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.
1) Claim — “Ethiopia shows a reversal since ~2017: e-government capability rose while development indicators (GDP per capita, HDI, structural change) improved until 2017 then deteriorated despite continued digital investments.”
What the data shows (summary):
E-government: Ethiopia ranks very low on the UN E-Government Development Index (EGDI) — recent EGDI ranking figures put Ethiopia in the high-160s (e.g., 169th in recent listings). That supports the article’s claim that e-government performance remains low even if some services exist. .
Digital investments/services: Multiple reports and the Ethiopian Economics Association / GDN pilot project note a rapid expansion in digital services and in value of digital payments (e.g., ETB ~4.7 trillion in value by June 2023, and government reporting of many digitalized services). .
GDP per capita & HDI trends: public data do not show a clean “reversal” beginning in 2017. UNDP HDI series shows gradual improvements across the 2010s into 2019–2022 (HDI rising from ~0.47 in 2017 toward ~0.49 by 2022/23), and World Bank / IMF series show GDP per capita figures that fluctuate (affected by exchange rates and methodology) but do not show a sustained fall starting exactly in 2017 — instead growth slowed in some years (COVID, then conflict years) but nominal/PPP indicators have often continued small increases. In short: the idea of a sharp, clean reversal in 2017 is misleading when compared with standard series. .
Verdict: Misleading. The article is correct that Ethiopia’s e-government ranking remains low and that digital services expanded — but the claim that development indicators broadly reversed after 2017 as a direct counter-trend to digital investments is not supported by the main international series (HDI and common GDP series) which show more nuance (continued small gains in HDI and mixed GDP behavior influenced by many shocks). .
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2) Claim — “The real culprit is conflict, which damaged infrastructure and produced huge direct/indirect costs (estimate cited: ETB 8.8bn; recovery budget USD 44bn over five years). Conflict made digitalization irrelevant or counterproductive.”
Evidence & reasoning:
Ethiopia experienced major internal conflicts (notably the northern war/Tigray conflict and widespread violence in multiple regions) that damaged infrastructure, displaced people, and disrupted services. Several reports and news outlets document infrastructure damage and heavy humanitarian/economic impact. .
The USD 44 billion recovery estimate for damage after the northern war appears in reporting (e.g., TheReporter Ethiopia summarizing a study) — this figure has been cited publicly as an order-of-magnitude recovery need. That supports the article’s numerical claim (but note the estimate’s provenance and methodology should be checked in the primary recovery assessment). .
Reasoning that conflict undermines the social contract, trust, and the physical conditions needed for digital services to deliver benefits is logically strong and consistent with development literature: damaged roads, power, telecoms, security concerns and population displacement reduce access to and trust in online services, and can make digital IDs or e-services exclusionary in practice.
Verdict: Largely true. Conflict has been a major, proximate cause of economic, service-delivery, and social disruptions that blunt or reverse the benefits of digital investments. The article’s core point — that digital tech alone cannot overcome large-scale destruction and political instability — is well grounded. .
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3) Claim — “Digital divides remain deep: low digital payment usage (~19.7% adults), strong gender gap (15.4% women vs 24.3% men). The National ID rollout is slow (article gives 12.7m registrations = 15.5% of adults by mid-March 2025).”
Evidence & reasoning:
Digital payments: World Bank/Global Findex and country briefs show Ethiopia’s financial/digital inclusion lags regional and global averages; briefing notes and analysis (UNCDF/NDPS briefings) point to large gender gaps and low penetration compared with some peers. The specific percentages in the article (19.7% / 49.5% SSA / 64.1% global) are plausible and consistent with Global Findex patterns that place Ethiopia below regional averages — but I’d treat the exact decimals as coming from the study the article cites (the Ethiopian Economics Association / GDN pilot). For policy reasoning, the claim is supported: digital payment adoption in Ethiopia is lower than global averages and gender gaps exist. .
National ID registrations: public reporting about the Fayda ID program shows rapid registration efforts; recent public statements (May–June 2025) from the National ID program and event coverage (ID4Africa) report over 15 million registered and government targets to expand further — this contrasts with the article’s 12.7 million by mid-March 2025 figure. In short, registration totals reported in various outlets differ (12.7m vs “more than 15m”), so the article’s precise 12.7m/15.5% number is plausible if taken from a particular snapshot, but it isn’t the only public figure and more recent reporting suggests higher cumulative registrations. Use caution: the national program has been reporting rapidly changing registration totals. .
Verdict: Partly true. The substance (big digital divide, gender gap, and that ID coverage is still far from universal) is correct. But the article’s exact ID registration number (12.7m) is one snapshot and other public statements report higher totals by mid-2025; the core claim that 2030 universal targets are ambitious remains valid. .
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4) Claim — “Ethiopia has many online services (hundreds) and large transaction volumes — but low e-participation and trust; infrastructure alone isn’t enough.”
Evidence & reasoning:
Reports and official sources note hundreds of e-services and a strong national strategy (Digital Ethiopia 2025, MESOB platform, statements on hundreds → 900+ services reported in 2025 proclamations). At the same time, UN EGDI e-participation metrics for Ethiopia are low (article’s 19.3% e-participation figure aligns with low e-participation scoring). This directly supports the article’s distinction between technical capability and actual citizen use/trust/participation. .
Verdict: True. The evidence supports the point that technical deployments (portals, services, transactions) can grow while citizen uptake, e-participation and trust lag because of non-technical constraints (trust, conflict, access, literacy, fees).
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Overall assessment of the article’s reasoning
1. Strengths
Correctly highlights a major, widely observed point: technology does not substitute for peace, functioning institutions, and trust. When political violence damages infrastructure and the social contract, digital investments have limited ability to deliver equitable development.
Uses plausible, documented examples (conflict damage, recovery cost estimates, low EGDI ranking, low e-participation) to show why digital projects can fail to realize expected benefits.
2. Weaknesses / Overstatements
The article overstates the idea of a clean reversal beginning in 2017 of development metrics tied to digital investment. International HDI and many GDP series show more gradual trends, not an abrupt deterioration starting precisely in 2017. The article compresses complex, multi-year effects (conflict episodes, COVID shock, currency changes) into a simple “digitalization up — development down since 2017” narrative — that’s simplification bordering on misleading. .
Some numerical claims (exact ID registration counts at a moment in time) are snapshots that may differ between government statements and independent summaries. The impression these numbers give (that the ID program is far behind) is valid in substance, but the numbers should be presented with source and date because they changed quickly. .
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Bottom line (short)
Core claim — that conflict and political fragility are the main reasons digital investments did not produce expected development gains in Ethiopia — is well founded and supported by evidence. (Verdict: Largely true.) .
But the article’s stronger statistical framing (a neat reversal of HDI/GDP since 2017 caused by digitalization) is misleading: the HDI and many GDP indicators do not show a tidy reversal starting in 2017; the country’s trajectory is more complex (COVID, exchange rate and data issues, multiple conflict episodes). (Verdict: Misleading / Overstated.) .
Practical takeaway: policymakers and donors should treat digital infrastructure as necessary but not sufficient — without security, functioning institutions, trust, inclusive design and affordability, digital systems underperform or risk exclusion.
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Sources (most important cited)
ICTWorks analysis and summary of EEA/GDN pilot study (article the user provided appears to be from here).
EEA / GDN pilot study material: “Development Impact of Digital Public Infrastructure and Inclusion in Ethiopia.”
UN E-Government Development Index / country information (Ethiopia EGDI and e-participation).
World Bank / IMF / macro data on GDP per capita and country economic reports (World Bank data pages, IMF country reports).
UNDP / Human Development Index country data (Ethiopia HDI values and trends).
Reports on digital payments growth (ETB ~4.7 trillion by June 2023) and National Bank / NDPS briefs; National ID program reporting and ID4Africa coverage (registration totals reported publicly varied by date; >15m cited in May/June 2025 reporting).
Reporting on conflict costs and recovery needs (coverage summarizing USD 44 billion recovery need).
I have mixed feelings about the article… I believe the claim that Ethiopia’s economy declined in the last years. And also the claim that digitalization increased during this time. So they are anti-correlated.
But then the article makes strong claims that technology investments had no or negative results. It almost suggests that digitalization is responsible for some of the overall decline. There is no mention of COVID, of monetary policy, and lots of other factors that plausibly played a much larger role.
I grant that digitalization is not a panacea. I grant that investments in social stability are very important. However, they are also very difficult… overall I’m not convinced that the government or donors made mistakes in their prioritization. That’s just hard to know.
Notwithstanding the article’s shortcomings, the lessons gathered are absolutely noteworthy and deserve to be on the checklist of every DPI being commissioned by Governments. Digitalization should no longer be a buzzword or a cliché; it should be a deliberate and coordinated process built on social cohesion, political stability, and other key factors to ensure digital investments deliver on their expected returns.,,,Real Digital Economic Transformation
It was most unpleasant reading through the Ethiopia experience with Digital