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POTRAZ calls for forex prioritisation

19 Nov, 2018 - 11:11 0 Views
POTRAZ calls for forex prioritisation

eBusiness Weekly

Enacy Mapakame
HARARE – The Postal Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) has said there is need for foreign currency prioritization for telecommunications equipment.

Presenting before the Parliamentary Portfolio Committee on Information Communication Technologies and Courier Services, POTRAZ director general Dr Gift Machengete said the sector was highly dependent on imports.

“Currently there are no local suppliers of telecommunications equipment and equipment. All spare parts are imported and supplied by foreign vendors such as ZTE, Ericson and Huawei amongst others. This requires foreign currency.

“Spare parts for telecommunications equipment are not on the priority list for international remittances. This has negatively impacted equipment servicing, replacement of faulty, damaged and malfunctioning equipment, network upgrades and network re-dimensioning,” said Dr Machengete.

He added that the sector’s role in economic growth could not be overemphasized.

“Zimbabwe is looking to become an upper middle-income economy by 2030. This will be achieved through far reaching industrial reform hinged on modernization as well as reengagement with the international economy,” he said.

“ICTs have been identified as a key enabler for vision 2030 due to their role in national development, ICTs play a pivotal role in the growth of an economy as services are now used in almost all sectors of the economy, ranging from commerce, agriculture, health, education among others.”

ICT has been identified as a key enabler to economic growth with its services used in all the key sectors of the economy such as mining, agriculture, education, health as well as industry and commerce.

According to the World Bank, there is a strong correlation between ICT growth and GDP growth.

In a 2009 report titled “Extending Reach and Increasing Impact,” a 10 percent increase in broadband penetration accounted for a 1,38 percent increase in per capita GDP growth in developing economies.

Dr Machengete said the sector was also crucial in promoting ease of doing business especially at a time transactions are now largely skewed towards digital platforms such as internet banking, real time gross settlement (RTGS) and other electronic platforms.

However, economic challenges such as limited foreign currency, high cost of machinery and the current liquidity and cash crunch the country is experiencing are posing challenges for the sector as it has reduced consumer spending.

According to POTRAZ the Average Revenue Per User per month (ARPU) for the mobile networks has gone down to $3,98 per month in 2017 from $4,97 per month in 2015.

Additionally, incremental cost studies which done in 2013 and 2014 and reviewed in 2017 revealed that Zimbabwean operators were being charged higher prices and higher interest rates for telecommunications infrastructure by international telecommunications vendors, such as Ericson and Huawei amongst others, as compared to the prices charged to operators in other countries.

“This largely attributed to the high country risk perception of Zimbabwe as a credit destination. This negatively impacts on operator profitability,” he said.

Despite the challenges, POTRAZ has however lined up several programmes aimed at boosting ICT growth in the country.

Already, mobile penetration rate has increased to 102 percent in 2017 from 25 percent in 2009. Internet penetration rate rose to 51 percent in 2017 from 5 percent in 2009.

Sector revenues went up to over $1 billion in 2017 from about $600 million in 2010 while investment in the sector has also been on an upward trajectory as evidenced by the deployment of fibre which now stand at 8,765km in 2017.

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