In January this year, President Lazarus Chakwera launched the Malawi 2063 (MW2063), a new long-term development masterplan in which the country aspires to be an upper middle-income nation 42 years from now.
Precisely, the new vision being implemented through the National Planning Commission (NPC) seeks to transform Malawi into a wealthy and self-reliant “upper middle-income country” and projects that “low middle-income” status could be achieved by 2030 if annual economic growth averages the rate of six percent.
Unlike with its predecessor, the Vision 2020—which missed most of its key targets—MW2063 appears to be on solid footing with a dedicated agency to coordinate and oversee its implementation. Two points.
In striving to become “an inclusively wealthy and self-reliant nation by 2063”, MW2063 sets out several targets, including improved information and communications technology (ICT).
Proclaims MW2063 on ICT dreams: “We shall have robust ICT infrastructure with cross-country coverage of reliable and affordable fostering of technological adoption and digital access.
“As a country, we shall have a world-class digital economy that is globally competitive with, among other things, sound e-commerce, e-learning, e-health and e-governance systems.
“We shall promote investment in ICT infrastructure to increase digital access and technological adoption. We shall adopt robust telecommunications systems that are fast, reliable and affordable.”
To realise the ICT targets, focus seems to be “reliable and affordable services”.
It is a fact that Malawians pay through the nose to access the Internet. For the record, a National Statistical Office survey few years ago established that while many Malawians have access to mobile phones and other telecommunication facilities, usage remained low because of the high cost of services charged by operators. The high cost explains the low penetration rate of Internet in Malawi in today’s ICT era where life and business revolve around the Internet.
If Malawians, especially the #DataMustFall campaigners, are to smile that data rates are bearable, I still feel that g overnment holds the key.
Taxation of the Internet is one major barrier to low or affordable data rates as envisaged under the MW2063 ICT targets. Unless the government revised the taxes on Internet and ICT services, there is no way the operators—with or without meaningful competition— can make data rates fall.
Mobile network operators pay 10 percent excise tax and 16.5 percent value-added tax (VAT) for the Internet services they render to Malawians. That is besides the 30 percent corporate tax and other taxes levied on them like other businesses. In Botswana, the corporate tax is 22 percent while in Zambia it is 35 percent.
In terms of excise duty on airtime, the rate is not universal as while Malawi charges 10 percent, in Zambia it is 15 percent and in Zimbabwe five percent.
In Malawi, there is also 25 percent customs duty levied on ICT equipment covering computer parts and accessories while telephone and mobile handsets are duty free.
In the MW2063, economic and ICT infrastructure are seen as key enablers. In fact, they are.
The Malawi Digital Economy Strategy (2021-2026) prepared by the NPC targets to increase network access for Internet usage to 80 in every 100 Malawians by 2026 from the present 13.8 percent. Device ownership is also projected to increase from 51 percent to 80 percent of the population.
To address affordability, the strategy targets to phase out the 10 percent excise on data and text package charges and the 3.5 percent of ICT provider turnover collected by Macra.
If Malawi is to truly increase access to ICT infrastructure, especially the Internet, government will be key, especially in terms of reviewing the taxes on ICT equipment and services.
The government should walk the talk and lower rates for Internet access which has the potential to accelerate economic activity and, by extension, generate extra revenue.