Microenterprises, including sole proprietorships, food vendors, traders, artisans, and a wide range of service providers, are a cornerstone of Ethiopia’s economic activity. As the primary source of income for a substantial share of the population, particularly those excluded from the formal labour market, microenterprises and the informal economy account for an estimated 85% of employment in Ethiopia. Yet the widespread exclusion of microenterprises from the digital economy prevents them from unlocking significant productivity gains, thereby limiting national growth and socio-economic development opportunities.
Evidence from the 2022 After Access study, Digital technology adoption by microenterprises: Ethiopia report, revealed that among the small proportion of enterprises with internet access, the internet was primarily used for searching for information and instant messaging, followed by storing information and e-mail. Meanwhile, meaningful connectivity and productive digital usage were limited by barriers such as smartphone affordability, a lack of training and skills, and insufficient internet coverage. Findings ultimately concluded that the structural conditions for widespread digital uptake amongst microenterprises did not yet exist.
This policy brief synthesises these findings and offers recommendations to initiate coordinated action among government, regulators, and the private sector. These evidence-based recommendations include options to reduce the cost of digital devices, embed digital literacy within existing support and training programmes, and expand broadband and electricity infrastructure in rural and underserved areas. Taken together, these measures can expand digital inclusion and unlock significant productivity and resilience gains for a sector that employs millions of Ethiopians, particularly women and rural communities, while contributing to Ethiopia’s broader ambitions under the Digital Ethiopia 2025 Strategy.
