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Budgetary review CIO East Africa July 2012 Issue


Global economy
As the global economy sways like a tanker in high seas, I would like to imagine a domino player stacking domino chips evenly spaced on a straight line, each preferably representing a European country, starting with Greece and ending with the most stable Nordic country, then I would imagine if the first domino was pushed over depending on the prevailing global situation, they would all fall, with or without austerity measures.
Such a picture may be crude, but there is credence in it, according to the World Economic Outlook April 2012, published by the IMF, global economic growth is expected to constrict from 4 % in 2011, to about 3.5% in 2012, mainly due to the sliding pendulum oscillating between the meltdown in Europe and the momentous growth prevailing in some Asian economies, having said that the optimism is contagious in expecting 2013 to be generally more positive with a 4.1% estimated growth.
East Africa Community
While that is the case globally, the EAC seems to be progressing like a steam train without brakes towards consolidation of the customs union, the common markets and establishment of a monetary union. With hindsight we seem to have been immune to the happenings in Europe maybe because we are more economically linked with the emerging markets in Asia.
The EAC budget for 2012/2013 gives a lcear indication of the thought pattern of the partner states, for one, there was an enhanced appreciation of technology in terms of how delivery time can be reduced once one automates and networks, how consolidation and sharing of information can create transparency and empower people. For example in the aviation sector the Safety Oversight Facilitated Integration Application (SOFIA) project, will facilitate sharing of technical data by all partner states and enable the public to access some of the essential aviation data in the region. Same can be said of the Governmental Financial statics (GFS) coding system and the Budget Preparation Software that are noted in the budget.
Another important element in the budget is that $ 10.1 million was allocated to the Inter-University Council which will enhance support to universities on academic and networking systems and also strengthen university support in ICT application in areas of academic, research and other administrative functions.
The EAC budget is a good indicator of how the EAC is advancing and maturing towards a tighter symbiotic relationship between all the partner states, and at the same time it gives credence that to advance, technology has to play a critical role. 

The Kenya Vision 2030, aims to achieve “a globally competitive and prosperous newly industrializing, middle income nation by 2030”, and to get there are three key pillars; economic, social and political governance. Under the economic pillar, Kenya aims to offer business process off-shoring and IT enabled services globally. To do that competitively, there is need to develop the populace in the areas of science, technology and innovation; and provide a sustainable and cheaply accessible infrastructure to ensure that the services offered  are world class, and that security, transparency and accountability are prevalent.
To this end, the Kenyan budget 2012/13 had a number of items rife for the ICT subsector, which is under the Energy, Infrastructure  and Information Communications Technology (EI&ICT) sector, an enabler of sustained development. In it, Ksh. 7.2 billion was allocated to the Kenya ICT Board and all imported convertors of analogue to digital TV’s, and imported software were exempted from duty.
 In other fronts, measures were implemented to improve electronic filling of documents at the Lands registry, companies’ registry and other key agencies imperative for business registration. All this was done with the aim of positioning Kenya as a preferred investment destination.  
The challenges that still stifle Kenya as it strives to achieve Vision 2030 is inadequate capacity for research, lack of local infrastructure development capacity, which tend to go hand in hand with the Education sector, where there is slow ICT integration  and adaptation and inadequate infrastructure and staffing. The Kenyan government hopes that Public Private Partnerships will assist in the delivery of public infrastructure and social services.
At the end of the day, the ICT subsector objectives is to provide a knowledge based society, and to ensure the availability of accessible, efficient, reliable and affordable ICT services in Kenya.
Other elements in the budget that also need mention include, in the education sector, a national ICT Innovation and Integration Centre was established; which aims to provide increased integration of ICT in education, funds for computers  for schools were also availed, due to low usage of ICT and the need to provision ICT infrastructure at all levels. In the Public administration and international relations sector, funding was also allocated to enhance ICT capacity and infrastructure, by funding the extension of the fiber optic to the counties.

There were other requests that were placed in the budget but considered as potential sources of fiscal risks and could be financed “during finalization of detailed ministerial spending plans if savings are identified and resource envelope firmed up”. Of interest is the Konza ICT Techno Polis - Construction and civil works budget of Ksh. 400 million.


As Uganda strives to cut down on the number of business licenses required to start or run a business, a Business Licensing Reform Committee (BLRC) was set up and its report published in March 2012, the issues  raised were identical to what is experience in other East Africa countries; things like a lack of coordination between government agencies and insufficient ICT solutions to integrate and streamline administrative processes which is a great hindrance to efficient regulation of business.  A majority of regulatory bodies if electronically setup, are not linked together, to allow the smooth flow of information across departmental borders.

The prominent recommendation of this report was to create a business one stop shop by integrating and automating all business registration processes, which would reduce time and costs associated with starting and running business. To achieve this ICT tools were to be employed.

If you align this with the Ugandan National Development Plan (NDP) 2010/11 – 2014/15, whose vision it is to transform the Ugandan society from a peasant to a modern and prosperous society within 30 years. There is a lot that will need to be done around the low application of science and technology, gender issues, negative attitude, cultural practices and perceptions and also empower the population to have more skilled workers.

It is clear that to achieve the NDP, there is more that needs to be done in terms of promoting science, technology, innovation and ICT to enhance competitiveness in the global scene.

If you look at an Egg analogy depicted in the NDP, one of the primary growth sectors for the Ugandan economy is ICT business, layered with complimentary, social services and other enabling sectors in an overlapping manner.

The Ugandan budget was a whopping 10,885 billion Uganda Shillings, of which only 15.63 billion (inclusive of donor projects) was placed under ICT.

According to The Background to the Budget 2012/13 Fiscal Year, published by the Ugandan Ministry of Finance, Planning and Economic Development,   over the course of FY2012/13 and the medium term, the priority actions that the Ugandan government will undertake include:
a)       capacity building for the use of ICT within government;
b)       implementation of analogue to digital migration;
c)        development of an IT data collection, analysis, reporting and dissemination framework and tool;
d)       operationalising the Cyber laws;
e)       extension of the NBI/EGI Infrastructure (Phase III);
f)        commercialization of the NBI using a PPP model;
g)       development of an alternative route to the sea cable (Optical Fibre Optic Cable to Mutukula);
h)       developing, designing and piloting a District Business Information Centres (DBICs) model and strategy;
i)         development and dissemination of BPO operations standards; and
j)         setting up Information Technology parks to host BPO and related ICT service companies


The Tanzanian government started the development of the Tanzania Development Vision 2025 back in 1995, with the intent of having attained a high quality of life; peace, tranquility and national unity; good governance; an educated society imbued with an ambition to develop; and an economy which is competitive with sustained growth for the benefit of all people by the year 2025.

In the development vision it is noted that, “micro-electronic ICT are central to competitive social and economic transformation. They are a major driving force for the realization of the vision. However, appropriate skills and capabilities need to be put in place, which requires adequate investments are made to improve the quality of science based education and create a knowledge society”.

With this in mind, the Tanzania budget 2012/13 was eventful, in his maiden speech honorable Dr. William Mgimwas, proposed to spend a budget of TZs 15,119.6 billion.  Of specific note is that he recommended to under HS Code 8523.80.00 in order to apply the CET rate of 0 percent on software instead of 25 percent. The measure was intended to encourage development of ICT in the region and contribute to the economic growth. In the same breath,  Tshs. 4 billion was allocated to ICT to strengthen communication through 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.

A total of TShs 128.4 billion was allocated in part to ICT to improve the business environment and allocate specific areas for investments in urban and rural areas and promote partnerships between public and private sectors. Similar to what was done in Kenya Set Top boxes were zero rated under the HS Code 8528.71.0. The measure is intended to facilitate the smooth transition of the EAC Partner States to move from analog to digital technology by December 2015.


Rwanda is an example that needs to be emulated, mainly because of the intensity and vigor with which they embraced the Rwanda Vision 2020, and realized that to move forth they had to embrace ICT.  And not just that, but they have been adopting a National Information and Communication Infrastructure Plan (NICI) process, which has seen them go through three five year rolling plans NICI I(NICI-2005 Plan), NICI II(NICI-2010 Plan) and NICI III(NICI-2015 Plan).  The plans are very detailed in terms of how they aim to become a knowledge based society by 2020. The plans also emphasize the budgetary costs that define how annually the strategy will be achieved. 

The Rwandan budget was set at RwF 1,385.3, and the total spend on ICT was higher than the average in other east African economies.

In conclusion, according to the Global Information Technology (generated by the World Economic Forum in collaboration with INSEAD, which was developed to measure the degree to which economies across the world leverage ICT for increased competitiveness, East Africa countries still have a long way to go, their individual Networked Readiness Index (NRI) are;   Rwanda 82, Kenya 93, Uganda 110 and Tanzania 123

I  recommend that time is invested in studying the NRI and its essential pillars which will allow us on an annual basis to cumulatively become more competitive in the global market as East African countries.

Article done for CIO East Africa July 2012 Issue



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