No Banking Services Without A Digital Id, Ethiopia Government Announces

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A new Ethiopian government policy mandating the use of the national digital ID, known as Fayda, for banking transactions has taken effect in the capital city, Addis Ababa, as of January 1, 2025.

The Fayda ID will now be essential for tasks such as opening bank accounts and linking existing accounts, as the government gradually rolls out the policy nationwide by December 31, 2026.

The policy’s implementation is being conducted in stages to allow citizens adequate time to acquire the Fayda ID. Currently effective in Addis Ababa, it will extend to major cities beginning July 1, 2025, with a nationwide rollout scheduled for January 1, 2026.

All existing bank account holders are required to link their accounts to their Fayda ID by the end of 2026. This phased approach is to ensure a smoother transition, particularly for citizens who have not yet registered for the digital ID.

Since its inception, the Fayda ID program has registered over 11 million citizens, a number expected to grow significantly in the coming years. Authorities view the policy as a vital component of Ethiopia’s broader effort to integrate digital IDs into various aspects of national life, making essential services more accessible to all.

The government, by incorporating Fayda into banking, aims to enhance customer verification processes, reduce fraud, and improve overall data security.

The Ethiopia ID Authority has emphasized that this policy aligns with international best practices in banking and financial services. The initiative is a joint effort between the National Bank of Ethiopia and the National ID Program (NIDP).

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The mandatory use of Fayda ID in banking is part of Ethiopia’s broader digital transformation agenda. The digital ID serves as a cornerstone of the nation’s five-year digital government strategy (2025-2030), which aims to modernize public services and infrastructure.

The strategy has garnered support from international organizations, including DT Global, an EU-funded consultancy, which has been instrumental in designing EthioConnect—a data exchange infrastructure vital for the initiative.

DT Global’s involvement includes mobilizing financial resources and drafting technical standards for the EthioConnect pilot project, which will serve as a backbone for data-driven governance.