National Bank of Ethiopia National Digital Payment Strategy

Executive Summary

Ethiopia has enthusiastically embarked on a nationwide digital transformation that offers vast potential benefits for its people. This National Digital Payments Strategy (NDPS) for 2021–2024 is a central component of that journey. In this sense, this strategy is a roadmap through which the National Bank of Ethiopia (NBE) will transform the payment ecosystem and help build a cash-lite and more financially inclusive economy. The NDPS is a key component of the NBE’s plan for modernizing Ethiopia’s national retail payment system.
“Digital payments” are a vast, complex and multifaceted topic. As a result, advancing digital payments requires the combined efforts of stakeholders across many sectors and segments of the economy. For this reason, the NDPS has been developed in a highly collaborative manner, with wide and deep consultation with stakeholders across the payment ecosystem.
The vision for the NDPS is to build a secure, competitive, efficient, innovative,
and responsible payment ecosystem to support a cash-lite and financially
inclusive economy

THE NDPS IS BASED ON FOUR STRATEGIC PILLARS:
developing a reliable, inclusive and interoperable infrastructure;
championing adoption of digital payments;
building a robust and consistent regulatory and oversight framework; and
creating an enabling environment for innovation.
Specific strategic actions and a detailed implementation plan have been defined for each of these four pillars. The strategic actions address the priority challenges in the specific context and conditions prevailing in Ethiopia. They have been informed by Ethiopia’s current or “baseline” activities and conditions in the payment sector, as well as global good practices.
THE NDPS ALSO IDENTIFIES FOUR “ENABLERS” WHICH—TOGETHER WITH THE FOUR STRATEGIC
PILLARS—FORM THE FOUNDATION OF THE STRATEGY. THE ENABLERS ARE:
committing to an efficient, reliable, and safe national payment system;
prioritizing and investing in capacity-building across the digital payment ecosystem;
guaranteeing active and ongoing coordination with national development reforms and policies; and
building a robust governance and implementation plan, and monitoring success using key performance indicators (KPIs).

The NDPS has been designed to align with the Ethiopian government’s broader reform agenda. Its intention is to serve as a guide for stakeholders across the public and private sectors to transform Ethiopia’s payment landscape. It has been developed in accordance with Ethiopia’s Financial Sector Reform Strategy, which explicitly identified the need for a digital financial services strategy, of which this NDPS is a core component (World Bank Group 2020a).
The NDPS will be executed in conjunction with ongoing reforms2 in Ethiopia’s national plan to digitize the economy in order to drive financial inclusion, create dignified jobs, and promote women’s economic participation. Ethiopia’s overarching goal is to accelerate progress towards inclusive economic growth, greater prosperity, and improved social outcomes.


The COVID-19 pandemic has dramatically heightened the urgency of digitizing payments in Ethiopia. As seen in countries around the world, digital payments have proved instrumental in the fight against COVID-19. Digital payments increase the speed, efficiency, and accuracy of payments, and vastly reduce the need for in-person cash transactions requiring physical contact (Goodwin-Groen 2020). In line with global good practices, the Ethiopian government has started implementing elements of this strategy. Measures thus far have focused on areas where digitization can have the most impact, such as helping to meet urgent health, welfare, and economic needs created by the COVID-19 crisis.
In addition to the short-term benefits of digitization, the NDPS also draws on a vast body of global knowledge about how digitization can build stronger, safer, fairer communities and a more sustainable natural environment over time. In this way, the NDPS presents a powerful tool for accelerating Ethiopia’s progress towards the Sustainable Development Goals for people, prosperity, and planet.

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