groundwork for a more connected population. Ethiopia’s sheer scale (over 120 million people) means that even moderate increases in mobile and internet penetration translate to millions of new users coming online, presenting a significant opportunity for digital businesses and services.

Digital Platforms and Services in Ethiopia

Social Media and Communication Platforms

Given the relatively low internet penetration, the absolute number of social media users in Ethiopia is modest but growing rapidly. As of 2024, there were around 7 million active social media users in the country (about 5–6% of the population). The most widely used platform by far is Facebook, which has an estimated user base of over 7 million accounts in Ethiopia. Facebook serves as a primary social networking site and an information hub for many internet users; businesses and public figures also use Facebook pages as a key channel to reach audiences. Other global platforms are present but with smaller reach: Instagram has about 1 million users (particularly among urban youth interested in lifestyle and fashion content), and LinkedIn has around 1.1 million registered members (used mainly by professionals in cities like Addis Ababa). Twitter (recently rebranded as “X”) is less common, with only a few hundred thousand users, often used by academics, journalists, and the diaspora community. In addition to these, YouTube is popular for watching music, news, and entertainment videos, though it is primarily accessed without registration. Messaging apps are extremely important digital tools in Ethiopia. WhatsApp is ubiquitous as a free messaging and calling app, used by a large share of smartphone owners for everyday communication (although exact user numbers are not published, it is likely tens of millions of Ethiopians use WhatsApp). Telegram is another widely used messaging platform; it gained popularity due to its Amharic language channels and has been used both for social chatting and disseminating news (Telegram’s usage spiked during times when other services were restricted). These social and communication platforms have become integral to urban life and are increasingly penetrating into smaller towns. They enable not only personal communication but also serve as marketing platforms, news dissemination channels, and forums for community discussion. However, it should be noted that social media reach is still largely limited to urban and educated segments of society, given the overall internet access constraints.

E-Commerce and Online Services

Ethiopia’s e-commerce ecosystem is in its early stages but shows promise as digital connectivity improves. A combination of factors such as low internet penetration, limited electronic payment options, and logistical challenges have historically hindered online shopping. Despite this, several online marketplaces and digital services have emerged. One notable entrant was Jumia, a pan-African e-commerce company, which launched operations in Ethiopia in the mid-2010s. Jumia initially offered online retail, travel booking, and classifieds under different brand names (Jumia Market, Jumia Travel, etc.), but it struggled with the nascent market and later closed its local operations. More recently, Jumia has indicated interest in re-entering Ethiopia as conditions improve. In the meantime, local startups have stepped up: platforms like ZMall and Alle (Ethiopian online marketplaces) allow customers in Addis Ababa and other cities to order products ranging from electronics to groceries for delivery. These services remain limited in scale, but they represent a growing urban trend of online shopping convenience. Additionally, traditional businesses such as supermarkets, electronics stores, and fashion retailers have begun to establish an online presence through social media and websites, taking orders via phone or messaging apps. Beyond retail, other online services are gaining traction. Ride-hailing apps, inspired by Uber’s model, have become popular in Addis Ababa – for example, the locally developed app Ride (also known as ZayRide) connects passengers with taxis and has seen widespread adoption, improving urban transportation convenience. Online food delivery services (like Deliver Addis) cater to a niche but growing customer base in the capital. The Ethiopian government has also started offering digital services: a notable example is the e-Visa platform which allows foreign visitors to apply for Ethiopian visas online, and various ministry websites provide downloadable forms and information. The expansion of digital financial services (discussed below) is also enabling e-commerce growth by providing cashless payment options. While e-commerce is not yet mainstream in Ethiopia, the trajectory is upward, with more businesses exploring online models as internet access and trust in digital transactions gradually increase.

Mobile Money and Digital Finance

One of the most transformative digital services in Ethiopia is the rise of mobile money and digital financial platforms. For many years, Ethiopia’s financial sector was closed to telecommunications-based banking, but this changed in 2021 when Ethio Telecom launched its own mobile money service called Telebirr. Telebirr allows users to deposit, withdraw, and transfer money using a mobile phone, even without a traditional bank account. By 2023, Telebirr had achieved over 50 million registered users, making it one of the largest mobile money platforms in Africa in terms of user base. Its rapid adoption was facilitated by Ethio Telecom’s extensive reach and the demand for convenient payment solutions in a cash-dominated economy. Telebirr is used for various purposes: peer-to-peer transfers, paying utility bills, purchasing goods from merchants who accept mobile payments, and even for services like public transportation in some cities. The introduction of competition in telecom has also brought M-Pesa to Ethiopia – Safaricom’s renowned mobile money service (first popularised in Kenya). Safaricom Ethiopia received approval in mid-2023 to roll out M-Pesa; within a few months of launch, over 5 million Ethiopians signed up on M-Pesa as well, attracted by its international reputation and integration with Safaricom’s mobile services. Together, Telebirr and M-Pesa are accelerating the shift toward a digital economy by enabling cashless transactions. Apart from telecom-led services, Ethiopia has seen a wave of fintech startups entering the digital finance space. Companies such as Chapa and ArifPay are developing online payment gateways and point-of-sale solutions to help businesses accept electronic payments (important for e-commerce growth). There are also initiatives like HelloCash (a mobile banking service launched by a consortium of microfinance institutions and banks) and Kacha (one of the first privately licensed mobile money providers) expanding financial inclusion. With very low banking penetration (only a small fraction of the population has bank accounts or credit cards), these mobile and digital financial services offer an accessible alternative for millions of unbanked citizens. The government and National Bank of Ethiopia have begun to issue regulations to supervise digital financial services, balancing innovation with consumer protection. The digital payments boom in Ethiopia is expected to facilitate other online businesses – for example, ride-hailing and e-commerce services can leverage Telebirr or M-Pesa for seamless payments. Overall, mobile money has quickly become a cornerstone of Ethiopia’s digital economy, allowing money to flow more efficiently through the economy and connecting individuals and businesses financially across distances.

The .et Country Code Top-Level Domain

Administration and Structure of .et

Ethiopia’s country code top-level domain (ccTLD) is .et, which was introduced in 1995 for entities associated with Ethiopia. The .et domain is administered by the national telecommunications provider – originally the Ethiopian Telecommunications Corporation (now part of Ethio Telecom). Ethio Telecom serves as the registry operator, managing the database of .et domain names. The domain is structured to allow registrations at the second level (example: mycompany.et) and at various third-level categories. For instance, there are specific second-level domains designated for certain types of organisations: .com.et for commercial enterprises, .gov.et for government institutions, .org.et for non-profit and non-governmental organisations, .edu.et for educational establishments, .net.et for network service providers, and so on. These classifications help organise the namespace and indicate the nature of the entity using the domain. To register a .et domain, local presence requirements historically applied (meaning the registrant often needed to be based in Ethiopia or have a representative in the country), and the prices for domain registration have been relatively high compared to other African domains. Ethio Telecom, with technical support from international partners, maintains the infrastructure for DNS services of .et, ensuring that Ethiopian websites are accessible on the global internet.

Usage and Role in the Local Digital Ecosystem

The uptake of the .et domain within Ethiopia’s digital ecosystem has been somewhat limited, though it holds symbolic importance for national identity online. Many Ethiopian government websites use the .gov.et subdomain as a standard (for example, the official sites of the Prime Minister’s Office and various ministries are under .gov.et addresses). Local universities and educational institutions similarly use .edu.et domains. However, outside of government and academia, a significant number of Ethiopian businesses and organisations have preferred generic domains like .com or .org for their online presence. This is partly due to the ease and lower cost of obtaining generic domains internationally, and partly due to the earlier monopolistic and bureaucratic process of registering .et names. For instance, a private business might choose example.com or example.net instead of example.et to avoid higher fees or administrative hurdles. Nonetheless, some Ethiopian companies and media outlets have adopted .et domains, especially as the process has been gradually liberalised. Using a .et domain can signal a strong local brand association with Ethiopia, which is valuable for businesses targeting the domestic market. It also helps keep internet traffic local, potentially improving access speeds for Ethiopian users when visiting .et sites hosted within the country. The Ethiopian Internet Exchange (ETIX) and other local hosting initiatives have aimed to route domestic traffic more efficiently, and local domains can contribute to that effort. As Ethiopia’s digital economy grows, there is an opportunity for greater adoption of .et domains, provided that registration costs become more affordable and awareness increases among businesses about the option. The .et domain remains an integral part of Ethiopia’s online sovereignty – giving the country control over its own internet namespace – and efforts by Ethio Telecom and ICT authorities continue to promote its use as part of building a robust national internet presence.

Leading Internet-Based and Technology Companies

Telecommunications Giants

In Ethiopia’s digital economy, the most prominent companies are the telecom operators that provide the fundamental connectivity. Ethio Telecom is the largest enterprise in the ICT sector – a state-owned telecom giant with over 80 million subscribers (including mobile, fixed line, and internet customers). Ethio Telecom is not only a service provider but also an infrastructure owner, running nationwide telecommunications networks and international gateways. In recent years, it has also ventured into digital finance through its Telebirr mobile money service. Ethio Telecom has long been one of the biggest companies in Ethiopia by revenue and employees (with tens of thousands of staff across the country). The introduction of competition brought Safaricom Ethiopia into the market as a second major telecom company. Safaricom Ethiopia is a subsidiary of the Kenyan telecom operator Safaricom, backed by a consortium including Vodafone and Japan’s Sumitomo Corporation. Since its launch in 2022, Safaricom Ethiopia has rapidly gained a foothold – by mid-2024 it had about 5 million active subscribers and was expanding network coverage in several regions. Safaricom’s entry has made it one of the top technology investors in Ethiopia, committing over a billion dollars to network rollout and services. Its mobile money platform M-Pesa is another significant offering, positioning Safaricom as not just a telecom provider but also a financial services player. Together, Ethio Telecom and Safaricom dominate the internet landscape in Ethiopia, effectively controlling access to voice and data for the populace. Their growth and competition are seen as key to improving service quality and expanding digital access to more Ethiopians.

Local Tech Companies and Startups

Outside of telecommunications, Ethiopia’s technology sector consists of a burgeoning startup ecosystem and a few established IT firms. Over the past decade, Addis Ababa has become home to tech hubs and incubators (such as IceAddis) nurturing young entrepreneurs. A number of startups have gained recognition for leveraging technology to solve local problems, especially in fintech and logistics. Some of the notable Ethiopian tech companies and startups include:

• Chapa – A fintech startup providing a payment gateway and digital payment solutions for businesses, enabling online transactions and e-commerce payments within Ethiopia.

• ArifPay – A digital payments company developing point-of-sale systems and a mobile wallet platform, aimed at modernising how merchants accept cashless payments.

• Ride – A popular ride-hailing service (also known as ZayRide) that connects passengers with taxi drivers via a mobile app, offering an Uber-like experience tailored to Ethiopian cities.

• Gebeya – An edtech and talent marketplace that trains software developers and connects them with employers, operating as a pan-African platform but co-founded in Ethiopia.

• Kifiya Financial – A technology company that has provided digital solutions for utilities and payment services, known earlier for launching a digital wallet service and agent banking networks.

These and other startups are gradually expanding the tech landscape. They often collaborate with traditional industries (for example, banks partnering with fintech startups) and are beginning to attract investment from local and international investors. The government’s emphasis on innovation (through initiatives like Startup Ethiopia and tech parks) supports these ventures, though challenges like limited funding and infrastructure persist. Nonetheless, these companies represent a growing private tech sector that complements the big state and foreign firms.

Global Tech Presence and Initiatives

Ethiopia’s large market has also drawn the interest of global technology firms, though their direct presence is still emerging. Companies such as Huawei and ZTE (from China) have long been active in Ethiopia as key suppliers of telecommunications equipment – they played major roles in building Ethio Telecom’s mobile and fibre networks and continue to support network expansion (including 4G and 5G rollout). Transsion Holdings, a Chinese mobile phone manufacturer known for brands like Tecno and itel, has captured a dominant share of Ethiopia’s handset market by offering affordable smartphones tailored to African consumers – making it a significant player in the diffusion of technology. Western tech giants are increasingly paying attention as well: Microsoft and Oracle have offices or partnerships in Ethiopia focused on enterprise software and cloud services for the burgeoning corporate sector. In the startup space, global venture capital firms and accelerators have begun scouting Ethiopian talent; for instance, programmes by Google Developers or Mastercard Foundation have provided training and funding to Ethiopian tech entrepreneurs. Moreover, Ethiopia’s government has engaged companies like Amazon Web Services (AWS) and IBM for advisory roles in digital transformation projects and to explore cloud infrastructure development in the country. While Ethiopia is not yet a regional tech hub on the scale of Nairobi or Lagos, these global tech initiatives and the presence of international companies signal confidence in the country’s digital potential. Continued economic liberalisation – such as the anticipated opening of the banking sector to foreign investors – could further increase the involvement of multinational tech and finance companies in Ethiopia. In summary, the landscape of tech companies in Ethiopia ranges from the dominant telecom operators and innovative local startups to the supportive roles of international tech firms, all contributing to the development of a dynamic digital economy.

The Digital Marketing Landscape in Ethiopia

Adoption of Digital Marketing by Businesses

Digital marketing – the use of online platforms to promote products and services – is a relatively new but fast-growing practice in Ethiopia. As internet access expands, businesses have begun to recognise the importance of having an online presence and engaging customers through digital channels. Adoption is most visible among medium to large enterprises in urban areas. Banks, airlines, telecommunications companies, and consumer brands in Ethiopia are increasingly active on social media and the web. For example, banks promote new banking apps or services via Facebook posts and sponsored ads, while telecom operators run extensive digital campaigns to advertise data packages or mobile money services. The hospitality and travel sector (hotels, tour operators, Ethiopian Airlines) also utilises digital marketing, especially to reach international audiences through search engines and social media. Small and medium-sized enterprises (SMEs) are joining the trend as well: many restaurants, boutiques, and educational institutions in Addis Ababa have created Facebook pages or Instagram accounts to showcase their offerings. Despite this progress, overall adoption remains at an early stage – a large segment of businesses still rely on traditional marketing methods (such as billboards, TV, and radio), especially when targeting the majority of the population that is offline. Nevertheless, the trajectory is clear: as more Ethiopians come online, companies are steadily shifting marketing budgets toward digital platforms that can target the growing connected demographic.

Platforms and Strategies Used

The platforms dominating digital marketing in Ethiopia mirror global trends, with some local nuances. Facebook is the leading platform for business marketing due to its broad user base; companies frequently use Facebook pages to post updates in both English and local languages (Amharic or Oromo), and they boost important posts through paid Facebook ads to reach larger audiences. Visual-centric businesses, such as fashion retailers and cafes, leverage Instagram to display products and lifestyle images; they often collaborate with local influencers who have substantial follower counts on Instagram or TikTok to promote brands in an engaging way. LinkedIn is utilised by B2B companies and recruitment firms to establish professional branding and to advertise job opportunities. Telegram channels have emerged as a marketing tool as well – businesses sometimes create Telegram broadcast channels where subscribers can get frequent updates or promotional offers, which is effective given Telegram’s popularity for news content. In terms of content strategy, Ethiopian businesses are learning to tailor their messaging to the platform: for example, using short, catchy videos and graphics for social media, and crafting bilingual content to reach both English-speaking and local-language audiences. Email marketing is used on a limited scale, primarily by travel agencies and NGOs, but it is not yet widespread in the private sector due to limited consumer email usage. Search engine marketing (such as Google Ads) is not heavily utilised by local firms, partly because online commerce is still nascent; however, companies in the tourism sector and export-oriented businesses do engage in some search advertising to capture international interest. Overall, social media marketing is the cornerstone of digital strategy in Ethiopia at present, with content creation for Facebook and increasingly Instagram/TikTok absorbing much of the digital marketing effort.

Challenges and Limitations

Ethiopian businesses face several challenges in fully embracing digital marketing. The foremost issue is limited internet penetration – with only about 20% of the population online, digital campaigns cannot reach the majority of consumers, especially those in rural areas. This limits the return on investment for online advertising outside major cities. Additionally, digital literacy is relatively low among both business owners and consumers; not all companies have in-house expertise to manage social media pages effectively or to analyse campaign metrics, and many potential customers may not be comfortable with online interactions or e-commerce. Another challenge is the lack of reliable payment gateways for online advertising and commerce. Until recently, Ethiopian businesses struggled to pay for services like Facebook Ads or Google Ads due to foreign exchange controls and lack of international payment options (credit card ownership is very low). The rise of mobile money and fintech solutions is starting to ease local e-commerce payments, but paying global advertising platforms often still requires assistance from intermediaries or use of diaspora connections. Content-wise, creating engaging digital content in multiple languages can be demanding; Ethiopia’s linguistic diversity means marketers often need to produce material in Amharic, Oromo, Tigrinya, and English to maximise reach, which requires additional effort and cultural sensitivity. Furthermore, occasional government-imposed internet shutdowns or social media blockages (for security reasons) create uncertainty – a business might find its digital campaigns disrupted if platforms become temporarily inaccessible during those periods. Finally, the cost of internet data for users is high relative to income, which affects how consumers engage with online content (for instance, watching long videos or livestreams may be avoided to save data).

Current Trends and Outlook

Despite the challenges, the momentum behind digital marketing in Ethiopia is increasing. Recent estimates suggest the digital advertising market in Ethiopia is growing at around 7–8% annually. It is projected to reach a modest USD 80 million in annual revenue by 2027, up from a smaller base in the early 2020s. This growth is fuelled by both demand and supply factors: on the demand side, every year more people join social media (for instance, Facebook’s Ethiopian user base grew by over 15% from 2023 to 2024) and spend more time online, making digital channels more attractive for advertisers. On the supply side, new digital marketing agencies and freelance professionals have emerged in Addis Ababa who help businesses create online marketing strategies, manage ad campaigns, and produce localised content. The use of influencers is becoming a notable trend – brands partner with popular content creators on TikTok or YouTube who can weave marketing messages into their entertaining content, a tactic that resonates well with younger audiences. As competition intensifies in sectors like telecom, banking, and retail (especially with foreign entrants and new startups), companies are likely to further increase their digital marketing efforts to differentiate their brand and directly engage customers. In the near future, one can expect more sophisticated use of analytics and targeted advertising as businesses become more comfortable with digital tools. The government is also encouraging businesses to embrace digital channels as part of the broader digital transformation agenda. In conclusion, while traditional media still holds significant sway in Ethiopia due to its vast offline population, the digital marketing landscape is firmly on an upward trajectory, gradually reshaping how companies communicate with consumers in the online era.