ICT Strategic Investment for Development
The exponential growth in the use of Information and Communication Technology (ICT), both globally and at home, presents major prospects for Tanzania to competitively participate in the global economy. Tanzania has an opportunity to increase investment in the sector towards accelerated growth and reaching its goal to become a middle income economy by 2025.
ICT’s dynamic role in developing countries makes clear the argument for strategic investment and regulation in the sector. The rise of Industry 4.0, characterized by ubiquitous digitization and connectivity of process, devices and people, has enabled developing economies such as China and India to compete at all stages of the manufacturing value chain, contrary to the past where the focus was on outsourcing labor intensive activities for low cost.
In addition, the mainstreaming of technology disrupters such as analytics, mobile, smart systems, social media, cloud computing and more hold great potential to accelerate development by empowering communities. Various studies have shown a strong correlation between ICT investment and socio economic development.
A World Bank study for example found that a 10% increase in high-speed internet connections results in 1.38% economic growth (Gross Domestic Product - GDP). ICT contribution to the economy can also be seen in the form of labour productivity gains with studies showing increased output per unit input for firms investing in ICT. ICT enables productivity and innovation across industries by facilitating availability of information, automating production, increasing competition, enabling financial inclusion, facilitating fair trade, and stimulating entrepreneurship.
Tanzania’s Five Year Development Plan (FYDP) II 2016 / 2020 (in line with Vision 2025) identifies key drivers required to make the “industrial jump” to the required growth trajectory (7% - 12% GDP growth) to achieve middle income status, including investment in infrastructure, industry and trade. The plan also identifies technology and innovation as key drivers to sustain the growth.
While FYDP II does not define contribution targets for ICT, it identifies a target to increase expenditure in Science, Technology and Innovation (STI) from 0.71% to 1.5% by 2025. Given the potential of ICT to transform the economy, a strategic investment and regulation must be made to achieve this jump. Specifically, this should start by focusing on 3 key areas:
1) Increase Connectivity
2) Develop ICT Skills
3) Promote Innovation
While the country has made some strides in ICT, particularly around connectivity, it is high time for the sector to play a much larger role to enable industrialization and development in Tanzania and help the country leapfrog to its 2025 goal.
