Transforming Ethiopia’s Health Sector: Digitizing Payments for Improved Access and Efficiency

A pivotal point in this initiative is the signing of Service Level Agreements (SLAs) between the MoH and eight of Ethiopia’s leading financial service providers. These agreements, supported by the National Bank of Ethiopia, the Ministry of Finance, and the Health Insurance Services, as well as UNDP-hosted Better Than Cash Alliance, marks a crucial milestone in Ethiopia’s journey toward the full digitalization of healthcare payments.

The SLAs with financial service providers signal an appreciation of the harmonization required to strengthen and build a sustainable healthcare system. It also signifies a broader commitment to digitization, aligning closely with Ethiopia’s National Digital Payment Strategy (NDPS 2021-2024). Since its implementation, Ethiopia has witnessed rapid growth in digital financial services, with over 20 million new mobile money accounts opened between 2021 and 2022. By June 2024, the total number of mobile money accounts had reached nearly 107.5 million, solidifying the country’s transition to a more digital economy.

The success of Ethiopia’s digital financial services has provided a strong foundation for the health sector to integrate similar innovations. By utilizing mobile money and digital banking services, the MoH aims to reduce inefficiencies in financial transactions, ensuring that healthcare providers and beneficiaries experience seamless payment processes.

Building on a Strong Foundation: The Digital Health Payments Initiative (DHPI)

MoH is championing institutional leadership through the DHPI to ensure inclusive health services by leveraging responsible digital payments and DFS. Recognizing the transformative potential of digital finance, MoH has been working to integrate responsible digital payment solutions into three key areas:

• Payments to Health Extension Workers – Ensuring timely and secure salary disbursements to over 40,000 health extension workers, the majority of whom are women. These workers form the backbone of Ethiopia’s primary healthcare system, delivering essential medical services to communities across the country.
• Collection & Payment of Community-Based Health Insurance (CBHI) Premiums – Simplifying the CBHI users onboarding , premium payment process and the claim management process to increase coverage, accessibility and improved healthcare. Currently, over 15 million Ethiopians are enrolled in CBHI schemes, highlighting the need for a seamless and efficient payment system.
• Payments at Health Facilities – Enabling digital payments for medical services as part of Ethiopia’s electronic medical record (EMR) system. This enhances efficiency, reduces delays, and improves the patient experience.

© Desta Bayisa, Better Than Cash Alliance

The Service Level Agreement will see eight leading financial service providers engage in the nationwide pilot.

A Vision for the Future: The Road to NDPS 2.0

As Ethiopia prepares for the next phase of its digital transformation journey, NDPS 2.0, initiatives like the DHPI offer invaluable lessons for future advancements. The upcoming nationwide pilot will generate critical insights into digital payment adoption, particularly in rural communities. It will also assess the accessibility and effectiveness of these solutions for women, youth, and marginalized populations, ensuring that Ethiopia’s digital transformation is equitable and inclusive.

This milestone marks not just a step forward in digitizing health payments but a reaffirmation of Ethiopia’s commitment to leveraging digital innovation for better healthcare access. The long-term vision is to scale this initiative across all health facilities and regions, embedding responsible digital payments as the standard in Ethiopia’s health sector. With strong leadership from the MoH and committed financial sector stakeholders, Ethiopia is poised to harness digital solutions to transform lives, strengthen resilience, and build a healthier, more inclusive nation.