The start of 2020 was a time of hope for Ethiopian startups. Venture capitalists were increasingly watching Ethiopian startups, and the country improved its ranking in the World Bank’s 2019 Ease of Doing Business report. Just before the war began, over a year ago, Ethiopia was seeing an increasing number of companies launching various digital services that dared to change the traditional ways of doing business.
But now, as Ethiopia is embroiled in a bloody year-long civil war, shifting winds have brought a completely different scene in Ethiopian public discourse. People make statements about their position in the war with simple hashtags, while no public opinion goes unnoticed. Even Ethiopian business tycoons, entrepreneurs and innovators who in modern history have mostly remained silent on politics, are now part of public discourse.
The tech community also finds itself taking sides in a war that has deeply polarized Ethiopians at home and abroad. To highlight a few examples, one tech founder has become a leading pro-government voice on social media, another has found a way to deliver humanitarian aid while offering innovative solutions, while another has become finds a state pariah for a leaked video which would have “revealed a plot to overthrow the current regime of Abiy”.
Lasting just over a year, Ethiopia’s ongoing civil war with rebels in the northern region has killed tens of thousands, displaced four million and left hundreds of thousands of people in conflict. under conditions close to starvation. Amhara Regional State, one of the areas barely affected by war, said it would take 40 years to rebuild the region to its pre-war status.
Prime Minister Abiy Ahmed, Nobel Peace Prize winner, is at the front. His calls for battle have been accepted by notable figures such as Olympic gold medals. Ethiopian innovators are also playing a role and getting involved as they can.
Mass mobilizations and campaigns in support of the federal government have come to a head in recent weeks, after rebels in the northern region made headway in seizing new towns and pushing towards the capital, before to retreat.
The war forced people to choose sides
Salomon Kassa, TV personality, technical consultant and important figure in the Ethiopian innovation ecosystem, is one such actor actively campaigning around the war.
Solomon, who recently founded 1888EC, an innovative start-up studio aspiring to create disruptive innovators and change-makers in Ethiopia, has been a strong advocate for “pro-Ethiopian voices” on social media where both warring parties attempt to control the narrative.
Solomon today uses his social media account with thousands of followers to raise awareness of pro-government campaigns and provides his analysis on the latest hot issue regarding the conflict.
Innovative humanitarian solutions
Chapa Financial Technologies is another tech company that lends a helping hand in wartime, contributing to humanitarian causes. The fintech company has developed the eye, a fundraising platform that enables Ethiopians around the world to contribute to national causes.
In its first campaign to support victims of the conflict in Ethiopia, eyezon has managed to raise 153 million birr ($ 3.1 million) since its launch a month ago.
Thanks to a partnership with a local bank, which has agreed to cover the full cost of the international money transfer, 100% of donations go to the causes that supporters choose to give.
“Eyezon is Chapa’s contribution to Ethiopia, and supporting the victims of the conflict is one of the top priorities highlighted by the government,” said Nael Hailemariam, Managing Director of Chapa, who developed the platform for free.
“We will be adding more fundraising causes to the platform soon,” Nael told Quartz.
Established last year, Chapa is set to receive clearances from the National Bank of Ethiopia (NBE) to launch its online payment systems and become one of the first companies to provide financial services outside of banks. in Ethiopia.
Others found themselves on the wrong side of the law
But everyone’s involvement in politics was not well received. This is the case of Eleni Gabre-Madhin, who is responsible for innovation at the UNDP Regional Office for Africa.
A very prominent figure in Ethiopia, Eleni was the founder and first CEO of Ethiopian Commodity Exchange. She is also the founder of blueMoon, one of the first incubation facilities in Ethiopia.
Eleni made headlines after her home in the capital was look for in what she described as ethnic profiling and harassment. But things took a turn a few days later when video of Eleni attending a virtual meeting with Western diplomats and a TPLF representative. has been disclosed.
At the meeting where the issue of Abiy’s resignation was discussed, Eleni raised the issues of “transitional arrangement” and “martial plan” in post-war Ethiopia to the TPLF diplomat.
Many government supporters saw this as a plot to overthrow Abiy’s current regime. Eleni is now considered an outcast by the same people who once saw her as a heroine. Although Eleni said her attendance at the meeting was largely distorted and that she did not support any transitional government, the damage was already done.
“There is no IF and BUT! Eleni has crossed a red line and there is no going back, ” wrote Salomon on his Twitter page.
Since the video was leaked, Eleni has seen her honorary doctorate from an Ethiopian university revoked. She was sacked from her post as independent economic adviser to the Prime Minister while her close associates and former business partners distanced themselves from her, denouncing her actions. Its startup incubator, blueMoon, has since been closed and is the subject of a government investigation.
Ethiopia’s tech sector – past, present and future
A few years back, Ethiopia’s economic outlook told a whole different story. When Abiy came to power in 2018, he accelerated numerous reforms aimed at addressing many of the constraints stagnating Ethiopia’s digital economy.
Policy changes aimed at tackling poor network connectivity, high telecommunications costs, restrictive regulations and limited funding, coupled with the greater digital literacy brought by the passage of time, have unlocked much uncharted territory for Ethiopia and its innovators.
Abiy, who himself had a background in computer science and was at the time Minister of State for Science and Technology, paid particular attention to technology and innovation, which further boosted the sector.
Ethiopia’s digital economy is said to be taking off. Ecosystem actors described the political environment as the “best it has ever been”, while talks about the company who would be Ethiopia’s first unicorn were already underway among startups and entrepreneurs.
But now the war has diverted the country’s attention and resources, and innovation seems to be on the back burner. There is a growing call for people to join the cause and help however they can.
But not everything has self-destructed since the start of the war. Safaricom Ethiopia, which won the tender to enter Ethiopia’s $ 850 million telecommunications market, is preparing for a commercial launch despite some delays caused by the conflict.
Since launching in May 2021, Telebirr, the country’s first mobile money by a non-financial institution, has garnered around 11 million subscribers while transacting over two billion birr ($ 41.6 million).
Ethiopia’s first startup law that aims to provide personalized support to startups and encourage entrepreneurship is expected to be enacted after more than a year of preparation. And according to Shega, an Addis Ababa-based digital media and research company, Ethiopian fintech companies alone raised more than $ 8.8 million in 2021 amid the conflict.
Despite the uncertainties caused by the war and its massive impact on the economy, innovators remain cautiously optimistic that a post-war Ethiopia may still retain some of the gains made in the tech sector. Perhaps their allegiance to the government or to the TPLF can be seen as a belief in what Ethiopia can be.
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