The Role Of Ict In Trade And Economic Growth In Ethiopia   Admassie
Upcoming SlideShare
Loading in...5
×
 

Like this? Share it with your network

Share

The Role Of Ict In Trade And Economic Growth In Ethiopia Admassie

on

  • 7,365 views

 

Statistics

Views

Total Views
7,365
Views on SlideShare
7,356
Embed Views
9

Actions

Likes
0
Downloads
63
Comments
0

3 Embeds 9

http://www.slideshare.net 7
http://health.medicbd.com 1
http://2028403267.nvmodules.netvibes.com 1

Accessibility

Categories

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

The Role Of Ict In Trade And Economic Growth In Ethiopia Admassie Presentation Transcript

  • 1. The Role of Information and Communications Technology (ICT) in Trade and Economic Growth in Ethiopia Assefa Admassie and Woubalem Taye
  • 2. Presentation Outline
    • Introduction
    • Trade Landscape
    • Trade Related Policy Assessments
    • ICT Landscape and Policy Assessments
    • Legal and Regulatory Framework
    • Private Sector Readiness for E-Business.
    • Conclusions and Recommendations.
  • 3.
    • Introduction
    • Advances in ICTs have dramatically changed the World economy over the last few decades:
        • Advances in the Information Technology
        • (Computers usage for Storage, Processing & Retrieval)
        • Advances in the Communication Technologies
        • ( Telecom & Computer Networks, Broadcasting, & the Internet)
    • Access to information and knowledge via ICT:
      • Makes business more competitive and Productive
      • Empower people with knowledge
      • open new opportunities, perspective & challenges.
  • 4. 1. Introduction…cont’d
    • Knowledge has replaced traditional productivity inputs, as input for growth
    • With regard to trade:
      • Knowledge has changed international trade, and introduced new business intermediaries
    • Significant spillover effects on economic growth:
      • 1% ↑ stock of infrastructure->1% ↑ GDP (WB 1994)
      • Poverty also ↓ (the case of Grameen Bank village phone system)
  • 5. 1. Introduction…cont’d
    • IC Technologies facilitate the delivery of basic social services:
      • Health
      • Education
      • Agricultural extension services
      • Good governance
    • In general :
      • Those who can best receive, process, adopt and innovate information are winners!
      • Conducting old businesses in new ways and embracing new business opportunities has now become part of any economic transformation.
    • Growing use of ICT as a medium for business information/knowledge processing and exchange.
  • 6. 1.1. Motivation and Objective
    • Not much is known about the application of ICT in facilitating domestic and international trade.
    • Objectives of the study
      • Assessing the ICT and trade policy environment
      • Identify gaps in the legal and regulatory frameworks
      • Assessing the awareness and usage of ICT in trade by SMMEs
    • Methodology (several methods) :
      • Systematic analysis and review of policy documents
      • Review ICT and trade statistics from secondary data
      • Primary survey data
      • Interviews with knowledgeable informants
      • Case studies.
  • 7. -2- Review of the Recent Trade landscape in Ethiopia
  • 8. 2.1. General Overview of the Ethiopian Economy
    • Ethiopia :
      • Is Among the poorest countries on Earth (PCI of $160)
      • Is Land-locked
      • Is primarily rain-fed low productive Agrarian economy
      • >15% children cannot celebrate their 5 th birth day
      • 47% of children are malnourished
      • 871 per 100,000 MMR
      • 48 million people do not have access to clean water
      • Only 17% have access to electricity
      • Average Ethiopian lives only 43 (F) yrs or 42 (M) yrs
      • Etc…
  • 9. 2.1. General Overview of the Ethiopian Economy
  • 10. 2.1. General Overview of the Ethiopian Economy
  • 11. 2.1. General Overview of the Ethiopian Economy
  • 12. 2.1.1. An overview of the trade sector
    • Many reforms and promotions in the trade sector:
      • Deregulation of domestic prices
      • Liberalization of foreign trade
      • Privatization
      • Abolition of export taxes and subsidies
      • Devaluation
      • Harmonized customs and duties
      • Maximum customs duty has now been significantly reduced.
  • 13. 2.1.1. Overview of …cont’d
    • Contribution of export trade has been growing at about 7.4% - 1995/96 to 2005/06.
    • 2009 is the target accession date to WTO
    • Ethiopia is also a member of COMESA
      • 23 African countries (300 million pop.)
    • Member of NEPAD
    • Beneficiary of:
      • AGOA
      • Economic Partnership Arrangement (EPA)
  • 14. 2.1.2. The Structure of Export (in millions of USD) 482.37 377 317.52 Of which non coffee 817.74 600.45 482.78 Total 84.96 69.15 86.66 Others 52.50 48.71 42.08 Gold 99.96 88.02 58.02 Chat 12.82 1.91 0.481 Live animals 14.59 7.66 2.42 Meat and meat products 16.07 12.72 9.58 Fruits and vegetables 102.29 82.66 46.09 Oilseeds 35.47 22.58 19.97 Pulses 63.73 43.59 52.22 Leather and leather products 335.37 223.45 165.26 Coffee 2004/05 2003/04 2002/03 Year Export commodity
  • 15. 2.1.2. The Structure of Export (in millions of USD)
  • 16. 2.1.2. The Structure of Imports (%) 1.8 27.1 33.0 18.4 18.3 1.4 2004/05 1.5 35.1 31.6 12.2 18.1 1.3 2003/04 3.7 35.2 29.6 15.5 14.8 1.2 2002/03 2.5 34.6 28.3 15.8 17 1.8 2001/01 2.8 30.1 28.2 18.8 18.3 1.5 2000/01 14.5 26.8 29.2 15.5 12.7 1.2 1999/00 8.3 28.1 33.7 11.4 16.8 1.7 1998/99 7.7 19.7 29.8 24.4 16.4 2 1997/98 0.9 20.6 38.8 18.4 19.2 2 1996/97 4.1 27.1 35.9 12.9 17.5 2.5 1995/96 Misc. Consumer goods Capital goods Fuel Semi finished goods Raw material Year
  • 17. 2.1.3. Main Destinations of Exports 5521.3 4683.3 3849.2 3659.5 Total 65.8 21.3 17.7 10.3 Others 355.5 225.2 166.3 31.1 North America 1808.1 (2) 1326.4 (2) 1216.9 (2) 1761.2 (1) Asia 2588.5 (1) 1619.4 (1) 1791.4 (1) 830.2 (3) Europe 703.4 (3) 1491.0 (3) 656.9 (3) 1026.7 (2) Africa 2004 2003 2002 2001 Destination
  • 18. 2.1.3. Main Sources of Imports
  • 19. The Structure of Ethiopian Trade
    • Observations:
      • The bulk of export consists of primary agricultural commodities, where volatility in price and demand is common at the international market
      • While more than half of imported items are composed of:
        • capital goods,
        • semi-finished goods and
        • raw materials
      • Asia, Europe and the Middle East are the main Trading Partners for Ethiopia.
      • Significance of Inter-regional Trade is limited.
  • 20. -3- Review of the Policy Domain
  • 21. 3.1. Review of Recent Trade and Related Policies
    • Gov’t plays a vital role in the creation of enabling env’t in the use of ICT for trade
    • Policy can enable or enhance adoption of ICT or act as a barrier and suppress the e-Economy.
    • Contribution of e-Commerce and e-Biz to growth ultimately depends on policy env’t
    • Which policies? ->
  • 22. 3.1. Review of Recent Trade and Related Policies
    • Main Strategies and Policies reviewed :
      • ADLI
      • SDPRP
      • PASDEP
      • Rural and Agricultural Dev’t Policy
      • Trade
      • Industrial Policy
      • Customs Procedures & Regulations
      • Foreign Exchange Directives
      • Standardization & Quality Control
      • ICT Policy.
  • 23. 3.1.1. ADLI
    • Since 1993, ADLI is the a focal development strategy for the Ethiopian Government.
    • The strategy aims at increasing agricultural production and productivity by introducing Green Revolution type technologies-fertilizer and improved seeds
      • Commercialization of agricultural production beyond the subsistence level
      • Make agriculture internationally competitive
      • Export oriented agricultural production
    • There is no consensus on its appropriateness.
  • 24. 3.1.1 ADLI…cont’d
    • ICT have become important in enhancing productivity and reducing marketing costs.
    • ICT have important role in accessing info on:
      • Weather conditions
      • Market prices
      • Appropriate technology selection and application
      • Agricultural marketing information, etc.
    • However, with regard to the use of ICTs in facilitating trade ADLI has not made any concrete suggestions.
  • 25. 3.1.2. SDPRP
    • Poverty reduction is among the highest priorities of the Government as expressed in the SDPRP.
    • It has expressed its commitment towards the achievement of the MDGs - halve poverty by 2015.
    • SDPRP is based on four building blocks:
      • Capacity building – one of the blocks.
    • ICT is taken as a cross-cutting edge in all of the four building blocks
    • As part of the capacity building program Ministry of Capacity Building (MoCB) was established in 1998.
    • National ICTs Policy implementation and evaluation capacity is one of the 14 capacity building programs.
  • 26. 3.1.2. SDPRP…cont’d
    • A draft ICTs policy has been prepared.
    • A full-fledged ICT Authority has been established.
    • Main elements of the ICT policy capacity building:
      • National ICTs human resource dev’t
      • Capacity building in ICTs educ. and training infrastructure of higher educ. system
      • Capacity building in colleges and universities
      • Establish national ICT technical institute
      • Development of ICT curriculum for medium and higher level educ. institutes.
  • 27. 3.1.2. SDPRP…cont’d
    • During the SDPRP-there have been major efforts:
      • Expansion of telephone coverage
      • Introduction of broadband technologies
      • Etc.
    • However, there is limited commitment towards reducing
      • cost of ICT access and
      • Utilization of ICT facilities by the private sector
      • Lack of incentives -tax and tariff incentives.
  • 28. 3.1.3. PASDEP
    • The most consolidated and recent policy framework for the yrs 2005-2010
    • It carries forward important strategic directions pursued under the SDPRP with particular emphasis on
      • greater commercialization of agriculture
      • Private sector development and
      • Scale-up efforts towards the MDGs.
    • PASDEP acknowledges that Information Technology is central to growth and poverty reduction .
      • To leap frog forward the ICT sector
  • 29. 3.1.3. PASDEP
    • Major undertakings planned with regard to the ICT sector development:
      • Promoting human resource development in the ICT field,
      • Mainstreaming the use of ICT in all sectors of the economy, administration of government, and in the education system,
      • Developing the necessary telecommunications infrastructure,
      • Promoting research and development through ICT, and
      • Creating enabling legal and regulatory frameworks.
  • 30. 3.1.3. PASDEP… cont’d
    • Another notable developments: the idea of strengthening the infrastructure backbone:
      • Road
      • Water supply
      • Power supply
      • Telecommunications
    • With regard to telecommunications:
      • ↑ fixed tel. subs
      • ↑ cellular subs
      • ↑ internet subs
    • These are all encouraging developments which may facilitate the use of ICTs in trade.
  • 31. 3.1.3. PASDEP Plan on Telecom infrastructure
  • 32. 3.2. Sector Specific Policies 3.2.1. Rural and Agric. Dev’t Policy
    • The agricultural sector is constrained by a number of bottlenecks:
      • Underdeveloped infrastructure
      • Backward agricultural technologies
      • Disease and pests
      • Population explosion
      • Environmental degradation
      • Low institutional capacity, etc.
    • As a derivative of ADLI, the Agricultural Policy underlines the importance of transforming the sector from subsistence to a market-based commercial agriculture.
      • Export markets are the target
  • 33. 3.2.1. Rural Dev’t and…cont’d
    • The widespread adoption of ICT infrastructure holds considerable promise for the country.
    • ICT Application Examples:
      • Video conferencing between coffee farmer (Uganda) and the coffee dealer/expert (US),
      • application of ICT in agricultural surveys and research database in Nigeria and Indonesia.
    • Deploying market networks and information system is acknowledged.
    • However, Ethiopian farmers are small-scale subsistence producers, who can't access modern marketing information systems.
      • State driven information and market network system is needed .
  • 34. 3.2.1. Rural Dev’t and…cont’d
    • The policy recognizes the need for expanding telecom services up to kebele level.
        • Positive development
    • The policy, however, makes no systematic reference as to how the development and application of ICT in the sector could be achieved:
        • Market and information network,
        • Development of localized content developments,
        • Dissemination of standard and quality information, inspection,
        • Price and weather information,
        • Etc.
  • 35. 3.2.2. Trade Policy
    • The trade regime is part of the overall incentive structure for dev’t.
    • Both domestic and international trades are vital for economic growth.
    • For a variety of reasons, Ethiopia has not fully realized the benefits from its trade in the past.
    • Some encouraging efforts in the trade sector:
      • Streamlining customs procedures
      • Removal of export duties and taxes
      • Liberalization of forex + retention scheme+ export credit guarantee scheme
      • Establishment of a Trade Point
      • Dismantle quant’v restrictions and reduce the level and dispersion of tariff rates.
  • 36. 3.2.2. Trade Policy…cont’d
    • Poor export performance is largely attributed to non-price factors:
      • Information on market prices
      • Speed of delivery
      • After sales service
      • Etc.
    • ICT is vital to realize faster economic Growth.
    • Trade can be promoted through harnessing ICT to improve:
      • The banking infrastructure
      • Sound and efficient payment system
      • Deepen capital market
    • In recent years, several countries are using ICT to achieve dev’t goals:
      • Example : Tunisia’s application of ICT in trade
  • 37. 3.2.2. Trade Policy…cont’d
    • Ethiopian Trade Point was established with objectives of:
      • Receiving, collecting, compiling and disseminating trade information,
      • Sending, receiving and distributing electronic trading opportunities,
      • Promoting domestic products at int’l market, Etc.
    • However, very little has been achieved.
      • Still an up-to-date and interactive web-based database and information dissemination system does not exist.
  • 38. 3.2.2. Trade Policy…cont’d
    • Reasons:
      • serious capacity, skill, and budget constraints
      • Backward method of info dissemination methods
      • Non-public and limited number of itemized up-to-date price and opportunities information
      • Recurrent restructuring
      • Lack of reliable investors database
      • etc
  • 39. 3.2.3. Industrial Dev’t Strategy
    • Relatively conducive industrial environment in the 1950s and 1960s:
      • Tax exemptions
      • Remittance of forex
      • Import and export duty relief
      • Tax exemption on dividends
      • Modest protection of domestic industries, etc.
    • Poor performance during the Derg regime (0.57% average growth 1980-91)
      • Restricted private participation
    • Relatively neglected during the current regime
      • Priority to agriculture ADLI diluted the role of Industry.
  • 40. 3.2.3. Industrial Dev't Strategy… cont’d
    • It was only after 2001, the country has a produced an Industrial Development Strategy
    • The Industrial Development Strategy gives priority to:
      • Textile and clothing
      • Leather and leather products
      • Agro-processing
      • Construction
      • SMMEs
    • Good governance through:
      • Improved licensing
      • Tax collection
      • Income and Property registration
    • Banking industry
      • Reduce information asymmetry inter-bank networking
  • 41. 3.2.3. Industrial Dev’t Strategy… cont’d
    • The strategy acknowledges the importance of infrastructure:
      • Creating employment,
      • Investment opportunities,
      • Facilitate industrial growth
    • ICT could contribute to the dev’t of local business, inter-continental and regional trade, and local entrepreneurship.
    • IDS articulates the importance of rigorous effort on the dev’t of ICT
    • It underscores the role of ICT for:
      • Proper income , expenditure and property registration for the tax system,etc.
  • 42. 3.2.3. Industrial Dev’t Strategy… cont’d
    • Some Practical Issues :
      • Unavailability of SMS service – which is the cheapest means of communications
      • Monopoly control of core part of telecom business
    • Minor and tiny telecom activities are left for private sector participation:
      • End-user telecom equipment vending
      • Tele-shops and kiosks
      • Cyber cafes, etc.
    • Universal Service Access (USA) is an excuse for the declaration of monopoly.
    • Lesson from other LDCs reveals that USA can still be achieved under greater participation of private sector in the telecom business.
  • 43. 3.2.4. Investment Promotion Strategy
    • Several investment proclamations and amendments since the early 1990s
    • Focal points for promoting, coordinating, and facilitating investment:
        • The MoTI,
        • The Ethiopian Investment Authority and
        • Regional inv’t Bureaus
    • Compared to other African countries Ethiopia is poor in attracting FDI
        • Many licensed projects have not been implemented
    • One reason could be the underdeveloped ICT infrastructure
  • 44.
    • Requirements for an investment permit:
      • Signed application
      • In person or photocopy of his power of attorney
      • Photocopy of memorandum and Article of Association
      • Photocopy of identity cards
    • All are paper-based
    • No provision of ICT in processing investment licensing using
      • Electronic forms
      • Interactive websites
      • Advanced e-processing.
    • No reliable web site: www.investinethiopia.org . could not be verified if it works.
    3.2.4. Investment Promotion Strategy
  • 45. 3.2.5. Foreign Exchange Policy
    • Foreign exchange regime reflects:
      • The economic settings
      • Management system
      • Policies
      • Structure and level of development
      • Performance of the external trade and balance of payments position
      • Degree of independence of central bank
    • A number of financial liberalization measures have been undertaken since 1991.
    • Currently, payments for imports and export, can be made by:
      • Letter of Credit (LC)
      • Cash Against Documents (CAD)
      • Advance Payment (AP)
    • All are paper based documents !
  • 46. 3.2.5. Foreign Exchange…cont’d
    • No Ethiopian national resident in Ethiopia or Ethiopian Co. is allowed to maintain a bank account abroad without the authorization of NBE.
    • No person may export or enter into any commitment to export without prior approval of the Bank and unless the exporter undertakes to surrender the resultant sales proceeds in forex to an authorized bank
    • Only One-Way payments through Credit Cards
    • In general, Forex directives have no room for:
      • Electronic payment system for cross-border transactions
      • Electronic processing of imports and exports
      • Electronic application forms and
      • Electronic signatures.
  • 47. 3.2.6. Customs Procedures and Regulations
    • The dev’t of ICT and the role of Customs and Clearance institutions is vital in trade practices and conclusion of transaction.
    • Ethiopian Customs Authority (ECuA):
      • Collect duties and taxes on import and export
      • Implement international laws and conventions
      • Control import and export of restricted goods
    • Various incentive structures:
      • Exemption from export taxes
      • Duty drawback scheme
      • Voucher pass scheme
      • Bonded manufacturing warehouse scheme
    • Beneficiaries should present several paper-based documents.
  • 48. 3.2.6. Customs …cont’d
    • Currently, with the Civil Service Reform, ECuA is among the Champions.
    • Enormous success!
      • Customs automation (Automated System for Customs Data – ASYCUDA++) – about 20 offices networked so far
      • Mandatory minimum level of required document
      • 43 days to 8 hours clearance time
      • Simplified declaration process using Direct Trade Input (DTI)- however, only 12 agents are remotely connected.
    • More effort is still needed:
      • Automation process
      • Capacity building and staffing
      • Training and skill dev’t, Etc.
  • 49. 3.2.7. Standardization and Quality Control
    • The Quality and Standards Authority of Ethiopia (QSAE) aims:
      • To promote quality management
      • Promotion and application of Ethiopian standards, Etc.
    • Core areas of activities:
      • Regulation enforcement and Calibration
      • Laboratory testing and Standards information, Batch product inspection
      • Standards information and public education
    • However, no emphasis is given to the quality/standards of almost all ICT equipments and the health and environmental implication as well as their disposal.
  • 50.
    • 4. ICT Landscape, Policy and Regulatory Frameworks
  • 51. -5- Private Sector Readiness in Using ICTs in Trade (SMMEs)
  • 52. 5.1. Introduction
    • SMMEs:
      • Foster competition
      • Ensure efficient utilization of resources
      • Instant to respond to new opportunities
      • Create employment opportunities
      • Reduce poverty
      • Breeding ground for entrepreneurs in LDCs
      • Market driven
      • Expand the tax base.
      • Etc.
  • 53. 5.1. Introduction
    • ICTs can benefit SMMEs in many ways:
      • Increase productivity
      • Increase efficiency of internal biz operation – inventory management, accounting and budget
      • Cheap communications
      • Expand client base – e-Marketing
      • Facilitate capacity building – e-Learning/Training
      • Facilitate government services – business registration and filing of taxes.
  • 54. 5.1. Introduction
    • There are several ways by which the ICTs can be useful for SMMEs in Ethiopia:
      • Facilitate the marketing of agricultural products in the global market
      • Facilitate the promotion and development of tourism
      • Facilitate access of artisans & artists in SMMEs to the world markets
      • Provide opportunities for firms to enter into B2B and B2G supply chains business process reengineering e.g. BPO- to create jobs and generate revenue.
      • Etc.
  • 55. 5.2. Application of ICTs by SMMEs 5.2.1. Background to the SMMEs Study
    • With the aim of understanding the level and usage of ICTs by SMMEs in Ethiopia a small survey was organized.
    • Coverage of the survey: Addis Ababa
    • Sampling frame: list of registered and currently operational SMMEs
    • A two-stage stratified sampling - according to their area of operation and level of paid-up capital
    • Four areas of operation:
      • Customs and clearance
      • Export
      • Export and import
      • Foreign trade auxiliary (import only is excluded)
  • 56. 5.2.1. Background … cont’d   1.46%   Percentage of sample in the Population   41   Sample size 40 2,733 3,072   Total 3 229 286 100,001 - 500,000 Foreign trade Auxiliary Cat2 2 161 187 20,001 - 100,000 Foreign trade Auxiliary Cat 1 3 180 207 less than 20,000 Foreign trade Auxiliary Cat 0 7 450 480 100,001 - 500,000 Import Export Cat 2 6 388 415 20,001 - 100,000 Import Export Cat 1 6 444 475 less than 20,000 Import Export Cat 0 3 205 268 100,001 - 500,000 Export Cat 2 2 117 130 20,001 - 100,000 Export Cat 1 4 295 342 less than 20,000 Export Cat 0 1 60 62 100,001 - 500,000 Customs and Clearance Cat 2 1 46 47 20,001 - 100,000 Customs and Clearance Cat 1 2 158 173 less than 20,000 Customs and Clearance Cat 0 Sample With telephone Total Level of registered Paid-up capital Export category by type
  • 57. 5.2.1. Background … cont’d
    • 40 SMMEs representing 1.46% of the Licensed SMMEs population.
    • Problems:
      • Missing contact address
      • Mismatch between registered and actual address
      • Non-response
  • 58. 5.2.2. Year of establishment and Location 100.0 39* Total 10.3 4 Yeka 5.1 2 Nefas-silk 2.6 1 Lideta 2.6 1 Kolfe 28.2 11 Kirkos 100.0 40 Total 5.1 2 Gulele 45.00 18 2005 – 2006 35.9 14 Bole 27.5 11 2001 – 2004 7.7 3 Arada 17.5 7 1992- 2000 2.6 1 Addis Ketema 10.0 4 Before 1991 Per. Num. Sub District Per. Num. Location of sampled firms Year of establishment of sampled firms
  • 59. 5.2.3. Enterprise and Owners profile
    • Majority of the firm managers are male(93%)
    • 80% have either college diploma or degree
    • 48% are sole proprietorship, 43% partnership
    • The majority (65%) are engaged in retail and whole sale trade
    • More than 50% employ less than five workers
  • 60. 5.2.4. ICT Penetration and Utilization
    • What type of ICTs do they use?
      • Fixed line, mobile, fax, PBX, PCs, LANs, Website, internet.
    100 40 Total 7.5 3 W/O Fixed Line 92.5 37 TOTAL With Fixed lines 2.5 1 16 10.0 4 7 – 10 7.5 3 4 – 6 72.5 29 1 - 3 Percentage Frequency Number of Tel. Lines
  • 61. 5.2.4. ICT Penetration …cont’d 100 40 Total 2.5 1 Do not use mobile 97.5 39 TOT. W. Mob. lines 2.5 1 41 2.5 1 20 5.0 2 6 17.5 7 4 17.5 7 3 17.5 7 2 35.9 14 1 Percentage Frequency Number of Mobile Tel. Lines
  • 62. 5.2.4. ICT Penetration …cont’d
    • E-mail services are the most important use of internet.
    • Annual Expenditure for the Internet Connection
    100 35   Total 14 5 Above 80,000 9 3 60,001 – 80,000 20 7 40,001 – 60,000 17 6 20,001 to 40,000 40 14 0 - 20,000 Percent No. of companies Birr
  • 63. 5.2.5. Destination and Sources of Trade Transaction 5.0 2 8 5.0 2 Others 15.0 6 17 20.0 8 Africa 35(1) 42.5 17 20(3) 22.5 9 Far East including China 25(3) 37.5 15 24 (1) 30.0 12 Middle East 30(2) 32.5 13 23(2) 37.5 15 Europe 5.0 2 10 17.5 7 North America Rank Per. Num. Rank* Per. Num. Supplier Destination Continent
  • 64. 5.2.6. Sales via the Internet The most important reasons for internet sales? 17.5 7 avoid corruption 25.0 10 increase sales 15.0 6 become competitors with other firms 22.5 9 reach to new customers (geographical expansion of markets) 27.5 11 improve customers satisfaction 16(2) 27.5 11 speed up sales 18(1) 32.5 13 reduce transaction costs 10(3) 27.5 11 reduce marketing cost 17.5 7 improve company image Rank Percent of SMMEs Number of SMMEs Reasons
  • 65. 5.2.6. Sales via the Internet
    • About 45% stated that they have received orders via the internet.
    • However, online payment has not been possible.
  • 66. 5.2.7. Purchase via the Internet
    • About 45% of the firms have made orders via the internet to purchase goods and services.
    • What Motivates?
    2.5 1 Others 20.0 8 avoid corruption 30.0 12 prevent theft and crime 25.0 10 Because of competition from competitors 15(3) 35.0 14 outreach to new suppliers 49(1) 40.0 16 speed up product/service procurement process 25(2) 40.0 16 reduce production/service procurement cost Rank Percent Number Main Motivations
  • 67. 5.2.8. Advantages of Using ICT in trade 5.0 2 Others 42.5 17 Avoid corruption 75.0 30 Improve customers satisfaction 39(2) 65.0 26 Helps to deliver goods and services faster 65.0 26 Better security of transaction 22(3) 65.0 26 Expedite sales and purchases 60(1) 92.5 37 Reduces transaction cost Rank Percent of firms Number of firms Advantage
  • 68. 5.2.9. ICT Skills in SMMEs
    • The level of education of the managers and basic ICT skill are used as indicators of their utilization of ICTs.
    40 0 0 100 3 6 2.5 99.49 37   5 0 0 0 0 0 1 13 5 Below 12th grade 4 0 0 0 0 0 0 11 4 Post Graduate Studies 12 0 0 0 0 0 0 32 12 College Degree 17 0 0 100 3 0 0 38 14 College Diploma 2 0 0 0 0 0 0 5 2 High School Diploma/TVET % No. % No. % No. % No. W/O ICT skills With ICT Skills W/O ICT Skills With ICT Skills   Total Female   Male   Level of Education of Managers  
  • 69. 5.2.9. ICT Skills … cont’d Employees skill and access to PCs and the Internet 54 35% 19 65% 35 SMMEs' employees who have access to the Internet 63 40% 25 60% 38 SMMEs 'employees who have access to PCs 64 39% 25 61% 39 SMMEs' employees who are computer literate 18 6% 1 94% 17 SMMEs who employed ICT Professionals Total Per. F Per. M   Skills & Access
  • 70. 5.2.10 Contribution of Internet to Total Sales Revenue 32.5 13 Non response 15 6 75 – 100 7.5 3 50 – 75 10.0 4 25 – 50 5.0 2 0 – 10 30.0 12 0 Percent of rims Number of firms Contribution in Percent
  • 71. 5.2.11. Availability of Gov’t Regulations, Legal and Regulatory Framework
    • More than one-third indicated that some relevant gov’t information and some electronic forms are available on the internet.
    25.0 10 Don’t know 42.5 17 No 32.5 13 Yes Availability of Electronic forms 20.0 8 Don’t know 42.5 17 No 37.5 15 Yes Availability of Government Information Per. of sampled firms Num. Resp.
  • 72. 5.2.11. Gov’t Regulations …cont’d
    • Many firms feel that there is no legal and regulatory provision that authorizes the establishment of online cross border business.
    2.5 1 Others 27.5 11 Problems related to tax system 25.0 10 Problems related to customs procedures 20.0 8 Problem of security 25.0 10 Problems related to after sales services 37.5 15 Absence of e-payment procedure 15 (3) 40.0 16 Lack of legal framework for the recognition of electronic transaction of goods and services 12 (4) 40.0 16 Lack of legal framework for recognizing electronic signature 17 (2) 37.5 15 Lack of legal provision for the conclusion and validity of electronic contracts 27 (1) 37.5 15 Lack of clear legal framework to establish cross border online service Rank Percent of Firms Num.of firms Problem
  • 73. 5.2.12. Obstacles and Constraints on the Use of ICTs by SMMEs
    • Main barriers to e-Commerce in Ethiopia
    5.0 2 Others 27.5 11 Lack of ICT skills 30.0 12 Logistic problems with the delivery network 35(2) 52.5 21 Absence of legal framework for electronic commerce 40(1) 57.5 23 Absence of an online payment system 33(3) 40.0 16 Customers not ready to use Internet purchases 35.0 14 Products/ services not suitable for sales via the internet Rank Per. of firms Num. Barrier
  • 74. -6- Conclusions and Recommendations
  • 75. 6.1. Conclusions
    • Although the potentials that ICTs can offer for human and economic development are well known, Ethiopia has not been able to fully benefit from developing the ICTs industry as a sector and using ICTs as an enabler.
    • Not much is known about the use of ICTs in facilitating domestic and international trade
    • The main goal of this project has been to assess the use of ICTs in facilitating trade and thereby identify the gaps in policy and regulatory frameworks to promote e-trade.
  • 76. 6.1. Conclusions
    • On the positive side:
      • ICT is considered as a cross-cutting edge in the SDPRSP and PASDEP documents.
      • The industrial development strategy recognizes that an efficient and reliable telecommunication infrastructure is crucial to expand the ICT sector and improve the usage of the technology for industrial development in the country.
      • Practical efforts are observed on the expansion of ICTs infrastructure
      • Although, still more efforts are needed, ECuA’s reform and modernization are encouraging.
      • The draft ICT policy has clear guiding principles for the implementation process including long, medium & short term plans.
  • 77. 6.1. Conclusions
    • On the negative side:
    • Most sectoral policy documents reviewed did not clearly articulate the role gov’t can play to facilitate the use of ICTs.
      • The agricultural policy has yet to provide specific directions on the use of ICTs in the system of production and in the distribution of agricultural products.
      • The trade policy does not explicitly recognize and appreciate the role of ICTs in facilitating trade.
      • Very little attention has been given to the role of the private sector’s participation in ICTs development
      • The current Foreign exchange directives have serious bottleneck for the development of e-commerce
      • The absence of an appropriate legal and regulatory framework is one of the main constraints for the expansion of online trade.
  • 78. 6.1. Conclusions …cont’d
    • The result of the SMMEs survey :
      • some firms have started to be engaged in online trading
      • great interest to use ICTs in trade practices
    • Major Problems :
      • absence of legal and regulatory framework
      • poor ICT related infrastructure
      • high cost of the technology
  • 79. 6.2. Tentative Recommendations
    • Mainstreaming of ICTs in all sectors of the economy.
    • Ensure ICT friendly legal and regulatory environment:
      • The use of electronic document
      • electronic signature
      • legal recognition
      • enforceability
    • Develop ICT oriented education and training systems, science and technology policies and strategies
    • Liberalization of the telecom infrastructure
    • Providing incentives for ICT development :
      • tax,
      • private sector capacity building programs,
      • trade facilitation centers
  • 80. 6.2. Tentative … cont’d
    • appropriate institutional arrangement that will facilitate an effective co-ordination, monitoring and evaluating ICTs application.
    • Formulate comprehensive communication & broadcasting policies.
    • Encouraging capacity building programs on ICT skills development in the public & private sector.
    • develop specific ICT private sector development programs like Technology parks, business ICT incubators for Business Process Outsourcing (BPO).
  • 81. 6.2. Tentative … cont’d
    • Encouraging SMMEs to use ICTs by :
      • Improving the business processes
      • Linking them to the global economy
      • Simplifying registration and other legal processes
      • Providing business & ICT skills education at all levels
      • Improving the costs to access ICT infrastructure, the internet, Personal computers.
  • 82.
    • Thank you