ICT role in country development

Source: World bank

Information and communication technologies (ICT) are no longer a luxury for developing countries and they are already creating new ways of communicating, doing business, and delivering services. Through extending access and use of ICTs, the World Bank aims to stimulate sustainable economic growth, improve service delivery, and promote good governance and social accountability.

Context

Technological progress is a considerable driving force behind economic growth. ICT infrastructure in particular has attracted much investment, and generated significant fiscal revenues and employment opportunities in developing countries. The number of mobile phone subscriptions in developing countries has increased from 200 million in 2000 to 3.7 billion in 2010, and the number of Internet users has grown more than tenfold.

With Internet penetration at a turning point including in the least connected region, Africa, and with 70 percent of the population in developing countries having access to fixed or mobile telephone services, ICT networks now constitute a far-reaching service delivery and citizen participation platform. ICTs can be used as a vehicle to increase accountability, and can transform and extend the reach of service delivery to the underserved in an innovative, fast, and cost-efficient manner.

Key remaining challenges and opportunities for developing countries include:

• improving affordability in order to reach the one-third of the population of the poorest countries who currently live beyond the ICT networks;
• widening access to more advanced ICT services such as broadband for high-speed internet;
• leveraging the new ICT infrastructure to improve the delivery of services and to build on it as a source of economic growth; and
• developing and aligning people skills relevant to the Information Technology-enabled Services (ITeS) industries and knowledge economy.

World Bank Role

Since its inception, the World Bank has supported more than 100 developing countries with investments and technical assistance in ICT. Since 2003, it has committed over US$1.3 billion for investment in standalone ICT projects, including US$776 million from the International Development Association. The Bank’s investments have helped to attract over US$30 billion in private sector investments in ICT in low-income countries from 1997-2007.

In addition, the World Bank supports IT components in lending projects across other sectors, such as education, health, and public sector management. In a 2006 study, this figure was estimated to be US$7.3 billion in some 1,700 active projects under preparation or implementation.

The World Bank has disbursed US$45 million on analytical work and technical assistance in the ICT sector since 2000.

Strategy

World Bank support is evolving to reflect the new challenges and opportunities of the sector. The Bank Group’s new ICT Sector Strategy will focus on three pillars:

CONNECT: Information and communication infrastructure focusing on broadband development

INNOVATE: Information Technology (IT)-enabled industry and ICT skills development

TRANSFORM: Use of ICT applications in specific sectors and contexts (e.g. agriculture, education, health, good governance, and social accountability)

Technical assistance and investment operations are increasingly focusing on:

• CONNECT: Financing broadband infrastructure: The World Bank recently stepped up its financing of innovative public-private partnerships (PPPs) as catalytic vehicles to attract additional private sector investment in broadband infrastructure. This includes regional communications infrastructure programs to accelerate the rollout of terrestrial backbone networks and submarine cable systems in Africa, Pacific Islands and the Caribbean.
• INNOVATE: Supporting the growth of the ITeS industry: Such support helps develop and align people skills relevant to the ITeS industries and knowledge economy. It includes a small but growing portfolio of IT industry development projects in Armenia, Bhutan, Ghana, Kenya, Mexico, and Nigeria.
• TRANSFORM: Using ICT to improve the delivery of public services: The World Bank is supporting US$7.3 billion of ICT components in projects across other sectors, such as education, health and public sector management, as determined by a study in 2006. Components include integrated financial management information systems, computers in schools and universities, digitization of high court proceedings, and electronic land titling. This assessment covered 1,700 projects under implementation or preparation across the Bank portfolio and through standalone projects such as the eGhana (US$84.7 million), eRwanda (US$10 million), and eBenin (US$15 million) projects.

Results

Afghanistan: Increasing Access and Affordability through Telecommunications Sector Reform

In Afghanistan, a US$22 million International Development Association (IDA) credit supported sector reform that made the telecommunications market more competitive. It has attracted over US$1.2 billion in private investments, improving access to ICT services and reducing prices. This helped increase the number of telephone subscribers from 57,000 to 13.4 million between 2002 and 2010, and reduce costs from US$2 a minute to 10 US cents a minute. The Afghan telecommunications sector now contributes an estimated US$75 million in taxes annually. (Project details)

East Africa: IDA and IFC Support to Communications Infrastructure in East Africa

The IDA-supported Regional Communications Infrastructure Program (FY07-FY13) and IFC co-financed Eastern Africa Submarine Cable System (EASSy) illustrate a joint World Bank Group approach to regional infrastructure development.

The first is a US$424 million program that supports the development of telecommunications terrestrial networks through financing of public-private partnerships and broadband capacity purchases.

The second is a US$240 million submarine cable connecting the east coast of Africa (from South Africa to Sudan) to Asia and Europe. These projects have contributed to a 90 percent reduction in wholesale capacity prices in East Africa, with retail prices already starting to drop by about one-third in Kenya and Rwanda. In Kenya, this has helped in increasing the number of internet users to 8 million in 2010 from 2 million in 2007. (Project details)

Ghana: Innovative Project Design through e-Government PPPs in e-Ghana

The e-Ghana Project (FY07-FY12, IDA) has an innovative design featuring a public-private partnership (PPP) to transform revenue collection, using a joint venture between Government revenue agencies and a private sector partner. The project has helped the Government attract US$40 million in private sector investment for developing and deploying an electronic tax application to automate revenue agencies and the Registrar General’s Department. Upon completion, this application is expected to help the Government increase compliance and transparency, and broaden the tax base, while reducing the incidence of fraud, upgrading Government employee skills, and developing a template for upgrading other agencies.

The eGhana project is providing support to the local IT-enabled services (ITeS) industry including support to develop a Business Process Outsourcing Facility. Over 1,000 jobs have been created in the industry during the last two years. The eGhana Project is also providing financial assistance to support a partnership between the public and private sector to train some 50 training institutions and 6,000 business process outsourcing agents. This is expected to further strengthen Ghana’s position as one of the most attractive locations for ITeS business in Africa. (Project details)

Mexico: Skills Development for Improved Employability in the ITeS Industry

Through the Mexico IT Industry Development Project (FY09-FY13, US$80 million, IBRD), the World Bank has assisted the Government of Mexico in the creation of MexicoFIRST, an institution aimed at closing the gap between demand and supply of skilled workers in the ever-changing IT industry. Through partnerships with global companies and strong links to local IT clusters, academia, and industry associations, MexicoFIRST provides certification programs that increase the quality of the Mexican labor pool. Students pay between 10 and 40 percent of the certification prices, making it more affordable.

As of 2010, more than 6,000 people have been trained and certified in skills that will qualify them for employment with higher salaries. It is expected that more than 30,000 people will be certified by the end of the project. (Project details)

Nicaragua: Extending Telecommunications Service to Unserved Rural Areas

In Nicaragua, a US$16 million project supported the strengthening of the regulator, privatization of the incumbent telephone operator in 2001, and introduction of competition in the sector in 2005. It helped bring about a ten-fold increase in mobile subscriptions by 2010. Total telephone penetration (fixed plus mobile) increased from 6 percent in 2001 to 25 percent in 2005, and to over 60 percent in 2008.

Thanks to a US$10 million follow-up project, to which IDA contributed US$7 million, more than 350,000 people in 350 communities in rural Nicaragua received access to telephone services and more than 860,000 people in 104 rural municipal towns received Internet connection for the first time. One hundred public Internet access centers were installed by the project for the benefit of those who could not afford to have direct access in their homes. They pay a modest hourly fee for using Internet access and receive free training for using the service, as well as for basic computer tasks. (Project details)

Rwanda: Bringing Public Services to the Fingertips of Citizens

In Rwanda, the eRwanda project (US$10 million IDA grant) supports the government’s efforts to use ICT for improving service delivery. The project has funded networks in government ministries and district offices around the country, and the development of a government portal linking government information and websites. The project also financed 18 telecenters for rural populations and equipped 12 district offices with computers and office software, allowing the local government offices to be connected to Kigali’s central government. Additionally, four ICT buses funded by the project have been roaming among Rwanda’s district offices, teaching ICT skills to youths, civil servants, farmers, politicians and private sector entrepreneurs.

Throughout the project, 2,822 citizens were trained on ICT subjects, helping them gain skills that will serve them throughout their lifetimes as employees, entrepreneurs, and local leaders, including 760 district office staff. eRwanda also had a strong gender focus and among the trainees were 685 council women in rural areas. (Project details)

ALAIN PATRICK NDENGERA