How ICT sector can benefit from Sh7.2bn budget boost

The telecommunications business has in the past few years faced the scourge of cable vandalism.

Every telecom operator has a sad tale to tell in this regard. Losses spanning billions of shillings because of service outages are the result of cable vandals, who sell their loot to scrap metal merchants.

However, there is now a ray of hope in efforts to control vandalism after the Finance minister put on notice unscrupulous scrap metal investors.  

In his budget speech two weeks ago, Mr Njeru Githae proposed an amendment to the law so that the Internal Security ministry is empowered to issue regulations requiring identification and traceability of all scrap metal handled by dealers.

The minister proposed a penalty of Sh1 million or imprisonment for a breach of the supporting regulations and law.

To telecom operators and Internet Service Providers (ISPs), who rely on copper and fibre optic networks, this is both a positive and welcome move.

Apart from putting unscrupulous scrap metal dealers and vandals on notice, there were other favourable highlights in the budget for the ICT sector.

The industry has a budgetary allocation of Sh7.2 billion as part of the government’s continued investment in infrastructure.

While noting the critical role of ICT in the economy, the minister proposed removal of duty on imported software in a bid to stem the CAPEX and OPEX of industry players so that end-users can have the services at affordable prices as well.

Mr Githae also removed duty on set-top boxes, which are essential in digital migration. The world is targeting year 2015 as the official deadline of the analogue to digital migration of television signals.

Kenya’s deadline, set for June this year, has not been realistic as most people are yet to switch to the digital signal.

By removing the tax on set top boxes, the minister has eased the burden of extra costs for Kenyans in acquiring the gadgets.

Digital TV is still expensive for many Kenyans and the option of using set-top boxes is commonplace in regions where the digital signal is available.

Opportunities

The Finance minister’s allocation of Sh480 million for the purchase of computers for schools is good in efforts to scale the need for ICT.

The benefits of computers in schools are clear. Young people will have more access to digital skills associated with computer literacy and can apply the knowledge in exploiting opportunities in the ICT world.

Also, with the aid of literacy in computers, they can access information from digital fronts and interact with the rest of the world in cyberspace.

Notably, access to information is key to industrialisation and innovation. Considering ICT as part of the infrastructure for economic growth, one issue that cannot be ignored is the importance of energy.