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Smart Africa- developing our economies

Whilst still reeling from the news of increased taxes on internet usage, I continue to highlight success stories in the region, in the hope that this information will be considered by policy makers now or in the future. I will resist the temptation to succumb to the depressing thought that my voice will be relegated to a footnote in the history of the development of our country.

Whilst acknowledging the myriad hurdles we face in the region in developing an IT infrastructure, we must make note and learn from at least three of our African neighbours who are seeing a direct economic benefit to the country from adopting innovative policies to drive their local economies for the benefit of all. Nigeria, the world’s 26th biggest economy and the most populated nation in Africa has recognized that IT will play a large part in driving it to be the within the top 20 largest economies in the world.

The ICT sector currently contributes almost nine percent of GDP of the country. It is believed that by the year 2020, ICT revenues will exceed revenues from the petroleum sector in this oil producing country. Non voice usage is one of the bases for this growth. The strong deployment and widening of usage of affordable internet is seen as key to the country’s economic development as it allows easier and faster ways to communicate, transact and govern. In Kenya, robust IT policies has led to the ICT sector contributing 12.1 percent to the country’s economy in 2103 and it is still growing. The telecoms space and mobile money services are the largest contributors to this growth. M-Pesa, the leading telecoms mobile money service has more than 19 million users currently.

Finally to Rwanda, who have been on an admirable mission over the last few to drive the use of technology to develop their country. I have written about them often in this column, and I continue to believe that we can learn from their innovative and early adopter approach. Their approach in ICT is reflected in their policy statement: “Information and communication technology is a central engine to driving Rwanda’s transformation to a knowledge based economy, a fact Rwanda has acknowledged by allocating a budget to ICT – as a percentage of its GDP – that is at par with Organisation for Economic Co-operation and Development countries.”

The application of this government policy has led to Rwanda being ranked the top nation amongst development countries with affordable internet, as well as being re-elected to the Council of the influential International Telecommunications Union (ITU) for a further four years. What an amazing accolade for a country that only a few years ago was decimated by civil war and genocide.

Positive results of this approach is the increase of foreign direct investment to this sector to 45 percent of total country inflow, in direct competition with the sectors including trade, financial, mining and manufacturing.

Apart from growing investment in country, the direct economic result has been that the ICT sector in 2014 started contributing more to the GDP than agriculture and mining exports combined.

So, how do we learn from this and move forward not just in the short term? We start by lowering taxes, opening up spectrum and public-private partnerships to invest in infrastructure.

We encourage FDI by increasing our ratings in the “Ease of Doing Business” index published yearly by the World Bank. (We have recently dropped one place in this ranking to 164 out of 189 countries!) Businesses have an important role to play too. They need to work collaboratively with government and other players for the benefit of all – sharing infrastructure where appropriate and creating innovative business models and content that drive customer demand for the internet. At the end of the day development of this sector will only come from the far thinking and innovative leadership at government level.

 

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