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Lowering ICT Taxes on Broadband Penetration will boost internet Growth in Africa

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louis Buyisiwe

Mar 10, 2024

Internet expansion everywhere in Africa

The Economic Commission for Africa (ECA) recently highlighted the benefits of reducing taxes in the Information and Communications Technology (ICT) sector. According to a report presented by ECA's Deputy Executive Secretary, Hanan Morsy, at a round-table in Victoria Falls, Zimbabwe, lower ICT taxes could boost broadband penetration, stimulate economic growth, and increase revenue. The report, based on studies from Uganda, Kenya, Tanzania, Ghana, Côte D'Ivoire, and Nigeria, suggests that a gradual reduction of sector-specific taxes would minimize immediate fiscal impacts while fostering long-term economic benefits. During the discussions, various experts emphasized the critical role of technology in Africa's development, noting the need for increased investment in digital infrastructure and innovation to bridge the digital divide and promote a unified digital market across the continent.
The potential economic benefits of reducing taxes in the Information and Communications Technology (ICT) sector.

A recent report by the Economic Commission for Africa (ECA) emphasizes the potential economic benefits of reducing taxes in the Information and Communications Technology (ICT) sector. Presented by ECA's Deputy Executive Secretary Hanan Morsy during a technology-focused round-table in Zimbabwe, the report argues that lower taxes on ICT could lead to broader broadband penetration, enhanced economic growth, and ultimately, increased government revenue.

The findings, derived from studies across six African countries, advocate for a gradual reduction in sector-specific taxes to mitigate immediate fiscal impacts while paving the way for substantial long-term economic and social benefits.

The discussion, part of the 56th Session of the ECA Conference of African Ministers, brought to light the pivotal role of technology in advancing Africa's development agenda.

Claver Gatete, the ECA Executive Secretary, and other experts stressed the importance of strategic investments in digital infrastructure and innovation. They highlighted that digital inclusivity and a unified digital market are essential for leveraging technology to foster economic transformation and development across the continent.

Furthermore, the roundtable underscored the uneven growth of broadband in Africa and the challenges of digital penetration in certain regions.

Experts like Charles Murito from Google and Njuguna Ndung’u, Kenya's Cabinet Secretary for National Treasury and Economic Planning, discussed innovative solutions such as blockchain for addressing issues like counterfeit medicines and enhancing financial markets.

The collective insight was clear: Africa must prioritize digital advancement and cooperation among nations to achieve a more interconnected and economically robust continent.

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