With the rapid growth of the ICT sector in the country and across the globe, local Information Technology (IT) companies have embarked on a move to strategically position themselves by coming together under an association with a common objective of building capacities in order to improve their efficiency and have a significant contribution to the Uganda’s economy.
The Chairman of the Alliance for Trade in Information Technology and Services (ATIS), Patrick Kagenda says with 8.5 million internet users in the country, coupled with 17% growth rate of Internet usage, players in the Information Technology sector need to be well organized in order to maximize their performance and contribution to the economy.
Speaking to The Sunrise Newspaper at the launch of the Alliance for Trade in Information Technology and Services (ATIS), Kagenda said that since the inception of the alliance on Jan 12, 2017, 21 companies have joined the coalition. Kagenda who is the Executive Director of Data Cares, an IT company further explained that the Alliance intends to create space for better operations for IT practitioners to the extent of exporting IT services.
Kagenda says that the alliance will focus at how these IT companies can meet the required standards when delivering IT solutions. He adds that with a well-organized group of IT companies the sector will be able to employ more people and deliver quality IT solutions.
He says that the alliance is expecting to tap into both local and international business opportunities especially now that the costs of IT have started to go down something that will in turn result into efficient systems.
Currently, The Philippines, Poland, India and Hungary are some of the leading countries in software production and IT systems, and yet Uganda can also take advantage of the growth to compete favorably since more graduates are being churned out from the various institutions of learning every year.
Specialists say that being along the Equator, Ugandan IT Companies take the advantage of its time zone among other advantages to favorably compete in Data management, processing ad technology.
Representing the ICT minister Frank Tumwembaze at the launch of the Alliance in Kampala, the commissioner for ICT Julius Torach noted that because of government efforts, Uganda’s ICT rankings had improved from 158 to 152 position on the ITT Development Index while the country is now standing in the second position in the East African Region.
Torach reiterated government’s commitment to develop ICT infrastructure like ensuring that there is reliable network across the country and to the region. He observed that improving internet speed will enable IT companies to enjoy a more favorable operating environment.
He revealed that the ministry has allocated funds to a tune of UGX13 billion for IT innovations grow the sector, and it is on this note that individual companies under this alliance and the alliance itself to take advantage of such funds.
Welcoming the Alliance for Trade in Information Technology and Services (ATIS), Torach challenged the group led by Kaganda and Grace Achire as the Vice Chairperson to draw a list of issues that the Ministry should address.
He revealed that the ICT Ministry has signed agreement with Estonia-ICT lab that brings together IT companies and export IT services which the newly launched alliance (ATIS) can take advantage of the innovations and experiences of the lab in Estonia.
One of the key issues that need to be urgently addressed is the certification of the IT companies especially in view highly demanding Oil and Petroleum industry.
According to Kagenda, the problem arises from the high costs associated with obtaining certification since the reputable companies do not have local subsidiaries.
Although government contributes matching grants (half of the total costs) for some of the IT Companies to get certified, Kagenda says the costs for a company to get certified remain high since the ministry only refunds the cost after a company makes full payments.
Kagenda says that absence of such certification of IT undermine the business opportunities for the local companies as government, which is the biggest buyer ends up procuring services of the certified foreign companies.
While reminding government of its “Buy Uganda Build Uganda (BUBU) policy”: Kagenda says it’s high time that government builds the capacity of the existing IT companies through ATIS and helps them get certified in order to offer quality IT solutions and therefore implement the BUBU Policy.
He is optimistic that if the costs of Internet Services are subsidized for the private sector just like the case for government departments, this would stimulate IT innovations and efficient operations of IT companies.
Kagenda also laud out some of the objectives of ATIS including lobbying government to allocate IT companies some permanent place that will become a hub for the major IT companies.
As an indication of what they intend to do with ATIS, Kagenda noted that they intend to advocate for the scraping of VAT on IT related material and services as an incentive for young people to formalize their businesses and grow. Although this category previously didn’t attract VAT, the tax was re-introduced in 2013/2014 budget.
Hostatile Executive officer Dickson Mushabe supported Kagenda’s proposal to lift VAT saying that currently IT companies face numerous challenges including that of high costs of doing business, lack of external market, limited skilled personnel, high cost of rent and internet costs among others.