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- The internet shutdown imposed by the government in July cost Ethiopia an estimated loss of at least $100 million
- The report indicates that, apart from the impact on fundamental rights, internet shutdown in Ethiopia each day caused a loss in excess of $4.5 million, in terms of the economic impact on the GDP
The internet shutdown imposed by the government in July cost Ethiopia an estimated loss of at least $100 million. The projection was revealed by NetBlocks, a group that monitors internet freedom worldwide. The calculation is based on the daily impact of the cut on direct economic costs. According to the Cost of Shutdown Tool statement(Cost), apart from the impact on fundamental rights, internet shutdown in Ethiopia each day caused a loss in excess of $4.5 million, in terms of the economic impact on the GDP. The ‘Cost” was developed by internet access advocacy groups, the Internet Society and Netblocks to calculate the economic impacts of blackouts. The tool uses a combination of telecom industry and development indicators to assess the impact of internet disruptions on digital prosperity.
The internet and social media blackout in Ethiopia, which lasted 23 days (552 hours), ended only last week. Explaining the process of calculation the spokesman said that the Cost, incorporating the Collaboration on International ICT Policy for East and Southern Africa (CIPESA’s) economic model indicates direct and indirect losses are divided evenly, with approximately $50 million in the net direct impact and the remainder representing indirect losses.
According to sources, the estimate reflects lost business and also included loss of informal trade and a degree of lost confidence. The inevitable impact on foreign investment will be known later after re-evaluating risk assessments. The sectors which rely on internet connectivity for returns or gain social impact can become less attractive for investors. Even traditional sectors of Ethiopia have become vulnerable as they have started to rely on digital services. The shutdown was challenging for international aid projects to monitor implementation and enforce anti-corruption mechanisms, a critical criterion for the disbursement of public funds and foreign aid.
Last year an information blackout was imposed following the assassination of five high ranking officials, which the government alleged was a foiled coup attempt. The latest and Ethiopia’s second extended telecommunications blackout in two years can dissuade investors say experts. According to a report, by the Human Rights Watch (HRW) released in March, Ethiopia shut down the internet eight times in 2019 alone including during public protests and in its bid to prevent cheating during national exams.
