ICT Can Be Too Expensive

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By Kuvee Kangueehi Windhoek The high cost of Information Communication Technology (ICT) is seriously hampering the development of small and medium enterprises (SMEs) in many African countries including Namibia. This is contained in research done by Nepru and Research ICT Africa on the impact of ICTs on private sector development and how ICTs can contribute to a vibrant SME sector as well as economic growth in the context of developing countries. Dr Christoph Stork who was the director of the research in Namibia said the cost of ICT facilities such as the Internet, cell phones and telephones are too high in Namibia and thus the usage of ICT is under-explored. Stock said the research has shown that in countries where ICT costs are lower, the SMEs used the services more and businesses performed better. He noted that many SMEs in Namibia such as hair salons, panel-beaters and shebeens do not use ICT facilities whereas their counterparts in neighbouring countries like Botswana make more use of the facilities. He noted that many SME owners in Namibia have realized that not using ICT facilities is more profitable but it does not allow the business to grow. He added that stagnation in the growth of the SME sector in Namibia can have serious negative effects because the sector contributes 12 percent to the gross domestic product (GDP) and the importance of SMEs is reflected in the NDP 2 and Vision 2030 documents. “The SME sector currently employs 20 percent of the country’s workforce and its contribution to economic growth and employment is expected to increase further.” Stork said that while Namibia has a higher population than Botswana, the latter has more cell phone subscribers. He said Botswana has over 800 000 subscribers, while Namibia only reached the 500 000 mark a few months ago. The researcher observed that ICT costs cheaper in Botswana because of the variety of providers and the higher number of subscribers. Stork was however optimistic that with PowerCom and Telecom through its new product Switch coming on board, the prices of ICT facilities are likely to go down. Stork also explained that the objective of the research was to look at the impact of ICTs on economic growth and employment creation from the demand/user side. “It was to identify obstacles to ICT usage that SMEs face in their daily business activities.” He added that following the outcome of the research, they will provide guidance in the formulation of policy that will induce economic growth and employment. Stork said they chose the SME sector because it is a sector in which most of the world’s poor are working and the sector exceeds the average economic growth of national economies in many developing countries. The countries covered in the research include Botswana, Cameroon, Ethiopia, Ghana, Kenya, Mozambique, Namibia, Nigeria, Rwanda, South Africa, Tanzania, Uganda, Zambia and Zimbabwe. A book on the outcome of the research was also launched yesterday.