Brief Note on Ethiopia's Digital Payments Strategy from the National Bank of Ethiopia (NBE)
Ethiopia's Digital Payments Strategy (EDPS) was approved by the Council of Ministers on June 23rd, 2021.
The Vision EDPS proposes is to 'Build a secure, competitive, efficient, innovative, and responsible payments ecosystem to support a cash-lite and financially inclusive economy'. It includes 4 strategic pillars and 32 actions. At an event organized by the FDRE Ministry of Innovation and Technology on July 24th 2021 to assess progress on the implementation of the Digital Strategy 2025, ato Solomon Desta - Vice Governor of the National Bank of Ethiopia and responsible for Financial Institutions Supervision - stated that "the 32 actions will be completed in the next 3 years". The Vice Governor further stated that the NBE has drafted a National Financial Inclusion Strategy to complement the EDPS, an effort led by the National Financial Council chaired by H.E MoFED Minister Ahmed Shide.
With internet penetration increasing every year in Ethiopia, Medium, Small and Large Businesses are increasingly adopting digital marketing and digital payment solutions (QR code, contactless payments, cryptocurrencies and biometrics). With the telecommunication sector privatization and liberalization, internet penetration might reach upwards of 90% in the next 5 years. It is therefore important to ensure that digital payments are inclusive of all sectors and layers of society while making all transactions secure. Millions in Ethiopia are still unbanked and financially excluded hence digital payments constitute an opportunity for all to obtain access to formal financial and digital services.
The approval of the EDPS is timely as it will constitute an essential addition to the portfolio of policies recently issued in view of digitizing Ethiopia.