November 2, 2024
Ethiopia’s national digital identity could soon be used as the travel document by people boarding domestic flights, following a Memorandum of Understanding signed by Ethiopian Airlines and the NIDP.
The MoU commits the partners to working collaboratively on integrating the Fayda digital ID with airport systems.
Ethiopian Airlines is also working towards the introduction of biometric passenger processing for various steps along the travel journey, from booking to boarding. The move is intended to improve passenger experiences while increasing operational efficiency.
The government has been rapidly implementing Fayda across various sectors for similar reasons as part of a broader digital government strategy. Recent examples include an integration agreement with the country’s procurement authority.
Abiyot Bayou senior advisor to Ethiopia’s Minister of Innovation and Technology, explained the current digital government strategy as the third step in its transformation. The earlier stages involved applications developed independently by different institutions. Bayou refers to the newer, integrated system as “GO.”
“When the GO stake is in place, we will have the integration of payment system, ID card, the registration and other data exchange systems at the center,” he said.
“So, the presence of Fayda Digital ID,” Bayou says, will “solve many problems.”
For international travels, Ethiopia has been working with ICAO in preparation for a rollout of biometric passports.
(Biometric update)
Ethiopia Doubles Revenue Goal to $12.5 Billion With New Taxes
Ethiopia is more than doubling its revenue target amid an International Monetary Fund financing program that sets out several conditions to reform East Africa’s biggest economy.
The country seeks to collect 1.5 trillion birr (USD 12.5 billion) in the fiscal year to July 7, Prime Minister Abiy Ahmed told lawmakers on Thursday. That compares to 613 billion birr the finance ministry set in its 2024-25 budget presented in June.
To net more revenue, Ethiopia is introducing new taxes including value-added tax on banking services, property taxes and an excise tax on telecommunication services. In the first quarter of the fiscal year that started in July, authorities collected 65 percent more than a year earlier, but the 180 billion birr is woefully low given the latest target.
Africa’s second-most populous nation signed up for a USD 3.4 billion IMF bailout in July after defaulting on a eurobond that’s maturing in December. In exchange, it’s had to allow its currency to float freely. Other reforms it’s been implementing include opening up its financial sector to foreign investment and plans to privatize state-owned enterprises, including a giant telecommunications operator.
“Ethiopia is one of the countries with a low tax-collection rate, largely because many sectors operate informally. We want to change this,” Abiy said in the capital, Addis Ababa. “We are working on reforming tax laws, improving tax administration, automating processes and changing the attitudes of tax workers.”
Ethiopia plans to collect 900 billion birr from federal sources and 600 billion birr from regional governments. To achieve this, Abiy said he’s establishing a high-level committee to focus solely on overseeing revenue collection.
The traditional IMF economic orthodoxy of boosting revenue, cutting spending and privatizing state companies has backfired elsewhere in the region. Neighboring Kenya fell into trouble earlier this year as citizens took to the streets in protests over multiple fresh taxation measures introduced in the two years since President William Ruto came to power. It’s had to abandon some of the proposed taxes and collection is lagging behind.
Since agreeing to the reform package, the Ethiopian central bank’s foreign-exchange reserves have jumped 161 percent. Aid and grant inflows ballooned to USD 3.4 billion in the first quarter, compared with just USD 400 million a year earlier, Abiy said.
(BNN Bloomberg)
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