A Limited ICT Sector is a Barrier to Economic Growth and Business Formalization
Technology has changed almost everything about the way we process information from fostering greater collaboration, increasing communication, and improving efficiency. Ghana was one of the first countries in Africa to reform its Information Communication Technology (ICT) sector in order to support its growth and usability. ICT refers to all communication technologies including the internet, wireless networks, computers, software, cell phones, and other media applications and services that allow users to access, store, and retrieve digital files. Since the 1990s, the Ghanaian government has implemented liberalization policies for the telecommunications sector, which was successful at increasing teledensity. The ICT sector has major potential to increase employment, business growth, and formalization, and to drive investment in Ghana as it can facilitate the execution and deployment of educational and training tools needed to develop and run businesses with greater efficiency.
Now, Ghana has the potential to be the preferred Information Technology Enabled Services-Business Process Outsourcing/Offshoring (ITES-BPO) destination in the Economic Community of West African States (ECOWAS) region. The IT-enabled service segment stands out as one of the novel industries of growth in Ghana, mainly due to global outsourcing and offshoring. But proper investment in ICT education and local labor procurement regulations, requiring companies to train and hire local labor in all aspects of technical project development, would propel Ghana’s economy further and jumpstart a technology revolution in West Africa, with Ghana serving as the leading hub. Countries such as India, the Philippines, the Czech Republic, and Ireland have completely transformed their economies from prioritizing IT and ITES-BPO segments as the basis to propel their economies in accelerated growth in a short amount of time. Ghana’s stable political situation combined with the country’s unrealized talent pool, that if trained, can provide the necessary means for greater growth and ownership of the industry.
Previously, in 2003, the government of Ghana introduced the Information and Communication Technology for Accelerated Development (ICT4AD) Policy. The policy asserted that Ghana’s development process can be accelerated by the development, deployment, and usage of ICTs throughout the economy and society. The primary goal of ICT4AD was to create an ICT-led socio-economic movement to convert Ghana into a middle-income, knowledge, and technology-driven society. The introduction of ICT4AD in 2003 was successful in that rural communities were given more accessibility to ICTs than before. However, today rural areas still lack ICT infrastructure and associated capacity building resulting in ICTs not being used to their full potential in these areas. ICTs help with the automation of Rural Banks that afford more people living in rural areas to have access to bank accounts, which enables participation in the formal business ecosystem. Micro, small, and medium enterprises (MSMEs) that use technology tools reported positive outcomes and other benefits from adopting ICTs. Thus, implementing ICTs is especially important for rural communities as it can lead to progress in agriculture, health, MSME formalization, and most importantly increased education access.
Moving forward, Ghana needs to develop the technological infrastructure and local human resource capital alongside enacting the necessary policy and regulatory framework changes if Ghana is to become a top ITES-BPO destination. The need to increase ICT training in educational efforts has already been identified by policy officials since IT-enabled services (ITES) have been described as one of the key sectors for developing economic growth, alongside agro-processing and tourism. Educational institutions that utilize ICTs and teach their applications will develop the emerging workforce with the transferable skills needed for Ghana to realize its full economic potential in the technology ecosystem. This can lead to thousands of jobs, high revenue creation, and can help bridge the gap that connects MSMEs to the education necessary to formalize enterprise. However, the ICT sector’s full potential for rural development is hindered by the instability of energy sources such as electricity, lack of ICT infrastructure, and equipment. Concomitantly, internal capability, high levels of illiteracy, and a lack of financial support has affected local business owners’ acceptance and sustaining adoption of the ICTs for the operation of their businesses. Thus, the adoption of ICTs by Ghanaian businesses will require more focused efforts on increasing MSMEs awareness of the benefits of using ICTs, access to use, and training on the application of ICTs in business.
Authored by Aubry Miller
SGI’s Business & Economic Development Working Group
Works cited:
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Hewitt Associates. 2006. Improving Business Competitiveness and Increasing Economic Growth in Ghana: The Role of Information and Communication Technologies & IT-Enabled Services. Washington, DC: infoDev / World Bank. Available at: http://www.infodev.org/en/Publication.170.html