IT Services - Ethiopia

Ethiopia

The IT Services market in Ethiopia is expected to see a significant increase in revenue, with projections indicating it will reach US$2.44bn by the year 2025.
Among the various segments within the market, Business Process Outsourcing is set to dominate, with a projected market volume of US$0.92bn in the same year.
This dominance is indicative of the growing demand for outsourcing services in the country.
Furthermore, the IT Services market in Ethiopia is expected to experience a steady annual growth rate of 9.67% from 2025 to 2029.
This growth rate will result in a market volume of US$3.53bn by the year 2029, showcasing the sector's potential for expansion and development.
In terms of spending, the average Spend per Employee in the IT Services market is projected to reach US$38.02 in 2025.
This metric serves as an indicator of the level of investment and resources allocated to each employee within the industry.
When compared globally, it is worth noting that United States is expected to generate the highest revenue in the IT Services market, reaching a substantial US$550.30bn in 2025.
This highlights United States' position as a major player in the global IT Services market sector and emphasizes the size and significance of its market.
Ethiopia's IT Services market is experiencing rapid growth, fueled by a burgeoning tech startup ecosystem and government initiatives to promote digital transformation.

Key regions: United States, China, India, Japan, Germany

Definition:
The IT Services market encompasses a wide range of services used by organizations to create, manage, and deliver information, and it includes services that provide assistance with various other business functions. The primary goal of IT services is to ensure that information technology infrastructure, applications, and systems are effectively implemented, operated, and optimized to support an organization's business objectives and requirements. The specific range of services offered may vary depending on the service provider and the client's requirements.

Structure:

IT Services contains four distinct markets that are based on different services:

IT Consulting & Implementation covers advisory services that help businesses evaluate their technology strategies and align them with their business strategies or internal processes.
Business Process Outsourcing (BPO) refers to the transfer of entire business processes or individual activities from a company to a third party and is often IT based. BPO covers a wide variety of business processes, usually either in the back office (e.g., human resources) or in the front office (e.g., customer service in call centers).
IT Outsourcing refers to the external contracting of all IT-related services instead of relying on company-owned resources. In an IT context, these activities include IT administration, IT application, and web hosting services.
The Other IT Services market covers revenues for areas that are not specifically mentioned in the other markets, such as system integration, software installation and support, and IT education and training.

Additional Information:

The IT Services market comprises revenues, revenue change, average spend per employee, and a list of the key players in the market and their consolidated revenues. Market values represent revenues that are generated by primary vendors either directly or through distribution channels at the manufacturer price level (excluding VAT). Reported market revenues include spending by enterprises (B2B) and governments (B2G). Detailed definitions of each market can be found on the respective page where the market data is displayed. Key players in the market include IBM, Cognizant, Hewlett Packard Enterprise, and TCS.

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Analyst Opinion

The IT Services market in Ethiopia has been experiencing significant growth in recent years.

Customer preferences: Customers in Ethiopia are increasingly demanding IT solutions that are tailored to their specific needs and are cost-effective. They are looking for innovative solutions that can help them improve their business processes and increase efficiency.

Trends in the market: One of the key trends in the IT Services market in Ethiopia is the growth of cloud computing. Many businesses in the country are adopting cloud-based solutions to reduce costs and improve flexibility. Another trend is the increasing demand for mobile applications, as more and more Ethiopians are using smartphones and tablets.

Local special circumstances: Ethiopia is one of the fastest-growing economies in Africa, with a rapidly expanding middle class and a young, tech-savvy population. The government has also been investing heavily in infrastructure, including the development of a national fiber-optic network. These factors have created a favorable environment for the growth of the IT Services market.

Underlying macroeconomic factors: The growth of the IT Services market in Ethiopia is being driven by a number of macroeconomic factors, including a growing economy, a young and tech-savvy population, and government investment in infrastructure. In addition, the country's strategic location and its large domestic market make it an attractive destination for IT companies looking to expand in Africa.

Methodology

Data coverage:

The data encompasses B2G, B2B, and B2C enterprises. Figures are based on enterprises' technology spending on products, consulting, and outsourcing services.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of key players in the industry, Statista's primary research and surveys, and IT associations. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, internet users, and telecommunication. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the exponential trend smoothing method is used based on the market data characteristics. The main drivers are the GDP and its sector composition, internet penetration, the level of digitization, and the attitude toward IT security.

Additional notes:

The data is modeled using current exchange rates. The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.