Ethiopian Electronics Manufacturing Powers Up



Ethiopia, a fascinating and exotic country, has long been on my wish list of travel destinations. Some of the attractions for me included its rich history, culture, food and coffee. I recently spent a week in the Northern Highlands of Ethiopia with stays in Addis Ababa, Lalibella, Gondar, and the Simien Mountains National Park. Although I had read about Ethiopia’s challenges with electricity and water, I was pleasantly surprised at the availability in the areas I visited. During my visit, I experienced one electrical outage per day lasting about 30 minutes each time. Since outages happen so frequently, everyone seems prepared with flashlights and sometimes backup generators. Internet connectivity was slow but readily available. Social media access was restricted due to the government mandated state of emergency; however, the locals found their way around this by using VPN tunnels. Most technology services, such as mobile, fixed, IP, VoIP, and VSAT, are government-owned and/or operated by Ethio Telecom (ET).1 This meant that I had to purchase a local SIM card simply for my mobile phone to function. No other carriers are allowed to operate in country. While these infrastructure challenges were only mildly disruptive to me, they do have a major impact on manufacturing facilities within the country. In a typical month, for example, firms will experience an average of 8.2 electrical outages while a new firm can expect to wait over 90 days to get electricity.2 Electrical outages not only interrupt manufacturing operations; they also affect financial transactions, ecommerce, and internet availability.

■ Figure 1. Cheryl and Asfaw in Lalibella.

Despite some of the impressions given by current government travel warnings, I was happy to experience a country that is definitely on the rise. I felt safe and welcomed throughout my entire stay. The tourism industry has struggled mightily since the state of emergency was declared last year and my hosts reported booking declines of more than 75%. They routinely thanked me for coming and asked me to share what a wonderful place it is to visit. I definitely agree! Seeing the incredible entrepreneurial spirit of the Ethiopian people and their pride in their country was both inspiring and illuminating. According to data from the World Bank,3 Ethiopia continues to face many challenges but has also made great strides. Poverty continues to decline while life expectancy continues to rise. Every child has access to free, public education. Even university education is free. However, Ethiopia has one of the lowest rates of access to modern energy services. Roughly 77% of the population lacks access to electricity and those who do have it experience frequent outages due to overloading of the network. And, with almost 85% of Ethiopians living in rural areas, there is a significant difference between the power supply of the urban and rural population: only 2% of the rural residents but 86% of the urban residents have access to electricity. The current energy supply is primarily based on biomass but Ethiopia has ample renewable energy sources including hydro, wind, geothermal, and solar.4 There is a real, urgent need for substantial investments in the power system and the government is struggling to keep up.

■ Figure 2. Asfaw’s Aunt Roasting Coffee Beans.

With this in mind, it was fascinating to see firsthand how technology is impacting and could further improve the life of the average Ethiopian. As a frequent traveler, I’ve grown accustomed to using websites and credit cards to arrange for hotels, tours, and guides. That didn’t work so well in Ethiopia. Though some businesses did have websites, making a reservation typically involved emailing people back and forth. And, once in country, only major establishments took credit. Ethiopia definitely still has a cash-based economy. While many people did have mobile phones, few were smartphones. (Wireless penetration currently stands at about 44% as compared to the sub-Saharan average of 53% and the US average of 121 %.) It felt like a step back in technology time but it appears that Ethiopian information and communications technologies (ICT) are finally beginning to emerge.

■ Table 1. Proposed Acceptable % of Defective Materials5

A recent article in The Ethiopian Reporter detailed the state of the smart electronics industry with a focus on the mobile phone market.5 Ethiopia now has fourteen factories assembling mobile phones up from one just five years ago. These factories produce about 34% of the mobile phones in the country. Unfortunately, more than 61% of all mobile phones in the country are obtained illegally and up to 90% of smartphones are smuggled in. Due to a combination of illegal importation, cumbersome tariffs, and the availability of electronic components, only 20% of the phones manufactured in Ethiopian are smartphones. This hampers the ability of local manufacturing firms to compete in the market and also impacts the reliability of their finished product. Because all electronic components currently have to be imported, Ethiopian phone manufacturers rely on Semi-Knocked-Down (SKD) and Complete-Knocked-Down (CKD) kits of parts. Table 1 shows how this impacts the quality and reliability of their finished product. Incoming materials in kits for smartphones, for example, can have upwards of a 7% failure rate! This is an added stressor on an emerging electronics industry.

Successful mobile phone electronics manufacturing can significantly impact the everyday lives of Ethiopians by providing jobs, opportunities, and even health care throughout the country. IEEE’s Spectrum magazine recently published an article describing how smartphone-based diagnostic tools help bring medicine to Africa’s rural clinics.6 One example describes a snap-on smartphone accessory that makes use of the camera to allow women to take “cervical selfies,” a valuable tool in the diagnosis of cervical cancer which kills a huge number of women in low-income countries.

Smartphones are also increasingly part of an educational revolution, enabling students to reach content and resources that might otherwise be unreachable especially in the rural countryside. I was extremely impressed with the educational opportunities provided to young Ethiopians. All of our local guides were college-educated and multi-lingual. All students learn at least one other language, usually English, beginning in primary school. In the smaller towns I visited, the children I met wanted to practice their English with me and they all aspired to become scientists and engineers. In Lalibella, I met one local student named Asfaw who was preparing to take entrance exams for university placement. He dreams of becoming an engineer and traveling to the US. Asfaw invited me into his home to talk more about engineering (and to share his test scores with me). The visit provided wonderful insights into both the challenges and opportunities he faces. He lives in a typical, tiny government-owned single room with his Aunt. Although the home lacks running water and plumbing, it does have electricity (See Figures 1 & 2). Asfaw moved to the city so that he could attend school daily and works to help support his family. He owns a mobile phone, although it’s not a smartphone, and he has access to a computer and internet at his school. He’d love to own his own a computer and smartphone one day, a dream that would be more attainable if electronics manufacturing can thrive in Ethiopia.

Seeing Asfaw’s home drove home how access to mobile technology, and technology in general, could improve the lives of people all over the country. Given the government’s emphasis on early education, infrastructure improvement, and programs to expand ICT development, the future looks bright for Ethiopians and their emerging electronics manufacturing. However, the energy situation needs significant investment in order for companies to thrive. The government’s desire to lure foreign investment and expand manufacturing will lose steam without reliable power. For electronics companies looking for opportunities in developing countries, Ethiopia appears ready and willing.









Cheryl is a reliability engineering consultant with over 20 years of experience in electronics manufacturing focusing on failure analysis and reliability.

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