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Addis Abeba’s municipal authorities are rolling out a digital overhaul in urban transport infrastructure, targeting what has long been a cash-heavy, allegedly graft-prone parking system. Through the Addis Abeba Traffic Management Authority (TMA), a new cashless payment platform has been launched in 10 parking lots, eliminating manual paper receipts and laying the foundation for a fully digitised parking ecosystem.

“This'll completely remove cash handling from the process,” said Mulugeta Degefu, the Authority's technology officer, who administers the new platform.

The digital parking system operates through a mobile application developed internally. Drivers should first register their vehicles to access the service. Upon entering a parking lot, they log their license plate number into the app. When leaving, they re-enter their number, triggering an automated system to retrieve the parking duration and fees charged. Drivers then receive text messages confirming entry, exit, and the amount payable.

Fees are set at 20 Br for half an hour, with an additional daily interest charge of five percent for late payments made beyond a 24-hour grace period. Payments are exclusively processed through the Commercial Bank of Ethiopia (CBE), using either CBE Birr, CBE Plus, or in-person transactions at bank branches.

The TMA say the new system is designed to boost revenue while also eliminating the millions of Birr spent annually on printing paper receipts, a major channel for alleged embezzlement. They hope that automation ensures transparency and accountability, addressing longstanding irregularities in parking revenue management. The Authority struggled with issues such as unpaid invoices and widespread under-collection by service providers.

“It'll save the entire cost of printing paper,” Biniam Getachew, director of Parking Traffic Infrastructure Management said, estimating annual savings of between four million and six million Birr.

Last year, the Authority collected eight million Birr from parking associations, but with the new digital platform, they anticipate revenues to double or even triple.

Over 600 digital tablets have been distributed to traffic officers to issue electronic penalties. Over the last nine months, the TMA has collected over 700 million Br from parking fees and traffic penalties combined.

Under the old system, parking charges varied widely, ranging from 10 Br to 20 Br an hour, subject to arbitrary discretion by local parking associations and their members. The new digital model standardises rates, although pricing may vary based on location, with higher fees in central city areas and lower charges in suburban districts.

Biniam disclosed that Addis Abeba currently has 353 parking associations, with over 2,800 operators involved. Each operator has been provided with a smartphone and training to facilitate the implementation of the digital payment system, restricted exclusively to registered locations.

The shift to a digital system aspires to meet the federal government's broader financial modernisation strategy, the National Digital Payments Strategy (NDPS), to create a cash-lite and financially inclusive economy. However, the digital parking platform currently excludes vehicles registered outside Addis Abeba, as their information is not captured in the local database.

“They can only pay in cash once,” Mulugeta told Fortune, disclosing the mandatory registration requirement.

The Authority has registered over 700,000 vehicles and more than one million drivers in the capital.

According to Biniam, the system is already demonstrating benefits despite initial irregularities, including operators allowing unauthorised vehicles without issuing receipts or fully reporting collections. Payments are now swiftly deposited into operators’ accounts within days, encouraging compliance and timely reporting. He noted the digital approach addresses recurring issues tied to parking associations’ two-year permits. After two years, associations claim insufficient funds and lose interest.

“This system solves that problem,” he told Fortune, "ensuring steady revenue flow and accountability."

According to Mustofa Abdella, an economist from Zafer Plus Business & Investment Consultancy Services, while no system is completely fraud-proof, the digital platform substantially curtails malpractice through automated time tracking, centralised payments, vehicle licensing integration, and real-time monitoring. He recommended regular security updates to address potential vulnerabilities.

Behailu Tamiru, economist and vice president at St. Mary’s University, echoes his views. He believes past issues of a lack of structured documentation can be addressed through drivers and operators held to account, with the increasing prevalence of digital payment systems in sectors such as document authentication. While recognising reasonable revenue projections from the digital transition, Behailu was reluctant to see the merit of payments limited to the CBE.

“This may pose challenges for users," he said. "They may eventually seek alternative options.”