Trade in Information & Communication Services: Opportunities for East & Southern Africa
Uganda Case Study
A World Bank project carried out by Telecommunications Management Group, Inc.
October 3, 2007
Trade in Information and Communication Services: Uganda Case Study
Contents
Background ICT Competitiveness ICT and Trade ICT and WTO
Trade in Information and Communication Services: Uganda Case Study
Background A World Bank project to analyze opportunities for ICT-related trade for six East and Southern African nations: Ethiopia Kenya Rwanda Sudan Tanzania Uganda
Trade in Information and Communication Services: Uganda Case Study
ICT-related trade
Around 300 million minutes of incoming international calls (UCC, 2007)
US$ 5.7 million of Computer & Information services exports
ICT trade (e.g., international phone calls, surfing overseas web sites, e-mail)
(Bank of Uganda 2003/04)
ICT-enabled trade (e.g., call centers, data processing, etc., for overseas clients)
US$ 17 million in communication services exports
(Bank of Uganda, 2003/04)
11 % of Ugandan firms using website to interact with Buyers/ Suppliers/ Customers (World Bank 2006)
ICT-facilitated trade (e.g., exporter using website for product sales)
Trade in Information and Communication Services: Uganda Case Study
ICT-ENABLED SERVICES – WHY IS IT IMPORTANT? Government
Enhances economy, investment, and employment
Academia
Provides new curriculum and academic programs and new job opportunities to graduates
Industry
Fosters development of new domestic and foreign companies and enhances opportunities for existing industries
Citizens
Provides new job opportunities for citizens with multiple levels of experience (e.g., secondary schooling and more advanced training)
Trade in Information and Communication Services: Uganda Case Study
ICT COMPETITIVENESS ICT-competitiveness refers to a country’s capability to exploit information and communication technology in order to effectively participate in the global information economy
Business Environment
ICT Infrastructure
ICT Competitiveness
Human Resources
ICT Laws
Trade in Information and Communication Services: Uganda Case Study
…but little wait
Low penetration…
Delays in obtaining a fixed line (days)
2003
2004
2005
Ethiopia (2002)
Kenya (2003)
Rwanda (2006) $8
$13
$15
Kenya
$2
$9
$13
Uganda
2002
155
Tanzania
44%
$6
Rwanda
93%
SSA
82%
Ethiopia
2001
62
Monthly basket, US$, 2007
Sudan
Faults cleared by next day
40%
58
…but expensive
Good quality… 70%
99
SSA
Sudan
13
23 Tanzania (2006)
1.7
Uganda (2006)
1.8
SSA
Uganda
1.0
Ethiopia
0.5
0.9
Kenya
0.3
0.4 Tanzania
Main lines (per 100 people), 2006
Rwanda
Source: TMG, Inc. adapted from UCC, UTL & “Doing Business”.
Fixed line metrics
Trade in Information and Communication Services: Uganda Case Study
International voice 1-minute peak rate call to USA, US$, 2007
VoIP
$0.60 $0.49 $0.45 $0.44
Sudan
Rwanda
Uganda
Kenya
$0.22
$0.28
Tanzania
$1.08
Ethiopia
Uganda’s international voice tariffs within average range of Study Countries Importance of VoIP for call centers
Trade in Information and Communication Services: Uganda Case Study
Mobile metrics …good coverage
Relatively competitive…
3,768
Tanzania
96 Uganda
4,130
Sudan
92 Kenya
5,236
Uganda
82 Rwanda
6,089
Kenya
Mobile subscribers (per 100 people), 2006 3.0
8.4
10.5 12.5 14.1
Ethiopia
Ethiopia
Rwanda
Uganda
Sudan
21.4 Kenya
1.2
Tanzania
$4
SSA*
$5 Sudan
Tanzania
Uganda
60 Sudan
9,059
Rwanda Kenya
56
…relatively low access
Monthly basket, US$, 2007 $10 $12 $11 $9 Rwanda
Ethiopia
10,000
Ethiopia
Average price…
15
Tanzania
Mobile coverage (% population), 2006
HHI, 2006
Trade in Information and Communication Services: Uganda Case Study
Internet metrics …average bandwidth
Reasonably competitive…
Bits per person, 2006 22
Kenya
…average access 3.7
3.8
8.2
Uganda
Sudan
Kenya
1.0
2.2 Rwanda
0.4
Tanzania
Internet users (per 100 people), 2006
Ethiopia
Sudan
Rwanda
Kenya
Tanzania
Uganda
Ethiopia
ADSL prices, 256 kbps, US$, 2007 $354 $300 $256 $101 $48
10 Sudan
Tanzania
Expensive…
9 Uganda
3
6 Rwanda
1 Ethiopia
2.1
Kenya
Tanzania
Uganda
Sudan
Rwanda
Ethiopia
People per ISP, millions, 2006 75 2.3 2.3 4.5 3.6
Trade in Information and Communication Services: Uganda Case Study
Proposed East African undersea fiber optic cable systems Name
Cost (US$ million)
EASSy
235
Kenya, Tanzania, Sudan, others Supply contract signed 3/07
TEAMS
100
Kenya, UAE
Governments of Kenya and UAE.
SEACOM
300
Kenya, Madagascar, Mozambique, South Africa, Tanzania
Herakles Telecom is leading the project
Kenya, Madagascar, Mauritius, Mozambique, South Africa, Tanzania
Spearheaded by Reliance.
FLAG NGN System 2
1,500
Landing points
Note
(Reliance’s investment for connecting four regions around the world)
Trade in Information and Communication Services: Uganda Case Study
Computer market-Services Computer services revenue As % of GDP, 2005 0.55% 0.44%
Kenya
Tanzania
0.36%
Uganda
0.33%
Ethiopia
According to one source, there were around 150 registered firms in the sector in 2002. Computer software and services revenue were estimated at US$ 37 million in 2005, 0.36% of GDP. A survey found that 17 Ugandan ICT firms were providing ICT export-oriented services such as call centers, software development, training, website design, data processing and consultancy.
Source: Adapted from BMI-T, 2006.
Trade in Information and Communication Services: Uganda Case Study
Computer market-Hardware Some 28,000 computers were sold in Uganda in 2005 and by the end of 2005, penetration of computers was estimated at 0.61 per 100 inhabitants, just below the average of 0.65 in the Study Countries. No local manufacturing of computers; however, computer assembly has grown in Uganda due to the elimination of tariffs on parts and reportedly some are even exported to other East African nations.
Imports of office machines & automatic data processing machines, US$ millions
$50
$21
2001
$38
$37
2003
2004
$25
2002
Source: UBOS.
2005
Trade in Information and Communication Services: Uganda Case Study
ICT sector contribution to GDP Telecom revenue as % of GDP, 2005
4.2% 4.8% 4.1% 4.3%
Source: BoU.
3.4%
3.4% 2.7%
2.5% 1.6%
2004
2005
Kenya
2003
Sudan
2002
Tanzania
2001
Uganda
2000
Rwanda
1.0%
1.3%
Ethiopia
1.8%
Source: TMG, Inc. estimates.
Communications sector as % of GDP, Uganda
Trade in Information and Communication Services: Uganda Case Study
ICT sector-Trade Services exports (excluding travel & transport), US$ million
Office & telecom equipment imports, US$ millions $120
$100 $81
$90
$84
$62
$67 $53
$13
2000 2001 2002 2003 2004
2002
Source: WTO.
2003
2004
2005
Trade in Information and Communication Services: Uganda Case Study
ICT Institutions Ministry of Information and Communications Technology Uganda Communications Commission National Information Technology Authority (to be established)
Trade in Information and Communication Services: Uganda Case Study
ICT REGULATORY AND POLICY FRAMEWORK Most key policy, laws and regulations are in place Uganda Communications Act of 1997 National ICT Policy, 2003 Various supporting Regulations, 2005
Lack of data protection and e-commerce laws, although bills have been drafted Liberalized telecommunications market Generic telecommunications licensing framework that is flexible & technology neutral
Trade in Information and Communication Services: Uganda Case Study
BUSINESS ENVIRONMENT Electricity Taxes % of firms identifying problem as main obstacle 64 Foreign investment Uganda Africa Governance 37 “Doing Business” 11
Electricity
11
Tax rates
8
8
Anticompetitive / informal practices
15 7 Access to finance
3
4
Transport
3
4
Corruption
Source: World Bank, Enterprise Surveys: Uganda, 2006
1
2
Business permits
Trade in Information and Communication Services: Uganda Case Study
Electricity Electricity a “Major” or “Severe” Obstacle
Days to Obtain an Electrical Connection
Owns or Shares a Generator
Electricity from Generator
Rwanda (2006)
32%
18
58%
30%
Ethiopia (2002)
42%
116
17%
2%
Uganda (2003)
43%
39
36%
7%
Kenya (2003)
47%
51
71%
15%
Tanzania (2003)
58%
55
Source: The World Bank Enterprise Surveys.
www.enterprisesurveys.org
55%
12%
Trade in Information and Communication Services: Uganda Case Study
Taxes Uganda has eliminated virtually all ICT equipment import duties (remaining duties basically on wired telecom equipment). Uganda’s import duties less than East African Community Customs Union in most cases. Excise taxes on communications services are a barrier to greater use and have a detrimental impact on the economy. Uganda has highest mobile excise tax in East Africa and also charges excise on fixed calls. Uganda’s VAT (18%) is between Kenya (16%) and Tanzania (20%).
Import duties, 2006 Uganda
EACCU
Computers
0%
0%
Computer parts
0%
10%
Mobile handsets
0%
25%
Wireline equipment
10%
10%
Trade in Information and Communication Services: Uganda Case Study
Foreign investment Favorable foreign investment scheme 100% foreign investment possible Incentives and support from Uganda Investment Authority
Trade in Information and Communication Services: Uganda Case Study
Governance Rule of Law
Control of Corruption
0 -1 -2 -3 -4 -5
Ethiopia
Kenya
Rwanda
Sudan
Tanzania
Uganda
27
15
18
45
14
25
Ibrahim Index of African Governance rank
Source: World Bank, Worldwide Governance Indicators info.worldbank.org/governance/wgi2007
Political Stability
Trade in Information and Communication Services: Uganda Case Study
Doing Business Enforcing Contracts
Trading Across Borders
Protecting Investors
Registering Property
Employing Workers
Dealing with Licenses
Rank
Starting a Business
Economy Kenya
83
111
24
68
115
60
145
67
Ethiopia
97
95
59
79
146
118
149
82
Uganda
107
107
110
8
166
60
160
71
157
99
67
65
Source: World Bank, “Doing Business” (2006) 142 127 172 143 Tanzania www.doingbusiness.org
Sudan
154
82
92
164
29
142
165
158
Rwanda
158
58
133
106
134
162
175
69
Trade in Information and Communication Services: Uganda Case Study
UNDP Education Index 2006 0.61
0.62
0.67
0.69
0.53
“Uganda’s cheap, trainable and English-speaking workforce can be turned into a cadre of skilled ICT technocrats to provide the necessary human resources for ICT growth.”—UNCTAD, ICC “AN INVESTMENT GUIDE TO UGANDA”
0.40
Kenya
Uganda
Tanzania
Rwanda
Sudan
Ethiopia
% of firms identifying labor skill shortage as major constraint 2006
Based on weighted average of literacy and combined gross school enrolment ratio.
17%
10%
Uganda
Africa
Source: World Bank
Source: UNDP Human Development Report 2006 http://hdr.undp.org
Human resources – Education / Skills
Trade in Information and Communication Services: Uganda Case Study
Human resources - Language skills
Ethiopia
Rwanda
Uganda
205
229
Kenya
203
227 210
Tanzania
Sudan
195
Source: Educational Testing Service (ETS) www.ets.org/toefl
“From an ICT services perspective…certain skills are a necessary condition to compete in the services outsourcing business… Language skills are also often mentioned as important in choosing locations…TOEFL test scores are often taken as an indicator of skills…” —OECD
TOEFL Average Score July 2005-June 2006
TOEFL=Test of English as a Foreign Language
Trade in Information and Communication Services: Uganda Case Study
$2,729
$1,037
Source: IMF.
Tanzania
Sudan
$334
Uganda
Rwanda
Ethiopia
Sudan
Africa
Uganda
Rwanda
Note: PPP = Purchasing Power Parity.
$260
$316
Kenya
$681
$1,626
$1,406
$1,341
$1,044 Ethiopia
GDP per capita, US$,2006
$177 Kenya
$801 Tanzania
GDP per capita, PPP, International US$, 2006
$2,686
Human resources – Costs
Trade in Information and Communication Services: Uganda Case Study
Business Process Outsourcing (BPO) Trade in commercial services, 2004 Total = US$ 2,211 billion US$ 1,061 billion Computer & Information Services Construction (2%) (2%) Insurance (2%) US$ 42 billion Financial (6%)
Communications (2%)
Travel 29%
Transport 23%
Other 48% "ICTenabled services"
Source: WTO.
Royalties (7%) Personal, cultural & recreational (1%) Other business services 24%
Trade in Information and Communication Services: Uganda Case Study
BPO in action India BPO export market 415
316
$6.3
$4.6
553 $8.4
163 101 $1.5
FY05 FY06 Exports (US$ billion)
Source: NASSCOM
FY07 Staff (000s)
Accumulated FDI in Mauritius BPO market, US$ million $50
$30
$33
Jan-06
Sep-06
Source: BOI
Philippines BPO export market
2004 2005 Exports (US$ billion)
$3.5
2006 Staff (000s)
Source: BPA/P.
South Africa call center agents
6,500 Mar-07
$2.4
237
2003
8,141
2004
Source: CallingtheCape
11,312
2005
Trade in Information and Communication Services: Uganda Case Study
Uganda BPO policy & actions “Facilitate the establishment of Internet-ready Industrial Parks to engage in Data Capture and Data Processing export work.” —National ICT Policy 2002 “The creation of a policy and regulatory environment that supports Uganda’s aspiration of being a telecommunications and IT services hub.” —Telecom Sector Policy Review 2005 Uganda Investment Authority profiles on call centers, data centers and etranslation
BPO Group within Ministry of ICT ICT Park Presidential Committee ICT Outsourcing Services Association
Trade in Information and Communication Services: Uganda Case Study
BPO destinations
Trade in Information and Communication Services: Uganda Case Study
BPO ranking Human Resources
UNDP Education Index TOEFL GDP per capita
ICT Infrastructure
International bandwidth Broadband costs Fixed lines
ICT Laws
WTO BTA WIPO WCT UNICTRAL
Business Environment Doing Business Rank Governance Rank Electricity
Mauritius Philippines S. Africa India Ghana Kenya Uganda Sudan Tanzania Ethiopia Rwanda 0 Human Resources ICT Laws
0.25
0.5
0.75
ICT Infrastructure Business Environment
Trade in Information and Communication Services: Uganda Case Study
Uganda BPO SWOT STRENGTHS
WEAKNESSES
English official language Competitive telecommunications regime (and experience) WTO member, commitments under GATS and signed on to Reference Paper Liberal foreign investment regime Some experience with BPO Ranks high in some business indicators such as hiring staff Annual university output
International bandwidth Electricity Relatively high telecom prices No WTO ITA or CRS commitments; lacking laws relating to e-commerce, data privacy, etc. External image. Ranks low in some governance indicators & not widely known as BPO location Lack of visible single industry association
OPPORTUNITIES
THREATS
Links to India, largest developing country BPO location Planned fiber optic initiatives Leverage Makerere University ICT programs for training and industry links Variety of outsourcing activities
Landlocked Competition from other developing countries Backlash against offshoring in developed countries
Trade in Information and Communication Services: Uganda Case Study
Benefits of WTO Commitments in ICT Transparency and predictability Support for domestic reform efforts Attract foreign investment Market opening for exports
Trade in Information and Communication Services: Uganda Case Study
WTO and ICT General Agreement on Trade in Services (GATS) Covers services only
• Telecommunications • Computer & Related Services (CRS)
Information Technology Agreement (ITA) Addresses tariffs on goods considered essential to ICT sector
General Agreement on Trade and Tariffs (GATT)
Governs import of products through tariff schedules
Uganda Status WTO member since 1995 Scheduled commitments for communications services under GATS Expanded telecom commitments in 1999 (post1997 after Basic Telecommunications Agreement concluded) and signed on to Telecommunications Reference Paper No CRS commitment Not party to ITA
Trade in Information and Communication Services: Uganda Case Study
Structure of GATS GATS is an integral part of the WTO Agreement, consisting of a number of articles in its main body and several annexes, including an Annex on Telecommunications General Obligations: Main body of the GATS and the Annex on Telecommunications are applicable to every WTO Member. Specific Commitments: Each WTO Member has attached its own schedule to the GATS, through which it makes individual specific commitments on market access, national treatment, and any additional commitments the Member wishes to undertake. Basic Telecommunications Agreement (BTA): Special GATS negotiations intended to deepen and expand commitments in basic telecommunications concluded in 1997, referred to as the BTA. Members participating in these negotiations made commitments, or further commitments, in their schedules on market access or national treatment. Many also made additional commitments in the form of a "Reference Paper", which contained a set of regulatory principles applicable to the telecommunications sector.
Trade in Information and Communication Services: Uganda Case Study
Supply modes
Specific commitments are inscribed by service sector and mode of supply of the service, and may be subject to limitations on market access and national treatment.
WTO GATS Classification
Description
Example
Mode 1 Cross-border supply
Services flows from the territory of one An American consumer making Member into the territory of another a phone call to Uganda Member
Mode 2 Consumption abroad
Situation where a consumer moves into another Member's territory to obtain a service
A Ugandan mobile subscriber roaming in Kenya
Mode 3 Commercial presence
Service supplier of one Member establishes a commercial presence, in another Member's territory to provide a service
UK company opens an office in Kenya to provide data processing for its European operations
Mode 4 Presence of natural persons
Persons of one Member entering the territory of another Member to supply a service
Uganda IT consultant temporarily employed by company in USA
Trade in Information and Communication Services: Uganda Case Study
Telecommunications Services Annex on Telecommunications General obligation imposed on all WTO Members to ensure that all service suppliers seeking to take advantage of scheduled commitments are accorded access to and use of public basic telecommunications, both networks and services, on reasonable and non-discriminatory basis. Specific commitments made by WTO Members for telecommunications services which are attached as national schedules, and made a part of the GATS. Telecommunications Reference Paper – additional commitment made by WTO Members through their schedule. WTO Members can include the Reference Paper in whole (e.g., Uganda) or in part (e.g., India) as part of their commitment. The Paper set forth six regulatory principles: i) competitive safeguards; ii) interconnection; iii) universal service; iv) public availability of licensing criteria; v) independent regulators; and vi) allocation and use of scarce resources.
Trade in Information and Communication Services: Uganda Case Study
Computer & Related Services (CRS) 1. BUSINESS SERVICES Computer & Related Services
B.
a. Consultancy services related to the installation of computer hardware (841) b. Software implementation services (842) c. Data processing services (843) d. Data base services (844) e. Other (845 and 849)
20 of top 25 BPO jurisdictions have made commitments in their Schedules for CRS
Top 25 BPO Jurisdictions Rank
Country
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
India China Malaysia Thailand Brazil Indonesia Chile Philippines Bulgaria Mexico Singapore Slovakia Egypt Jordan Estonia Czech Republic Latvia Poland Vietnam United Arab Emirates United States Uruguay Argentina Hungary Mauritius
Source A.T. Kearny; WTO
CRS commitment
Trade in Information and Communication Services: Uganda Case Study
Information Technology Agreement (ITA) Plurilateral initiative among WTO Members and acceding states (each Member must specifically sign on) Requires Members that have signed on to the ITA to eliminate tariffs on IT products listed in the Attachment to the Ministerial Declaration on Trade in Information Technology Products and to bind their tariffs for these products at zero. Applied on the principle of “Most Favoured Nation” and therefore all WTO members benefit from the Member’s commitment.
Certain ITA products listed in Attachment to the Declaration Computers Telecommunications Semiconductors Semiconductor manufacturing equipment Software Scientific Instruments
Trade in Information and Communication Services: Uganda Case Study Top 25 BPO Jurisdictions
ITA facts Initially, 29 Members signed on at the Singapore Ministerial Conference (December 1996) The number of participants has grown to 70, representing about 97% of world trade in ICT products 18 of top 25 BPO jurisdictions have signed on to ITA
Rank
Country
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
India China Malaysia Thailand Brazil Indonesia Chile Philippines Bulgaria Mexico Singapore Slovakia Egypt Jordan Estonia Czech Republic Latvia Poland Vietnam United Arab Emirates United States Uruguay Argentina Hungary Mauritius
Source A.T. Kearny; WTO
Member of the ITA
Trade in Information and Communication Services: Uganda Case Study
Uganda’s current GATS commitments for telecommunications services Specific commitments for telecommunications services Market access commitments • No limitations on measures affecting consumption abroad of telecommunications services • Some limitations on national treatment, measures affecting cross-border supply, consumption abroad, and commercial presence for supply of telecommunications services • Measures affecting presence of natural persons are unbound No Most Favored Nation (MFN) exemption under Art. II of GATS Specific limitations • Commitments provide for duopoly in public voice and data services and private voice network services to third parties • All international services must be provided through duopoly license holders • Resale of excess capacity not permitted • Limit of three mobile providers (one being UTL) • Video and audio broadcast services excluded from scope of telecom services Signed on to Telecommunications Reference Paper
Trade in Information and Communication Services: Uganda Case Study
Uganda GATS and Reference Paper recommendations Generally, compliance with GATS Recommendations to update Uganda’s commitments to the Ugandan reality Issues in which Uganda’s legal reforms are not reflected in current commitments
Recommendations to enhance ICT marketplace by adopting “full commitments” for telecommunications services under GATS Issues to expand compliance under GATS
Recommendations to ensure compliance with current GATS general obligations and Reference Paper
Trade in Information and Communication Services: Uganda Case Study
Recommendation to update Uganda’s schedule of commitments to the Ugandan reality Uganda schedule of commitments on market access and national treatment for telecommunications services
Recommended modifications to schedule
Schedule of commitments provide for a duopoly in public voice and data services and private voice network services to third parties. International services must be provided through the duopoly license holders and resale of excess capacity is not permitted.
Uganda no longer needs this carve-out since it has a competitive market and no restriction on resale exists.
Schedule of commitments provide for a maximum of three mobile operators, one being UTL.
Uganda no longer needs this limitation since there are more than three mobile operators that have been licensed to provide services in the country.
Trade in Information and Communication Services: Uganda Case Study
Recommendations to enhance Ugandan ICT market by adopting “full commitments” for telecommunications services under GATS Uganda schedule of commitments on market access and national treatment for telecommunications services
Recommended modifications to schedule
Uganda law imposes higher registration fees for foreign companies and higher minimum investment requirements in practice although not legal requirement -- US$100,000 for foreign investors and US$50,000 for local investors.
Provide same treatment for local and foreign investors.
Uganda’s schedule of commitments excludes “video and audio broadcast services”.
Eliminate the exclusion of “video and audio broadcast services” in schedule to provide a level playing field for operators that seek to provide combined offering of voice, video, and data services (e.g., triple play offerings).
The schedule states that for satellite based services access is limited to what is provided under the MoU on Global Mobile Personal Communications Satellite.
Eliminate limitation on access given that the MoU only relates to importation and use of global mobile phones and not the provision of the service.
Trade in Information and Communication Services: Uganda Case Study
Recommendations to ensure compliance with GATS General Obligations for telecommunication services and Reference Paper Ugandan regulatory framework
Recommended modifications
The Licensing Regulations require every licensee to make tariffs publicly available, but does not clearly require that all terms and conditions for connection to the network or the specifications of technical interfaces be publicly available.
Pursuant to Section 5 of Annex on Telecommunications, ensure that provisions are included requiring public network operators to make leased lines available and on reasonable terms and conditions and information on technical interfaces is publicly available.
The 1997 Act provides for establishment of a Communications Tribunal but that has yet to be established.
Establish a tribunal to comply with Article VI of GATS requiring Members to maintain judicial, arbitral or administrative tribunals and procedures for prompt review of administrative decisions.
Trade in Information and Communication Services: Uganda Case Study
CRS recommendations Make commitments to cover all types of computer services. Uganda should make its commitments at the overall two digit computer services sector level (based on the two-digit WTO Secretariat’s Services Sectoral Classification and Central Product Classification (CNC) number of 84) so that all forms of computer services are covered by its commitments. Currently, confusion arises because many ICT/BPO activities could potentially fall under more than one of the subcategories listed under CRS.
Trade in Information and Communication Services: Uganda Case Study
ITA recommendation Uganda should join the ITA and commit to reducing its tariffs for ITA products to zero; this can be done over a period of time. A number of Uganda’s tariffs of ICT products are already at zero (e.g., no import duty in Uganda on mobile phones or computers). Eliminating tariffs and thereby reducing costs on IT products will: benefit various ICT industries: data processing, computer assembly, and telecommunications services, particularly mobile services industry. enhance productivity and improve economic efficiency in industry Likely result in expanded ICT usage benefiting consumer, industry and economy. These benefits will outweigh the costs of potential short-term loss in customs duties collected, and potential adverse competitive effects on inefficient domestic producers of information technology products. In binding its duties at zero, Uganda would be providing a signal to foreign and domestic investors of its commitment to maintain this policy in the future.
Trade in Information and Communication Services: Uganda Case Study
Conclusions and Recommendations Connectivity is key strategic issue and Uganda should ensure that it has other avenues for bandwidth than simply relying on Kenya While connectivity is a serious issue and resolution of this is fundamental, it will not resolve all issues and automatically make Uganda a tier one BPO jurisdiction Competition is fierce among the countries vying for ICT-enabled services, and a number of countries have mature markets for these services; as such, Uganda should seek to enhance its attractiveness as a BPO jurisdiction as much as possible in order to differentiate it from its competitors (e.g., updating and enhancing its WTO commitments, enacting ICT laws, maximizing potential incentives for BPO companies) Uganda should support the development of a BPO industry association, such as NASCOM in India Given that resources are limited, within the government, ICT-enabled service activities should be coordinated among the different agencies to ensure that initiatives do not overlap and are properly coordinated As found in many BPO jurisdictions, it is better to focus on certain niche BPO specialties and then evolve to more enhanced activities rather than try to compete for all types of BPO services
Trade in Information and Communication Services: Uganda Case Study
Thank you. Janet Hernandez janet@tmgtelecom.com Michael Minges minges@tmgtelecom.com Tel. 01-703-224-1501 Fax 01-703-224-1544 www.tmgtelecom.com