Boost in Uganda GDP growth from government’s digital economy plans

January 19, 2015

Uganda Government investment on preparing for the digital economy would directly contribute to the expansion of the economy this year and help support the growth of other economic engines – investment, government spending, exports and tourism, when it is fully implemented as planned, according to an expert I recently had a chinwag.He cited World Bank studies have shown that a country’s gross domestic product could expand by 1.6 per cent if Internet broadband users in that country increased by 8-12 per cent. The Uganda government’s plan to continue investing on hard infrastructure such as national broadband and other soft and service infrastructure would increase internet broadband users and government spending, which would eventually contribute to the expansion of the economy. Internet broadband penetration in Uganda is less than 10 per cent of households. The country has more than six million Internet users, close to 900,000 Facebook users.

There are two perspectives to the digital economy that can help with the expansion of the Ugandan economy. The first is the expected government spending for hard and soft infrastructure, which would increase capital in the economic system through the increase of capital spending. The other options works well when the county has established good broadband connectivity,through the increase of business output in each industry. For example, Uganda manufacturing sector could expand faster if there was good Internet connectivity since the internal system of businesses would be more effective. This is because they can use information technology to create programs and sensors to save energy use in the production process and that would contribute to lower energy costs in country that is seriously investing in energy with Karuma power project and other ongoing projects being some of the primary examples of the country’s commitment to the sector.Firms in Uganda can use the money that they have saved to invest on the development of their companies.

Uganda tourism industry can also expect more visitors if there is better Internet linkage and connectivity since visitors can gain better access to tourist information such as the locations of restaurants and hotels. It would also help with the promotion of products and services. Better connected government agencies and the recently rolled out one-stop government service idea, which is part of the digital economy concept, would reduce the time spent on dealing with government regulations in a country whose population is now estimated at 35 million people. The private sector would find it easier to do business if it could gain better access to government agencies. This could also attract more foreign businesses to invest in Uganda if the ease of doing business here has increased.The digital economy would also help industries cut costs.Recently, the Uganda Government announced that acquiring business permits would be faster, easier and more transparent while e-commerce could provide another market channel for businesses.In terms of exports, recently implemented single window by Uganda Revenue Authority will allow greater access to information such as the tax payment process and import regulations in the country and across the East African Community countries.

It would no doubt make things clearer and faster in terms of logistics and packaging. Ugandan government must continue developing the digital economy concept for it to be fully realized since countries that have successfully implemented the concept have been developing their digital economy concept for years but are still working on improving them. The reality is that Digital economy development requires continuity in projects and policy in order to build on the success of each stage.If Uganda work on it continuously, the country will see major differences within four to five years. ’Pearl of Africa’ current trend is the wave of transformation into the digital economy and the country should look to the Western World models and find out what they have done successfully and analyse what are their strengths and weaknesses. Impressively, the ICT Ministry in Uganda just like their East African Community counterparts plans has drawn up regulations governing electronic transactions, computer crimes, cybersecurity, data privacy, digital economic activities and ICT industry promotion.

Contador Harrison