Government Software Projects Now Exclusive to Domestic Companies

In a significant policy shift, Ethiopia’s Ministry of Innovation & Technology has announced that all government software development projects will now be awarded exclusively to local companies.

The news comes after a public-private dialogue held last month aimed at establishing a framework for improved collaboration between the government and private sector.

The ministry has so far registered 21 local software firms in its online catalog, hosted at www.ictcod.gov.et, according to Seyoum Mengesha, CEO of the Digital Economy project at the Ministry of Innovation and Technology. This number, however, seems disproportionately low compared to the many IT firms operating in the capital alone.

“Ethiopia has a growing number of talented software companies, and the Ministry is committed to supporting them. Our policy prioritizes local companies for government software development projects whenever their capabilities are sufficient,” Said Seyoum.

“For complex projects that require expertise exceeding current domestic capacity, we encourage joint ventures with foreign companies,” he added. This, according to Seyoum, allows for knowledge and technology transfer, ultimately strengthening the domestic software development industry.

Seyoum further explained that when joint ventures aren’t feasible, local companies can still take on the project and hire foreign talents. This approach ensures local data stays secure, as exemplified by data centers.

The Ministry has established a direction to assess the capabilities and standards of software development companies in Ethiopia. This initiative began three months ago and has already evaluated the capacity, standards, and portfolios of 21 companies. To expand this evaluation, a database is set up to facilitate the assessment of additional companies.

“Our primary responsibility is to build a national digital system that will promote the development of the country’s digital economy,” Seyoum stated. “We are working to ensure the practical implementation of the digital economy and establish a system that allows local companies to be fair actors in this space.”

The objective of the Digital Economy project is to ensure sustainable growth by putting in place the right standards, regulations, and frameworks, according to the ministry.

According to Baheru Zeynu, founder of Africom Technologies, one of 21 registered companies, the decision to reserve government software projects for local firms is the culmination of long-standing advocacy by the private sector and represents a determined move by the government to position the private sector as the primary owner of resources and knowledge in the tech industry.