Welcome to this week's edition of Addis Fortune, where we cover the latest business and economic developments. This week, we explore Addis Abeba's ambitious urban expansion plans, new data privacy laws targeted at protecting citizens in the digital age, the economic potential of the outsourcing and data mining sectors, and the impact of lifting the cap on franco valuta imports.
Addis Abeba City Administration is embarking on the second phase of its ambitious urban development initiative, with plans to transform three key districts and continue modernising the city's infrastructure. The new phase will involve a comprehensive transformation of three key districts, continuing the city's drive to modernise its infrastructure and urban landscape. The plan, spearheaded by the city's Plan & Development Bureau, seeks to harmonise the design across various corridors, hoping to create a more cohesive and aesthetically appealing cityscape. The study, which deployed spatial data to assess current conditions and identify issues, includes roads and plots in the Bole, Lemi Kura, and Akaki-Kaliti districts. The overriding plan aspires to connect Addis Abeba's urban core with its outskirts, integrating with projects like the Shegger Grand Road. The second phase targets several strategic areas, incorporating 4,747 hectar plots and stretching 43 kilo meter. This phase covers areas from Anbessa Garage through Mebrat Hail, Goro, Koye Roundabout, Bulbula, and Airport Cargo. The route will weave through Bole Bridge, moving toward Goro Roundabout and culminating at Summit "Fiyel B'et," CMC roundabout, and Jackross village.
Ethiopian Communications Authority is set to require entities that collect personal data to register with them, including federal institutions, schools, civil society organisations. This comes in light of a recently enacted law aimed at protecting personal data and ensuring citizens' privacy rights are upheld in a growing digital space. Passed by Parliament four months ago, the law outlines a comprehensive set of responsibilities for data controllers—those who determine the purpose and means of processing personal data. Controllers must gather personal data solely for "specified, explicit, and legitimate purposes" and are required to keep this information accurate, up-to-date, and processed securely to prevent unauthorised access or breaches. The proclamation imposes strict obligations on data controllers and processors accountable for compiling with data protection principles. The Authority, under the Prime Minister's Office, is charged with enforcing the law, regulating data processing, protecting individuals' rights, and ensuring compliance. It can impose administrative fines, penalties, and other sanctions on those who violate the law.
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The emerging outsourcing sector is gaining recognition as a key economic growth strategy of the country. With federal authorities eyeing job creation, foreign exchange generation, and integration into the global market, the sector is poised to compete with African outsourcing leaders like South Africa and Kenya. However, challenges remain. A major concern raised was the development, or lack thereof, of a skilled workforce. While Ethiopia produces a large number of STEM graduates, many lack the essential soft skills required by the global industry, such as communications, teamwork, and problem-solving. Proficiency in the English language, a critical skill for engaging with international clients, remains a severe drawback. Much of the sector’s success depends on recently launched initiatives to train five million coders. Infrastructure constraints, such as unreliable power supply and inadequate internet connectivity, continue to pose barriers to growth. Outsourcing firms have emphasised adopting special economic zones as a critical strategy for the sector’s success. Such zones are hoped to offer more favourable business environment compared to the rest of the country, providing tax incentives, streamlined regulations, and world-class infrastructure.
The Ministry of Finance has lifted the 250,000-dollar cap on franco valuta imports, allowing for the import of all goods except fossil fuel-powered automobiles and security and defence equipment. This policy shift, part of a broader economic reform program, aims to streamline trade and reduce market distortions. State Minister Eyob Tekalign (PhD) explained that the new policy allows goods to be imported without foreign exchange payments, bypassing stringent banking procedures and potentially alleviating pressure on the official exchange rate. Local manufacturers and consumer goods importers are expected to benefit from reduced bureaucratic hurdles and increased access to essential imports. While economists see this as a positive move for manufacturers who previously struggled with delayed payments, concerns remain about the potential for counterfeit products and the need for complementary reforms to ensure exchange rate stability.
The state-owned power producer, Ethiopian Electric Power has generated 27 million dollars from electricity sales to data mining companies, in less than a year. CEO Ashebir Balcha revealed that the company achieved 97 percent of its sales target in just a few months, but had to restrict sales due to oversupply concerns. Over the past two years, Ethiopia has emerged as a new hub for data mining companies, attracted by its growing power supply. Ethiopian Electric Power has signed contracts with 18 companies to provide electricity for their mining activities, with four companies becoming operational by March. These data mining operations are major electricity consumers, each requiring between 10MW and 100MW of power. However, the growing demand from data miners has sparked concerns among experts about potential energy shortages for other sectors and the general population. Ashebir emphasised that Ethiopian Electric Power prioritises domestic investments, including those in the cement, real estate, industry, and economic zones.
That’s all for today. We’ll be back with more updates next week.
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