We’ve spent years watching development organizations celebrate every new digital initiative as a silver bullet for poverty and poor governance. The conventional wisdom is seductive: build the digital rails, and development will follow.
But Ethiopia’s experience with digital infrastructure tells a different, more sobering story that should make us all pause before our next digital transformation pitch.
The Data Doesn’t Lie—It Confounds
According to a comprehensive new study by the Ethiopian Economics Association, Ethiopia presents a striking contradiction to global trends in digital development. While countries worldwide show strong positive correlations between e-government development and economic progress, social progress, and improved governance, Ethiopia demonstrates the opposite pattern since 2017.
Ethiopia’s development indicators—GDP per capita, Human Development Index, and structural change—all showed significant improvements until 2017, then began deteriorating despite continued investments in digital infrastructure.
This isn’t a minor statistical blip. We’re talking about a complete reversal of the relationship between digitalization and development outcomes.
The Real Culprit: Conflict, Not Code
The harsh reality is that domestic conflicts and political instabilities have created an environment where digital infrastructure becomes irrelevant—or worse, counterproductive. The study directly links Ethiopia’s digital paradox to widespread conflicts that have damaged crucial infrastructure including airports, roads, health facilities, power stations, telecom lines, and factories.
One estimate puts the direct costs of domestic conflicts and violent political unrest at ETB 8.8 billion (in 2020 prices), requiring a recovery budget of USD 44 billion over five years. When you’re dealing with destruction on this scale, building apps and digital ID systems feels like rearranging deck chairs on the Titanic.
This pattern happens in fragile states: governments pour resources into visible tech projects while the underlying social contract crumbles. Ethiopia’s fragile states index stands at 81.8%, making it one of the most fragile states globally, with demographic pressures (99%), factionalized elites (93%), and refugees and internally displaced persons (90%) topping the list of challenges.
Digital Divides Run Deeper Than Infrastructure
Even without conflict, Ethiopia’s digital foundation remains shaky. Only 19.7% of adults make or receive digital payments, compared to 49.5% in Sub-Saharan Africa and 64.1% globally. The gender gap is particularly stark: only 15.4% of women versus 24.3% of men engage in digital payments.
The National ID program—supposedly the cornerstone of Ethiopia’s digital transformation—tells an even more troubling story. By mid-March 2025, only 12.7 million registrations were completed, covering just 15.5% of the estimated adult population of 81.7 million. At this pace, the government’s 2030 target becomes unrealistic.
The challenges are systemic: security concerns in conflict-affected regions, low digital literacy especially among rural and elderly populations, resource constraints, weak coordination among stakeholders, resistance to digitalization, and fees that create barriers for low-income citizens.
The Infrastructure Mirage
Here’s what really frustrates me about the Ethiopia case: the government has actually made substantial progress on the technical side.
Currently, about 342 services are offered online by over 26 government organizations, with plans to reach 1,000 e-government services by 2030. Digital financial transactions have grown rapidly since 2019, reaching over ETB 4.7 trillion (US $82 billion) in value by June 2023.
But technical capability means nothing without social stability and trust. Ethiopia ranks 169th out of 193 countries in e-government development, with very low e-participation at 19.3%. The infrastructure exists, but citizens can’t or won’t use it.
Beyond the Usual Suspects
Most analyses of digital development failures focus on the usual suspects: poor infrastructure, low literacy, inadequate funding. Ethiopia’s experience suggests we need to look deeper at the political economy of digitalization.
Unlike global trends where digitalization improves governance, Ethiopia shows deteriorating governance despite rising e-government capabilities. The domestic conflicts have eroded rule of law, political stability, voice and accountability, regulatory quality, and government effectiveness.
This creates a vicious cycle: poor governance undermines trust in digital systems, while digital systems become tools of exclusion rather than inclusion in contexts of conflict and fragmentation.
What This Means for Development Practice
Ethiopia’s digital paradox offers three uncomfortable lessons for the development community:
- Context matters more than technology. No amount of digital infrastructure can compensate for fundamental breakdowns in social cohesion and state legitimacy.
- We need to sequence our interventions better. The study recommends that Ethiopia should ensure peace and security before expecting DPI to deliver development benefits, and should prioritize addressing conflicts and investment risks before scaling digital initiatives.
- We should measure political stability. The Ethiopia case isn’t an argument against digital development. It’s a reminder that technology amplifies existing social and political dynamics rather than transcending them.
Until we learn to build digital peace alongside digital infrastructure, we’ll keep producing more digital paradoxes.
