Internet shutdown costs Ethiopia at least $50 mln daily, says expert

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By Yared Nigussie

An investment consultant said that Ethiopia would lose up to $50 million daily if internet shutdown is implemented by the government as it did previously.

Yared Hailemeskel, Managing Director of YHM Consulting told Origins Business that, “I guess in the contemporary economic condition, which is more relies on digital-based businesses unlike the previous time, Ethiopia would lose up to $50 million in a day if the internet shutdown implemented.”

Immediately after the loss of internet connection ride-hailing services will cease work because the GPS and electronic billing system failure, he says. “TV stations would lose up to 20,000 Birr advertising cost in a minute due to internet blackout.”

Exporters of perishable items such as strawberry will lose their income and unable to receive orders due to internet shut down, he further explained.

You can’t book a flight, tourists will be unable to apply for Ethiopia’s VISA, and reserving a hotel rooms is unthinkable without internet, he said.  “We can also mention the high demurrages which will be levied on companies if communication is blocked and unable to reach out with port authorities”.

“You can’t do businesses without internet nowadays, which is similar with you won’t expedite productions at factories without electricity, he stressed.

Yared presented a paper findings in a panel discussion focused on “The Impact of Internet Shut down on Business in Ethiopia” held on Tuesday at Golden Tulip Hotel.

The panel discussion was organized by Center for Advancement of Rights and Democracy (CARD), a board-led, for-not-profit organization.

A new report also revealed on the panel discussion. The research report titled “BUSINESS TRAMPLED: Demystifying the Impact of Internet Shutdown on Start-up Businesses in Ethiopia” is a part of CARD’s advocacy for improved accessibility of the Internet in Ethiopia.

 “We’re twenty years behind the digital world,” as Yared puts it. He also shared his experience, which is a challenge posed on his business when Ministry of Education ordered internet shut down following theft of national exam after leaks through online platforms reported in 2016/17 fiscal year.

“The loss of income among investments including exporters, importers, fintechs and e-learning commerce’s is high,” he explained. “We can’t prosper without internet.”

Yared compared Ethiopia’s $100 billion GDP, which is less than Jeff Bezos’s wealth, generated by the Amazon, an American multinational technology company.

Internet shut down have been imposed in recent years, mainly from 2016 onwards due to protests, national exam leaks through online platforms, assassination of government officials such as Ambachew Mekonnen (PhD), former President of Amhara region, Seare Mekonnen (General), Chief of Staff of the Ethiopian National Defense Forces, and following the murder of Ethiopian singer Hachalu Hundessa, among others.

Yohannes Eneyew, a PhD candidate at Faculty of Law at Monash University, Australia, also presented his research findings. He stated that delivery services would lose 5,000 Birr in a day due to internet black out.

He further stated that a 10% expansion of internet penetration can improve Ethiopia’s GDP by 0.9 to 1.5%.

There are 25.6 million Internet users in Ethiopia. “But, the digital divide is too high and rife,” Yohannes said.

Kalkidan Mulu is a Founder of Keen Afrique Educational Services PLC, one of the panelists said that lack of employment frequently drives startup activity in developing countries, market opportunities and entrepreneurs, resulting in more startup creations in the technology sector.

Introduction of innovative digital services, the continent’s tech startups have attracted the interest of both international and local investors, with the total funding value growing from less than $190 million in 2015 to over $2 billion in 2021.

In Ethiopia, only one out of four people have access to the Internet. Nonetheless, the people connected to the Internet have unreliable connectivity due to repeated partial and complete internet shutdowns.

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