While modern fuel stations with glass partitions are appearing in Addis Abeba, a contrasting reality that suspends fuel supply to new stations unfolds, citing national policy to reduce fuel imports and promote electric vehicle adoption. According to Ethiopian Petroleum Supply Enterprise (EPSE), this comes as the country intends to decrease fuel import expenditure by four percent this year, and transition to electric vehicles. The policy, which includes a ban on petroleum vehicle imports and reduced EV taxes, has nearly doubled EV imports, reaching 72 million dollars in 2022/23.
Month: January 2025
ORPHANED PAWS
A group of street dogs rests in the Kazanchis area, a distinct reminder of the displacement caused by urban redevelopment. As homes and buildings around the neighbourhood were demolished, many pets were left behind, adding to the estimated 250,000 stray dogs in Addis Abeba. Volunteers try to step in, feeding these dogs daily with funds raised primarily through TikTok and Telegram campaigns under the monekir Animals Need Attention. On average, these efforts provide meals with about 80 Br for each dog, showcasing the power of social media and community-driven initiatives. However, its sustainability is not guaranteed.
EMERALD BITES
It is chickpea pod season in Addis Abeba, a time when residents enjoy “Eshet,” a favorite green nibble with roots in local households. Available from November to January, market-oriented production of these nutritious pods (rich in protein, antioxidants, and fiber) is a recent development. As a major chickpea producer (contributing about 17pc globally), Ethiopia benefits from this dual-purpose crop, used both for food and for improving soil fertility through nitrogen fixation, reducing the need for synthetic fertilisers. This popularity has created a valuable niche market, providing farmers with immediate cash flow during harvest and establishing the crop as a popular seasonal street snack in urban areas.
Wegagen Bank Casts First Stone in Securities Exchange Pond
Wegagen Bank, lined up to become the first company to list on the newly launched Ethiopian Securities Exchange (ESX), has cleared a key milestone in its quest to go public. On January 10, the Bank registered with the Ethiopian Capital Market Authority (ECMA), positioning it to list 6.2 million shares with a paid-up capital of 6.2 billion Br. That same day, the ESX, headquartered in the Nile Building on Abebe Aregay (Ras) St., officially opened in Addis Abeba’s Science Museum. The bourse is expected to modernise the financial sector by accommodating conventional securities trading as well as over-the-counter deals. Firms with valuations above half a billion Birr will be eligible for public trading, while a growth segment will cater to companies valued at 50 million Br or higher.
The Ethiopian Securities Exchange hopes to list as many as 90 companies and attract four million investors in the coming years. It has raised 1.51 billion Br in subscribed capital, with 800 million Br in paid-up capital. Ethio telecom is also preparing to move forward with a secondary share market debut following its initial public offering, signalling the broader ambition to reshape the country’s financial ecosystem.
Wegagen Bank has been preparing for its listing since July 2024, with internal evaluations and compliance measures to meet the public offering directive. The steps included board resolutions, shareholder disclosures, and dematerialising shares through the Central Securities Depository at the National Bank of Ethiopia (NBE). “We’re listing our existing shares and plan to issue new ones soon,” said Getye Mequria, Wegagen Bank’s chief marketing strategy officer. While the Bank has secured a preliminary nod from the Exchange, it is still awaiting final clearance. Its 14,549 shareholders are currently undergoing data verification to wrap up the dematerialisation process. “We need to confirm that everything has been completed,” said Yodit Kassa, chief business and financial development officer at the Exchange, referring to the remaining documentation.
Banks Struggle to Lend as Branches Bloom, Coffers Wither
A severe cash shortage squeezes the economy, and the deposit-to-loan ratio has slumped below 80pc, hitting its lowest point in decades. The scarcity of credit, often termed a credit crunch, has a strangling effect on the economy. Few businesses secure the funds they need, and enterprises struggle to meet working capital requirements. One need only talk to borrowers to sense the desperation of an ever-increasing number of banks, which may greet them with new branches, yet few can provide the liquidity required to finance businesses.
A new monetary policy by the National Bank of Ethiopia (NBE), under Governor Mamo Mihiretu, is part of the cause.
In his zeal to quell inflation, stubbornly around 19.9pc year on year (YoY) last year, the Governor has imposed a cap on credit growth for over a year, restricting how fast banks can expand their lending portfolios. Initially fixed at 14pc, this ceiling was only slightly loosened recently, allowing credit to grow by four more percentage points. But it hardly offers solace to those who had hoped the authorities would release the pressure on the economy more substantially.
Governor Mamo’s reluctance appears to have come from the desire not to flood the economy with cash, thus ceding a vital tool in the fight against inflation. At heart, he may have preferred a blunt ceiling on credit to not letting inflation run rampant, even if it stalls what he and his aides have often championed as price stability.
A second factor feeding the squeeze is dwindling deposit mobilisation. As the number of private banks has proliferated — 30 of them now jockeying alongside two state-owned behemoths — competition for deposits has grown fiercer. The past year has seen a remarkable expansion of bank branches, adding 266 new outlets in the last quarter alone to bring the total to 12,426. Yet, depositors are keeping their purse strings tight, and the impetus to save has wilted in the face of negative real interest rates.
Inflation so far outstrips deposit rates that saving becomes less attractive, eroding the fundamental base on which credit depends. Despite these headwinds, banks continue to lend, albeit under constricted circumstances.
In the final quarter of last year, loans amounting to 122.4 billion Br were disbursed, a modest but noteworthy 7.8pc increase from a year earlier. Private banks, for the first time edging past their public counterparts, accounted for 54.5pc of this volume. Such a milestone would normally cause applause, for it suggests these younger and smaller financial institutions are finally finding traction in an industry long dominated by state-owned banks.
The beneficiaries of these loans are spread across sectors, manifesting the slow but steady evolution of the economy. Domestic trade received the second largest share of the loans at 20.5pc, preceded by agriculture, which remains a mainstay, especially for smallholder farmers. It drew the largest share at 27.3pc, while the rising importance of manufacturing (15.7pc) points to a gradual push toward industrialisation.
Nonetheless, the overall credit picture is somewhat more complex.
Total outstanding credit has reached 2.1 trillion Br, a 10.1pc expansion YoY, but virtually all — 99.6pc — is tied up in private enterprises and cooperatives. The ratio mirrors the government’s encouragement of private-sector-led growth, a central plank in official rhetoric for years now. But, the balance between private and public lending, in practice, has not delivered the egalitarian spread of credit that policymakers sometimes pledge to achieve.
Recent data on reserve money uncovers the conundrum of the Governor and his team’s deliberate tightening in their bid to subdue inflation.
The banks’ reserve money shrank by 1.1pc in the past year to 473.2 billion Br. Ironically, the reserve requirement for commercial banks climbed by 15.4pc to 173.4 billion Br, an additional shackle on lenders who can ill afford further constraints. Yet, the reserve money multiplier jumped from 4.5 to 5.2, an indication that commercial banks have become more adept at generating credit out of deposits. While this might appear to hint at greater financial dynamism, it also points to mounting systemic risks.
The tension between curbing inflation and stimulating growth has rarely been sharper. Policymakers find themselves under siege, confronted with a double bind. Inflation might pick up anew if they loosen policy too much; if they remain hawkish, businesses would be strangled, and growth would decelerate. With national savings on a downward trend and foreign exchange in short supply, the Central Bank has chosen to emphasise inflation control.
Inaction, however, could not be an option. A downturn caused by illiquidity could develop into a deeper slump if left unaddressed. Lowering the reserve requirement ratio, thereby letting commercial banks deploy more of their funds as loans instead of holding them as sterile reserves, can be considered.
In a cash-starved environment, unlocking liquidity swiftly stimulates spending by businesses and households alike. Companies looking to expand, invest in new businesses, or cover wage bills could do so with greater ease, generating a ripple effect through employment and consumer demand.
Understandably, the Governor’s policy advisors remain sceptical of lower reserve ratios and caution against overreach. The memory of past bursts of lending that stoked inflation lingers. Flooding the market with cheap credit can, indeed, fuel price surges if the economy’s capacity to absorb increased spending lags behind. It may also spawn asset bubbles, especially in real estate ,where speculation runsahead of fundamentals.
Nonetheless, the immediate need for growth should weigh against these concerns. If inflation has shown signs of moderation — or at least is no longer galloping — then channelling extra cash into the credit system might tip the balance in favour of expansion. This, in theory, can boost investments, create jobs, and tighten the output gap so that the economy does not contract further.
Those who champion a cut to reserve requirements also note its precision compared to broader measures like across-the-board credit caps. Reducing the reserves, banks hold can be adjusted up or down more fluidly, providing the Governor with a fine-tuned instrument to nudge liquidity levels. On the contrary, credit caps risk stunting growth indiscriminately by treating all banks as uniform. The banks’ themselves, which vary in size, risk appetite, and portfolio composition, are then forced into a one-size-fits-all approach. Doing so has left promising enterprises starved of funds, a particular worry where finance is already scarce.
After all, an economy can ill afford stalling growth when it still relies on borrowed capital, and perhaps, as some would say, borrowed time.
Closing the AI Skills Gap in 2025
With artificial intelligence (AI) poised to reshape industries worldwide, a paradox is emerging. Despite growing demand for people with the knowledge to leverage the technology’s potential, AI-related skills remain in short supply.
The scarcity of AI-related skills – from proficiency in machine learning, prompt engineering, and data science to understanding AI’s ethical implications – is becoming a major obstacle to deploying the technology effectively. In one recent report, 47pc of executives say their employees lack the necessary skills. This will affect companies’ ability to move AI projects from conception to implementation. A 2023 report from the World Economic Forum finds that “six in 10 workers will require training before 2027, but only half of workers are seen to have access to adequate training opportunities today.”
This skills gap bodes ill not only for individual career growth but also for economic growth more broadly.
Capitalizing on the opportunities that AI presents will require updated approaches to education and training. In the coming year, educational and vocational institutions will likely place a much greater emphasis on teaching AI ethics skills, offering flexible lifelong learning, and infusing AI into their offerings to be more competitive.
AI ethics skills will become a core concern – and for good reason. In the space of a few years, generative AI has become available to anyone with a computer and an internet connection. For employers and their information technology (IT) departments, this raises the problem of “shadow AI,” or unsanctioned use of generative AI by employees, which could expose companies to a wide range of security, compliance, and reputational risks. In addition, the workforce will need AI ethics skills to manage new AI agents, like tools that can automate complex tasks that would otherwise require human resources.
Shadow and agentic AI both demand new guardrails to help users protect AI applications based on responsible AI practices. Education providers will begin to emphasise training on the fundamentals of AI explainability, fairness, robustness, transparency, and privacy. Without a basic understanding of how AI models generate their output, for example, those responsible for protecting data or controlling autonomous systems will be ill-equipped for the task.
With AI and other new technologies evolving rapidly, lifelong learning will become the new normal. The process can be divided into developing skills that meet immediate needs, anticipate future needs, and furnish always-in-demand expertise.
Many traditional roles within an organisation will soon change. Some employees who currently work independently (who do not manage other people) may join new types of teams in which humans manage AI agents. And, to prepare them for this fundamental change, demand for online courses and digital credentials in AI-related fields like natural language processing and machine learning will likely increase. The future use of quantum computing will continue to drive the need for new skills. And, the steady rise in the number and variety of cyberattacks – such as “harvest now and decrypt later” (HNDL) hacks – emphasises the importance of up-to-date cybersecurity skills.
Our organisation is working with community colleges across four American states to offer a new cybersecurity certificate that will prepare students for in-demand roles across the workforce. Similarly, our collaborations with Singapore Polytechnic and historically black colleges and universities (HBCUs) in the US provide young learners with free AI training. And while this process may begin in the classroom, we can also expect to see more opportunities for upskilling as the relevant technologies evolve.
For anyone who wants to stay competitive in the job market, lifelong learning has become indispensable.
AI and automation technologies can make existing education platforms far more effective, as we are likely to see in 2025. AI-powered solutions have reached a tipping point from being a nice-to-have to a must-have. Educators, whether in schools or other organisations, will find new ways to apply AI-powered tools to personalise and tailor learning experiences, understand students’ needs and match them with relevant courses, or enhance coaching and feedback.
The same technologies can also enhance customer service aspects of education. At IBM, we have already seen the benefits of using AI to analyze feedback from more than 60,000 learners in 47 languages. This led us to simplify online registration and other parts of the process. In the coming years, education systems and platforms will also benefit from multimodal AI models that can process audio, video, charts, and images to provide an even more effective, individualised learning experience.
By embracing AI, we can enhance learning and professional outcomes, improve operational efficiency, and reduce costs across the economy. But all of that will require developing the skilled workforce we need.
A Journey Down Meory Lane, Alumni Reunion
When a couple of old elementary school friends started chatting on WhatsApp, I was curious but unsure what they were planning. Soon, they created a group named after our elementary school and graduation year. It was clear they were organising a reunion for the class of 1990, the year before the regime we had known since birth was overthrown. Their ambition intrigued me, though I doubted their chances of success.
Initially, the group was small, with about six friends who had stayed in touch over the years. We struggled to remember the names of everyone in our graduating class of 48. One of the group’s founders suggested creating a roster, and we began listing names we could recall. Slowly, the list grew, but we were still about a dozen names short.
Then, a newly joined classmate shared an old group photo of us lined up before school. The image jogged our memories, helping us recall more faces and names. Photos are powerful triggers for memory. As the group expanded to about ten members, a friend from the UK joined, sparking excitement. Soon after, a few classmates from the US joined and brought even more energy, sharing contacts of others living abroad. Before we knew it, the group swelled to around 30 members.
Interestingly, the roster had grown beyond the original 48 names, reaching about 60. This was because many classmates had left before graduation for various reasons.
At this point, someone suggested sharing current photos to help us match faces with names. Gradually, photos trickled in, igniting waves of nostalgia. We greeted each other like we were meeting anew. Some struggled to recognise faces, partly because not everyone had been in the same class year. For example, those who joined later years had not shared time with those who left earlier. Others simply were not good with names or faces.
Joyful stories began to circulate in the group. Some recounted a Christmas drama performed during our final year, sharing laughs about comical incidents from rehearsals and the performance. One friend recalled the narration of books during idle moments, while another mentioned newspaper readings designed to encourage learning habits. Meanwhile, more classmates joined the group, and the collection of photos grew steadily.
That is when I had an idea. I remembered the Photo Mixer app I had downloaded from the Play Store. I often used it to surprise friends and family by creating commemorative images for holidays, birthdays, anniversaries, and other special occasions. With the growing cache of images shared in the group, I decided to use the app to create something special for the reunion.
When I shared the image file with the group, the response was overwhelmingly positive and filled with delight.
As new members joined and shared their photos, I updated the collage, incorporating their images and sharing the revised file. The process became an exciting experience, not because of any artistic skill, but because it reflected our shared love and passion for the memories we had built together.
As the chats continued, it became challenging to keep up individually, with participants joining from distant time zones, including Seattle. People hopped in and out of conversations during their preferred times, keeping the cherished memories alive. Some mentioned stopping their cars to respond, while others contributed during kitchen chores. Despite differences in location, lifestyle, and livelihoods, the enthusiasm and warmth only grew stronger with time.
Suggestions emerged for a Zoom meeting to connect virtually, while others proposed an in-person reunion, an idea complicated by the physical distances, as everyone was scattered across continents. Amid the excitement, some paused to commemorate beloved teachers and classmates who were no longer with us. One friend lost their life to a long battle with hypertension and stroke. Another was a casualty of the Ethio-Eritrean war, and yet another perished in a plane crash while working as an airline stewardess. For many in the group, these losses were news, even though they occurred decades ago, showing how detached we had been from one another over the past three and a half decades since graduation.
At the time of our separation, most of us were thirteen, unable to imagine our paths crossing again after so long. It was remarkable that, despite the years apart, an online social media platform could bring us together in just a few days. Without digital technology, such a reunion, connecting people in Addis Abeba and across the far corners of the world, would have been impossible.
The virtual reunion felt like a portal to an era of innocence, trust, friendship, and companionship. Almost immediately, it was clear that none of us had experienced the same pure love, care, and faith in others as we had during our time together before going our separate ways. Reconnecting with my childhood friends felt like rediscovering the best version of myself.
It is still early to predict what will come next, but one thing is certain: the outcome will be positive, thanks to the group’s shared experiences, collective goodwill, and common values. Even without any grand future plans, this reunion has been energising and fulfilling. Reconnecting with priceless old friends, once buried in the subconscious, has been a journey down memory lane like no other.
I found the reunion of old friends a perfect opportunity to reflect on and redefine life’s purpose and reset priorities.
Tariffs Protectionism’s False Promises
The world economy awaits with dread the arrival of Donald Trump’s trade tariffs. Trump clearly loves import duties and has promised to raise them for goods from China, Europe, Mexico, and even Canada. How much havoc this will wreak depends not just on the tariffs’ scope and magnitude, but also on the purpose to which they are put.
Economists dislike tariffs for a variety of reasons. Like all barriers to market exchanges, they create inefficiency. They prevent selling something of value more than they have, leaving buyers and sellers worse off in principle. Economic theory does recognise that this inefficiency can be offset by gains elsewhere. For example, tariffs can do some good in the presence of infant industries, knowledge spillovers, monopoly power, or national security concerns.
Even then, economists will argue that tariffs are a very blunt instrument. After all, an import tariff is a specific combination of two different policies: a tax on the consumption of the imported good and a production subsidy for its domestic supply, at equal rates. Any economic or non-economic objective can be met more effectively by deploying these policies separately and at customised rates, targeting them at desired outcomes more directly. To economists, tariffs are a pistol aimed at one’s own foot.
Trump’s view could not be more different. In his imagination, tariffs are like a Swiss Army knife, a tool that can simultaneously fix America’s trade deficit, enhance its competitiveness, foster domestic investment and innovation, shore up the middle class, and create jobs at home.
This view is almost certainly fanciful. Tariffs will have highly uneven effects on US manufacturing, benefiting some while hurting those that depend on imported inputs or foreign markets. Even where they boost profits, there is no guarantee this will lead to more investment in new technologies or job creation. Corporations that get richer can choose to distribute the proceeds to their managers and shareholders instead of increasing productive capacity.
If Trump insists on his view, the good news, for the rest of the world at least, is that the economic costs will be borne mainly by Americans. That is another key insight from economics: just as the benefits of opening up to international trade accrue mostly at home, so do the costs inflicted by protectionism. Hence it would be a tragic mistake for other countries to overreact and retaliate with their own tariffs. There is no reason for them to replicate Trump’s error and raise the risk of an escalating trade war.
Trump could, of course, adopt a more limited approach. He has often made a narrower case for tariffs, as a weapon to extract concessions from trade partners. Importantly, this implicit rejection of across-the-board tariffs also seems to reflect the view of his nominee for Treasury Secretary, Scott Bessent. Before the election, for example, Trump threatened Mexico and Canada with 25pc tariffs if they failed to “secure their borders.” In principle, such threats do not need to be carried out if other countries comply with Trump’s demands.
But, it is unclear whether using such threats to change others’ behaviour will be effective.
China, India, and other large countries are unlikely to be swayed by them, given the risks of appearing weak. In any case, tariffs are a poor threat regardless of whether one views them as a faulty pistol or a Swiss Army knife. In the conventional view, because tariffs are harmful to the domestic economy, they lack credibility as punishment for others. On the alternative Trumpian view, tariffs are inherently desirable, which means they are likely to be used regardless of what trade partners do.
A fourth, more realistic conception of tariffs has been effective in some key instances. Advocates of this perspective view tariffs as a shield behind which other, mainly domestic policies, can work more effectively. Traditionally, trade laws have allowed countries to use tariffs to protect vulnerable sectors or regions under specific conditions, effectively supplementing domestic social policy.
An even more significant example is infant-industry protection, which has worked best when it exists alongside other instruments to incentivise domestic firms to innovate and upgrade. Some notable cases include the late-19th-century United States, post-1960s South Korea and Taiwan, and post-1990s China. In each of these cases, industrial policies went far beyond trade protection, and it is unlikely that tariff barriers on their own would have produced the gains each of these economies experienced.
Similarly, green policies often require some trade barriers to make them economically and politically viable, as in the case of the European Union’s (EU) carbon tariffs and the local-content requirements of the US Inflation Reduction Act. In all these cases, tariffs play a supporting role for other policies that serve a broader purpose, and can be a small price to pay for the larger benefit.
Unfortunately, Trump has not offered a domestic agenda of renewal and economic reconstruction in any of these areas, and his tariffs will likely stand – and fail – on their own. When tariffs are moderate and are used to complement a domestic investment agenda, they need not cause much harm; they can even be useful. When they are indiscriminate and are not supported by purposeful policies at home, they do considerable damage, and more so at home than for trade partners.
Impact Investing Bridges Ethiopia’s Poverty Gap, Profit Divide
Impact investment appears to have gained traction in Ethiopia as a strategy, addressing the country’s social and environmental issues while pursuing financial returns. In a place where poverty, food insecurity, and climate vulnerability remain urgent, this hybrid approach presents a path for delivering economic growth and lasting societal benefits. By channelling capital toward ventures seeking to improve healthcare access, boost agricultural productivity, advance education, and develop renewable energy projects, impact investors hope to spur change beyond a mere balance sheet.
Observers say such efforts depend on collaboration among non-governmental organisations, banks, development financial institutions (DFIs), and the nascent capital market, all of which are critical in guiding Ethiopia toward sustainable growth.
Impact investment, broadly defined, directs money into projects intended to generate measurable positive outcomes for local communities and the environment. It offers investors a viable financial return. It is not philanthropy, though it shares some of the same ethos; it is an investment strategy that seeks to address dire problems through market-based solutions.
With its rising population and persistent development gaps, Ethiopia could become an ideal testing ground for this model. Many communities lack essential healthcare and modern agricultural tools, while educational resources remain scarce in remote regions. Supporters of impact investment argue that the country’s ability to leapfrog in specific sectors, such as mobile technology and renewable energy, creates favourable conditions for private capital to achieve results that traditional aid or conventional investments might not deliver on their own.
Among the most influential players in this new wave are non-governmental organisations (NGOs). Because they are present on the ground, NGOs possess insights into local needs that are often inaccessible to outside investors. NGOs connect farmers to resources that improve yields, organise basic financial literacy classes, and partner with health clinics to distribute essential services. Their work identifying and articulating community-level problems helps ensure that investments reach initiatives with the most potential impact.
These organisations also focus on capacity building, offering training in project management or sustainable farming techniques to help local groups effectively use incoming funds. By acting as intermediaries between investors and local initiatives, NGOs help businesses, healthcare providers, and community leaders acquire the skills necessary to manage funds efficiently. That role is especially vital in a country where many enterprises have not encountered large-scale investment and should learn financial reporting, corporate governance, and risk management from the ground up.
Banks, meanwhile, are beginning to recognise the promise of impact ventures. Some have introduced specialised loan products or credit lines catering to businesses pursuing social or environmental objectives. These may be agricultural cooperatives devising drought-resistant seeds, solar energy providers installing off-grid power in rural communities, or private clinics offering affordable care in underserved districts.
The rationale for banks is partly aligned with profit; by supporting these ventures, they cultivate new customers and local economic ecosystems that eventually translate into broader business opportunities. Yet, there is also an incentive to safeguard investments, which has prompted the development of innovative financing structures. Banks, for instance, may mix grants and loans or incorporate guarantees to reduce risk, appealing to investors who might otherwise be reluctant to enter uncharted territory. These arrangements expand financial inclusion and help marginalised groups access credit they might not get through traditional banking channels.
Development financial institutions, specialised financiers focused on emerging markets, likewise serve as a linchpin.
DFIs often venture where commercial investors fear to tread, seeding projects that have the potential to catalyse follow-on capital from private firms. By providing services ranging from early-stage financing to long-term loans, DFIs can be patient in a way that profit-driven investors usually are not. They allow worthy ideas time to grow even if returns materialise later. Technical assistance is central to their value proposition.
DFIs can fund feasibility studies, support market research, or train local staff, making ventures more attractive to mainstream capital providers. In essence, DFIs try to unlock possibilities with strong social or environmental upside that might not fit neatly into the mandate of regular commercial banks. Because they are structured to promote sustainable practices, many DFIs focus resources on areas such as renewable energy projects that displace fossil fuels, agricultural innovations that ease food insecurity, and medical services that address otherwise neglected communities.
The emerging capital market adds further momentum, which government officials and private actors hope will broaden opportunities for entrepreneurs and impact-driven ventures. While still at an early stage, developing vibrant capital or bond markets holds the promise of greater transparency, potentially boosting both domestic and international investors’ confidence. By offering mechanisms to issue green bonds, social impact bonds, or other specialised financial instruments, capital markets can help match investors who value mission-driven ventures with enterprises eager for capital.
Expanding these markets could, in turn, facilitate a shift away from short-term speculation toward longer-horizon investment strategies. That cultural shift may prove essential in a country where infrastructure projects, healthcare expansion, and agricultural transformations can take years to deliver a visible payoff.
Sceptics argue that impact investment might sometimes blur the line between profit-driven initiatives and philanthropic efforts or that it risks prioritising returns at the expense of genuine social progress. Proponents respond that clear metrics and accountability structures serve as guardrails, ensuring that projects deliver the positive impacts they promise. By measuring health outcomes, farm yields, school enrollments, or emissions reductions, investors gain a window into what their money accomplishes beyond dividends or interest payments.
In Ethiopia, where official statistics often lag real-time realities, that kind of granular assessment can prove vital for course corrections and policy decisions alike.
Can Building Public Tech Infrastructure Turn to Dystopian Dangers?
In recent years, the concept of Digital Public Infrastructure (DPI) has gained considerable attention from the international community, including the United Nations and the G20, as a new policy paradigm for development. But, understanding the risks of DPI is crucial to ensuring that its potential benefits materialise.
The risks stem from the fact that “digital public infrastructure” lacks a clear definition.
The term encompasses the many digital technologies that serve as economic and social infrastructure, from digital identification and payment systems to data exchanges and health services. As a policy initiative, though, DPI refers to a vague vision of using these technologies to serve the public interest. This could result in the internet and technological innovation working for everyone, or only as easily turn them into tools for political control.
In discussions about DPI, policymakers often point to cases that highlight how technology and connectivity can spur development. They frequently cite India’s Unified Payment Interface, which has expanded financial inclusion and reduced the costs of digital transactions for its hundreds of millions of users.
It is also understood that such infrastructure is to be built with Digital Public Goods (DPGs), a concept that encompasses open-source software, open standards, and other non-proprietary components. This definition is partly intended to position DPIs as being “for the public” but also to enhance competition and mitigate concentrations of power in the global digital economy.
Proponents point out that DPI could bolster international cooperation, particularly as the 20-year review of the World Summit on the Information Society (WSIS) approaches. This important UN initiative has provided the framework for countries to collaborate on digital development. Although authoritarian states have previously sought to assert greater control over the internet’s governance during these negotiations, a focus on promoting DPI could avoid this politicised debate and instead promote a constructive agenda to bridge digital divides.
But, basing policy on such an ill-defined concept poses risks. Ideally, governments would convene other stakeholders to create an enabling environment for DPI and safeguard users’ rights and interests. It is easy to imagine, however, that some governments will place their own interests above civil liberties and fundamental rights, using this infrastructure for surveillance and targeting in the name of law enforcement or national security. An especially pernicious example could involve the monitoring and regulation of individual behaviour through dystopian social-credit systems.
While many proponents hope that DPI could chip away at Big Tech’s outsize power, it has also been associated with narratives of digital sovereignty that could contribute to the internet’s fragmentation, a systemic threat to global communications. For example, one can imagine scenarios in which some governments challenge the multi-stakeholder model for governing global internet resources like IP addresses and domain names on the grounds that they constitute DPIs.
In fact, we recently witnessed something similar in the European Union (EU) when it proposed an amendment to the Electronic Identification, Authentication, & Trust Services (eIDAS) regulation that would have empowered governments to mandate the recognition of digital certificates that did not adhere to stringent industry standards. This risked undermining the global governance model for browser security and could have allowed European governments to surveil communications within and beyond their borders.
The policy vision of DPI will continue to evolve, and ongoing discussions, it is hoped, will help identify and clarify further opportunities and risks. Initiatives such as the UN’s Universal DPI Safeguards Framework, which seeks to establish guardrails for DPI, are a promising start. But much more must be done. For example, the UN’s framework has recognised the need for continuous learning to ensure that the right safeguards are in place.
As the concept of DPI gains traction in the UN system and other multilateral organisations, vigorous and informed debate about its potential advantages – and pitfalls – will be essential. With clear-cut policy guidelines and protections, we can help prevent these technologies from becoming tools for surveillance and repression, ensure that everyone benefits from the burgeoning digital economy, and keep the internet open, globally connected, and secure.
Subsistence Is Not Enough
In 1990, more than one-third of the global population lived below the World Bank’s extreme poverty line (2.15 dollars a day). Since then, the share has fallen below 10pc, a remarkable and inspiring achievement. But barely scraping by falls far short of what impoverished people aspire to.
To this end, the McKinsey Global Institute (MGI) has introduced the concept of an “empowerment line.” Building on the work of development economists, this threshold represents the income required to access essentials like food, shelter, healthcare, education, water, transportation, and energy while also saving enough to weather unexpected emergencies.
Income is vital for economic empowerment, but affordability is equally important. While the income required to meet basic needs varies by country, the global benchmark is 12 dollars per person per day in purchasing power parity terms. Despite decades of progress, roughly 80pc of people in low-income economies, and 50pc in middle-income countries, still fall below this threshold. Even in the world’s most developed countries, 20pc of the population remains economically disempowered.
One reason for this persistent empowerment gap is that rising GDP per capita does not always translate into widespread economic benefits. The cost of essentials, such as housing in high-income countries and food in lower-income countries, often rises faster than wages, effectively “crowding out” income gains and eroding living standards.
Lowering the cost of critical goods and services could play a crucial role in promoting inclusive development. MGI estimates that reducing prices in high-cost countries to match those of more affordable peers at similar income levels could lift around 230 million people – 2.8pc of the global population – above the empowerment line. In countries with per capita incomes between 2,500 dollars and 5,000 dollars, for example, food costs often vary widely, with some households paying more than twice as much as others for necessities.
Narrowing these gaps would not only alleviate financial pressures but also enable millions of families to achieve lasting economic security.
Efficient markets help keep prices in check, while inefficiencies drive up costs and limit access to essential goods and services. A recent MGI report shows the need for governments to improve affordability and emphasises the effectiveness of fostering competition, domestically and globally, through regulations and trade policies.
The private sector, which employs the vast majority of the global workforce, is also well-positioned to support economic empowerment, and there are three compelling reasons why companies should.
For starters, the private sector is already driving economic empowerment by creating quality jobs and delivering goods and services. According to MGI, US businesses channel four trillion dollars annually toward empowering employees, suppliers, and communities, while their European counterparts contribute 2.1 trillion dollars. At this scale, even minor improvements could generate substantial benefits. Businesses face increasing pressure to consider their social impact alongside financial performance.
Research shows that addressing the broader effects of their activities can help companies enhance employee satisfaction, improve customer loyalty, and boost productivity.
Lastly, an empowerment-oriented approach can reveal new market opportunities. While few mobile providers entered sub-Saharan Africa or South Asia with the goal of empowering local communities, their success at linking small farmers to global markets and accelerating financial inclusion has accomplished that. A similar trend is playing out in the retail sector, where discount grocery stores’ low-cost business model has made food more affordable for millions of people around the world.
To understand how businesses can promote empowerment, MGI analyzed initiatives launched by 100 large companies from a range of industries worldwide. These efforts include subsidised healthcare, in-house training programs to help employees advance to higher-paying roles, and philanthropic activities like donations to food banks and disaster relief. A growing number of companies have also pledged to pay their employees a living wage, with some requiring their suppliers to do the same.
But, determining the most effective approach remains a considerable challenge. While marginal abatement cost curves are a widely accepted tool for assessing the cost efficiency of efforts to reduce greenhouse gas emissions, there is no comparable framework for evaluating the impact of social initiatives. To fill this gap, MGI has developed an “empowerment impact” metric, which measures the benefits of such programs relative to their costs. A ratio of 1.0 means that each dollar spent delivers a dollar in benefits to households below the empowerment threshold, while a lower ratio reflects greater cost efficiency.
Using this metric, companies can better design and implement social programs. For example, MGI estimates that if US corporations and foundations improved the cost efficiency of their charitable giving – totalling 140 billion dollars annually – by just 10pc, they could lift an additional five million people above the economic empowerment threshold.
Companies could leverage their expertise to identify the groups most at risk of falling below the empowerment line, tailoring solutions to address specific challenges, such as housing shortages in Germany, high food prices in Vietnam and China, and rising healthcare costs in the US. Recognising these local contexts could help companies develop initiatives that play to their core strengths. For example, a pharmaceutical company might focus on expanding access to life-saving drugs, while a bank could invest in affordable housing projects.
To be sure, economic growth is the single most powerful driver of poverty reduction, particularly in low- and middle-income countries. But growth alone is not enough. Achieving meaningful progress requires widely shared benefits, supported by robust social provisions and improved affordability. Without these foundations, economic empowerment will remain elusive, preventing millions of people from reaching their full potential.
Pride Overpowers Empathy, Civility
Last weekend, my family and I set out for a simple visit to relatives in the Old Airport neighbourhood. What should have been a routine trip quickly turned into a harsh reminder of the decline in civility and respect within the society.
The incident began innocently enough. As we parked near our relative’s home, a man in another car reversed recklessly, nearly hitting a family member who had come to greet us. The close call startled us. My husband and I sat in silence, processing what had happened.
A relative stepped forward to point out the driver’s mistake. Instead of apologising, the man exploded with anger. His reaction was not just defensive but hostile, laced with insults. He accused us of arrogance, assuming the issue was about the car we drove or our youth. We were stunned but decided not to escalate the situation and quietly entered the house.
Minutes later, my husband went back to the car to retrieve our daughter’s diaper bag. What he found left us reeling: our new vehicle had been vandalised. Long, deep scratches marred the back of the car, clearly inflicted with a sharp object.
Witnesses confirmed that the culprit was the same man who had nearly caused the earlier incident. This was no accident. It was a deliberate act of spite.
The damage was devastating, both emotionally and financially. Repairs cost us tens of thousands, compounded by the unavailability of materials locally. The actions of a man in his late fifties, an age that should come with wisdom and maturity, revealed something far darker: a complete disregard for others and the principles that uphold a community.
This man’s behaviour was not just disappointing; it reflected a troubling societal decay. The inability to take responsibility for one’s actions, the prioritisation of pride over reason, and the use of malice to settle trivial grievances point to a deeper problem.
A healthy society relies on shared values such as kindness, accountability, and respect. These principles serve as the glue that holds communities together, allowing conflicts to be resolved constructively. Yet, incidents like this show how easily these foundations can crumble when individuals abandon empathy and reason for anger and ego.
At its core, this incident reflected a clash between accountability and pride. A simple apology for the near-accident could have resolved everything. Instead, the man chose to escalate, first with words, then with actions.
Anger and pride are destructive forces. They cloud judgment and lead to behaviour with far-reaching consequences. His irresponsible actions didn’t just damage a car; they damaged trust, respect, and the sense of community that holds people together.
Accountability is a cornerstone of any functioning society. It ties individuals to their actions and ensures that mistakes are addressed constructively.
When people reject accountability, they harm not only themselves but also the trust within the communities. A society without accountability fosters resentment, alienation, and chaos.
Every action, whether good or bad, creates a ripple effect. The driver’s decision to vandalise a car did not just cost us financially, it left us questioning his mindset. It was a reminder of how bitterness can overshadow reason, and how one person’s hostility can impact others profoundly.
What made the incident even more disheartening was the man’s age. In his late fifties, he should have embodied maturity and wisdom. But maturity isn’t about age. It’s about acting responsibly, resolving conflicts with grace, and prioritising the greater good over personal pride.
When older generations fail to set an example, they erode the very values they should pass down. It raises a troubling question: if maturity cannot be expected from those in their later years, where does that leave younger generations seeking role models?
This incident is a reminder that rebuilding societal values starts with individuals. While people cannot control others’ actions, they can control how they respond and what values they choose to uphold.
Accountability is the foundation of a healthy society. When people take responsibility, whether through apologies or making amends, they restore trust and strengthen communities.
In a better society, the initial encounter would have ended differently. A mistake would have been met with an apology, turning a tense moment into an opportunity for connection. Instead, pride and hostility escalated it into something unnecessarily destructive.
A sincere apology for his mistake could have diffused the situation entirely, replacing animosity with understanding.
Open and respectful communication prevents misunderstandings from becoming conflicts. Dialogue fosters understanding and leads to constructive solutions.
At any age, people must model the behaviors they wish to see. Acts of kindness, humility, and accountability inspire others to do the same.
The scratches on our car will eventually disappear, but the lessons remain. While people cannot change others, they can change themselves. By committing to accountability, empathy, and respect, they can be the change they wish to see.
In every action, one is making a choice. Do they let anger, pride, and irresponsibility define them? Or do they rise above them and work to rebuild a culture of respect and decency?
Everyday actions matter. Every act of kindness, every moment of accountability, and every effort to understand someone else brings people closer to a society where stories like this become rare.
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