GSMA calls for policy reforms to create economic value by closing Zambia's digital divide
2North Dakota October 2024, Lusaka: The GSMA has launched the Driving the digitalization of the economy in Zambia: Report on leveraging policy reformswhich outlines how digital transformation can accelerate Zambia's social and economic growth and create new opportunities for millions of people. The report focuses on the role of digitalization in supporting the government in achieving the country's objectives, as set out in the country's Vision 2030 and subsequent national development strategy documents up to and including the 8NDP.
The report outlines several policy recommendations that, if implemented, would accelerate this process and support the government in the main pillars of the national development strategy.
Widespread adoption of digital technologies in the public and private sectors can boost productivity, stimulate innovation and raise living standards. As the foundation of this transformation, the mobile telecommunications sector has been recognized by the Government of Zambia through its National Information and Communications Technology Policy 2023. Digitalization promises to improve job creation, formalize the economy and boost a more efficient use of resources, which will ultimately lead to greater economic growth and better public resources.
However, Zambia's mobile sector faces challenges, including financial sustainability, affordability of services and the slow pace of digital adoption. Addressing these challenges is crucial to ensuring the continued growth and impact of the sector. The GSMA report calls for several policy reforms to unlock the potential of Zambia's digital economy, accelerate digital and financial inclusion and deliver broad benefits to both citizens and the government.
Policy reforms for Zambia's digital future
- Reduce taxes and sectoral fees: Eliminate the special airtime tax of 17.5%, one of the highest in the region, and reduce the corporate income tax from 35% applicable to the telecommunications sector to 30% in line with other sectors of the economy .
- Sustain investment in telecommunications infrastructure: Designate telecommunications infrastructure as critical national infrastructure and ensure it is free from load shedding.
- Easing regulatory restrictions on mobile retail rates: Tariff regulation should only occur where a market failure has been identified after a market study, with prices determined by healthy competition.
- Promote financial inclusion through mobile money: Lift restrictions on mobile money charges and eliminate the mobile money tax to expand access, particularly in underserved areas.
- Stimulate demand through innovation: Invest in digital skills development and promote widespread adoption of emerging technologies to drive greater digitalization.
By implementing these reforms, Zambia could connect 2.1 million more citizens via mobile devices by 2028, significantly contributing to closing the 68% usage gap. This will also support broader economic goals, boosting growth in sectors such as agriculture, trade and manufacturing.
Honorable. Felix C. Mutati, Minister of Science and Technology, Zambia reacted to the report: “Digitalization significantly benefits social and economic growth by improving productivity, reducing costs and increasing access to global markets by leveraging the African Continental Free Trade Area. Improves the transparency of labor productivity and minimizes the underground economy. Digitalization is a key driver for improving social and economic well-being. It promotes social inclusion by improving access to information and government services and significantly improves the delivery of public services. In addition, it contributes to job creation, food security and the quality of health services. The Government of Zambia is committed to harnessing technology to drive the digitalisation of the economy and ensure that citizens can unlock the true value of technology.”
Angela Wamola, Head of Sub-Saharan Africa, GSMAsaying: “The Zambian government has demonstrated a strong commitment to digitalisation through its National ICT Policy 2023 and the Eighth National Development Plan. Now, more than ever, collaborative action between government, industry and stakeholders is needed to create the enabling environment for digital transformation. Zambia's future lies in digital connectivity. With the right policies, we can close the digital divide, empower communities and unlock new economic opportunities. The Zambia Digital Economy Report provides a clear roadmap to ensure that all citizens benefit from the digital revolution. Now is the time to take bold action.”
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About the GSMA
The GSMA is a global organization that unifies the mobile ecosystem to discover, develop and deliver critical innovation for positive business environments and social change. Our vision is to unlock the full power of connectivity so that people, industry and society thrive. Representing mobile operators and organizations across the mobile ecosystem and adjacent industries, the GSMA offers its members three broad pillars: connectivity for good, industry services and solutions, and outreach. This activity includes advancing policy, addressing today's biggest societal challenges, supporting the technology and interoperability that make mobile devices work, and providing the world's largest platform to convene the mobile ecosystem at the MWC and M360 series of events.
We invite you to learn more at gsma.com
