Bridging the digital divide-Not in Malawi?
Again, this week, I have to start my column with some sad news. The introduction of 10 percent tax on internet, SMS and data services by our government. Really?
Malawian businesses and individuals are currently struggling with existing mobile and internet costs that are the highest in sub Saharan Africa – and some say in the world. As a result of cumulative increased internet services in the last decade we have been able to improve the quality of life in this country, and drive growth by a number of initiatives – not least mobile banking and ATM services, which benefits the mainly unbanked communities.
People are able to communicate more effectively across the country on issues such as commodity prices and family matters. Businesses are able to achieve efficiencies and reduce paper costs by transacting business via the internet. Internet banking is becoming the norm, reducing the need for visits to banks by staff several times a day.
Initiatives are in place to improve education offerings through e-learning products. The internet has opened up Malawi tourism to the world. The internet was instrumental in collecting and providing support and supplies to people stripped of all their dignity and possessions following the floods that occurred earlier in the year.
I have no doubt that many lives were saved through this technology during this time. These are NOT luxuries, our banking, education and civic awareness needs are extremely high, amongst others. And only last week, Mark Zuckerberg, recognizing the importance of disseminating information through the internet, launched a free Facebook based service in Malawi via the local mobile operators, which includes free access to information on issues such as Ebola, health, education and women empowerment.
Firstly, increasing charges on SMS services seems illogical and pointless. Although it will affect those in the lowest income group who cannot afford smartphones – I believe it will very soon become a defunct technology (like floppy disks), due to the increased adoption of data messaging such as WhatsApp.
As I previously wrote, WhatsApp messages exceeded SMS messages globally for the first time this year, and mobile operators are scrambling to put into place infrastructure that will allow them a bigger share of the data services market. I guess in Malawi, this will only speed up the death of this service. I cannot see any substantial increase in revenues to government on this.
Taxing data services is a totally regressive step, and once again increases the digital divide. In my limited understanding, taxes are meant to be taken from those who have in society, to benefit those who have not?
Perhaps, the internet is perceived as a luxury for people. All around us, we watch our neighbours increase access of information to their people by investing in IT infrastructure and even the provision of free internet. They are clearly aware of the benefits to their economy and the quality of life of their people and commit to a long term strategy to raise their country to the level where it can join the global village.
With regard to the majority of Malawians living below the poverty line, this is the equivalent of denying access of information to them. It also isolates them from any improvement in areas such as banking and rural service provision. For SMEs in Malawi, this is a hurdle to their growth and a curtailment of online research and development issues.
For large corporates such as banks and financial services, unless they seek to absorb these costs themselves, which is doubtful, this will mean a reduced take up of their online services and increased overhead costs dealing with customers having to visit on site.
I do hope my voice will be heard amongst the clamour raised by this news and lead to a re-think of this “lose-lose” situation Malawi has been put in by this taxation decision.
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