East African countries put IT spending on back burner

By Edris Kisambira
Though East Africa as a region has been quick to adopt technology compared to other areas in Africa, Uganda, Kenya, Tanzania and Rwanda appear to have de-emphasized ICT in budget plans for the next 12 months.
The money allocated to different sectors by the governments of those nations, and the lack of mention of ICT in the spending blueprints for the coming year, seem to indicate that the countries are either slowing down investments in a sector they regard as key or are postponing further funding.
Uganda’s US$4.8 million ICT sector allocation is the lowest in the past three years, according to an analysis by the Collaboration on International ICT Policy for East and Southern Africa (CIPESA). The budget blueprints were reviewed by finance ministers on June 15. Looking at the Uganda allocation, the funding amounts to only 0.13 percent of projected government expenditures over the next 12 months. Uganda had spent $7.1 million last year and $5.7 million the year before that.
Ugandan Finance Minister Maria Kiwanuka said new technology was driving the country’s efforts to give more people access to financial- and business-related services, considering that telecom services like mobile money payments have registered more users today than commercial banks. Kiwanuka said the government, for example, will in the next 12 months establish a one-stop center to provide online registration services for the various licenses required to start a business.
Meanwhile the Rwanda government, taking notable strides in promoting ICT infrastructure investments and enabling usage by citizens in recent years, did not specifically provide for ICT spending for the next 12 months, and no explanation was given.
John Rwangombwa, Rwanda’s finance minister, said in the next 12 months, the government will help enhance operations of the Carnegie Mellon University in the country and the Kigali Techno Pole tech area to boost ICT for private sector development. Speaking in parliament on June 15, Rwangombwa reported completion of work on a number of investments in the past few years, including the national fiber-optic cable backbone, a wireless broadband system for the capital Kigali, a national data center and an embassy intranet.
Kenyan Finance Minister Robinson Njeru Githae did not say a lot in his budget speech as far as the ICT sector goes but allocated some $5.6 million for the purchase of computers for schools and removed import duty on computer software.
Tanzania, which has in the past allocated far less money in comparison to its neighbors, increased duty on mobile telephone airtime, taking it into a league that Uganda has long dominated, where telephone services are taxed steeply.
Tanzanian Finance Minister William Augustao Mgimwa announced a $2.5 million allocation to strengthen ICT “so as to improve access to various services including information, access to domestic and external market, revenue collection, health services, education, financial services, etc.”
Compared to Uganda’s allocation of $4.8 million and Kenya’s $5.6 million, the $2.5 million Tanzania allocated to the sector pales in comparison, given it also has been spending less in the recent past.
Commenting about the cutback in spending on ICT in Uganda, Godfrey Mutabazi, the executive director of industry regulator Uganda Communications Commission (UCC), said, “How do you expect the industry to grow when you are not investing back?”
Ashnah Kalemera, an analyst at CIPESA, said ICT is not a field that most governments in the East African region have great experience or competence in. “But also, ICT is a sector whose full benefit is yet to be fully appreciated by government bureaucrats, as indeed like most members of the public,” Kalemera said. “Its contribution is largely seen as indirect, and there is thus a need to have studies that show direct impacts of ICT on development if regional governments are to be convinced to significantly raise budgetary allocations to ICT.”
East Africa is a leader in adoption of mobile devices and, led by Kenya, in adoption of mobile money. Kenya’s teledensity is 71 percent, while both Tanzania and Uganda have passed the 50 percent mark. Millions across the region routinely use their mobile phones to make financial transactions, which in Kenya, Tanzania and Uganda total up to no less than $1.4 billion per month for all the three countries, with Safaricom’s M-Pesa accounting for the bulk of that money.
This article was published by Computer World on July 16, 2012