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Information and communications technology (ICT) Key technologies for sustainable development

BMZ Strategy Paper 2 | 2013 e

Dirk Niebel, MdBFederal Minister for Economic Cooperation and Development

Gudrun Kopp, MdBParliamentary State Secretary to the Federal Minister for Economic Cooperation and Development

Hans-Jürgen BeerfeltzState Secretary of the Federal Ministry for Economic Cooperation and Development

BMZ STRATEGY PAPER 2/2013e3

Contents

Overview and summary 4

1. Status and relevance of information and communications technology (ICT) in development policy 6

2. Leveraging the potential of ICT for development 92.1 ICT diffusion boosts economic growth 92.2 ICT plays a role in political participation and democratisation processes 102.3 ICT helps achieve socioeconomic and environmental development goals 11 Management information systems 11 E-Learning 12 Using the internet and digital knowledge resources 12 Mobile telecommunications 132.4 ICT applications increase the effectiveness of development cooperation 13

3. ICT for development – challenges 15

4. ICT in German development cooperation 164.1 International obligations 164.2 Strategic approach of German development cooperation in the field of ICT 174.2.1 Priority areas and principles 174.2.2 Strategic fields of action 18 An enabling environment for ICT 18 ICT sector development 20 Financing ICT infrastructure 20 IT sector development 21 > Strategy development 21 > Support for IT clusters and industry associations 21 > Capacity development for local IT companies 21 > Domestic market development 22 > Export promotion 23 Use of ICTs in German development cooperation’s projects and programmes 24 ICT and promoting good governance 24 ICT and rural development 24 Cooperation with the private sector in the ICT sector 25

Case Studies 26

Bibliography 29


Overview and summary

German development cooperation advocates the dis-semination and use of information and communica-tions technology (ICT) in partner countries, in order to leverage its potential to drive sustainable develop-ment and bridge the digital divide. Modern ICT is a key instrument in many projects and programmes implemented across the many different sectors sup-ported by German development cooperation.

This strategy paper lays down guidelines for sup-porting the dissemination and use of ICT in partner countries and for its effective use in the different sectors addressed by German development coopera-tion. It provides a reference framework for German development organisations and serves as a basis for dialogue with partner governments, non-gov-ernmental organisations, the private sector as well as other donors and international organisations. In particular, the paper contributes to the following objectives:

> Deploying ICT in projects and programmes:

ICT is playing an increasingly important role in modern society, among other things as an instru-ment in development cooperation and in driving innovation and efficiency in many areas. For this reason, it is used in a wide range of projects and pro-grammes supported by German development coop-eration. This strategy paper outlines key guidelines for and approaches to courses of action, in order to shape ICT activities systematically and efficiently, and increase the extent to which it is used in other measures.

> Supporting Germany’s contribution to ‘ICT for development’:

Germany is one of the few donors currently actively involved in ICT at the level of international coop-eration. This paper outlines the approach pursued by German development cooperation in a clear and transparent manner and helps raise the international profile of the German Government’s commitment in this field. Within Germany too, public interest in Germany’s work in ICT for development has grown. This paper aims to provide information to the general public and improve cooperation and infor-mation sharing with institutions in the public and private sector.

> Collaborating with German development cooperation’s partners:

In many partner countries of German development cooperation, ICT is regarded as a key subarea of the

economy (e.g. support to the IT sector) and of society (use of modern technologies in all societal, private and political domains). In this context, this strategy paper can identify areas for collaborating with partners of German development cooperation and provide suggestions for meaningful measures (for example, by describing several case studies).

The following basic principles form the basis of German development cooperation’s contribution to the field of ICT:— liberalisation and regulation of tele-

communications markets— compensation for market failure— promotion of private-sector involvement — demand-oriented deployment of ICT— strengthening of local capacity


— promotion of knowledge sharing and the transfer of ICT know-how

— deployment of ICT across sectors to enhance effectiveness and efficiency

— promotion of the local IT sector through the deployment of ICT in projects

— coordination with measures implemented by other donors

— consideration of aspects such as the local context, interoperability, and the sustainability of measures

Besides creating enabling frameworks for accessing and using ICT, e.g. by promoting telecommunications regulation in partner countries, the s trategic fields of action for ICT measures of German development cooperation include: a comprehensive approach for

promoting local ICT sectors (among other things by funding ICT infrastructure and IT sector develop-ment in combination with strategic development, promoting clusters, training and continuing train-ing programmes for IT entrepreneurs, developing domestic markets, and promoting exports) as well as mainstreaming ICT into different areas of German development cooperation, such as the promotion of good governance and rural development.

This strategy paper contains a collection of case studies from different areas of German development cooperation. These examples demonstrate the degree to which Germany is involved in the area of ICT for development (ICT4D) and provide suggestions for potential areas where there are opportunities for its further deployment.


1. Status and relevance of information and communications technology (ICT) in development policy

The rapid development and increasing global distri-bution of modern information and communications technologies such as PCs, the internet, email and mobile phones have transformed the way economies operate and the way individuals, societies and states interact with each other. ICT is an essential instru-ment when it comes to reducing poverty, driving social and economic development and supporting democracy and good governance, education and health care. It enables better access to knowledge for sustainable development and opens up new ways of involving large swathes of the population in political decision-making processes.

Information and communications technology

Information and communications technology (ICT) encompasses all technical equipment and facilities that convert, process, save and transfer various types of information in digital form. It includes voice telephony, data communications and computer,

radio, television and similar technologies. Copper wires, fibre optics and a variety of wireless technolo-gies can be used for communications and for the exchange of data in this context.

There are any number of examples of how ICT can help support sustainable development in partner countries of German development cooperation. For example, mobile phones open up access for farmers and entrepreneurs to new sales and procurement markets. Fast, comprehensive word processing pack-ages can help considerably improve the availability and quality of services provided by state institu-tions and boost the productivity of companies. The internet allows schools and hospitals, for example, to access extensive data and a wide array of infor-mation. In addition to solely web-based media, an increasing number of traditional print media are

now also available online, and can be accessed via the internet and mobile devices. This expands reach particularly to population groups living in remote areas that previously only had limited access to information or could not actively engage in political processes.

The conditions for using ICT in developing countries have improved considerably over the last ten years. The price of hardware, network infrastructure and handheld devices has dropped significantly. Software that corresponds to the specific needs of develop-ing countries, and builds on free and open-source licenses, is becoming increasingly available.

Mobile phone technology in particular has brought about lasting change and has transformed ICT in developing countries into a highly dynamic sector. For example, the mobile phone penetration rate in developing countries had reached 70.1 per cent in 2010.1

1 International Telecommunication Union (2011): Measuring the Information Society 2011. Geneva, p. 2.

Needs-oriented, innovative business models and technological solutions such as mobile financial

services are increasingly being developed to meet growing demand among low-income users.2

2 UNCTAD (2010): Information Economy Report 2010, p. 7. BMZ/GIZ (2011): The Transformative Role of Mobile Financial Services and the Role of German Development Cooperation. Eschborn, 2011. Porteous, D and N. Wishart (2006): m-Banking: A Knowledge Map. infoDev/World Bank. Hughes, N. and S. Lonie (2007): M-PESA: Mobile Money for the Unbanked. In: Innovations, Winter/Spring 2007, Vol. 2, No. 1 – 2 p. 63 – 81 Services such as the ngpay’s ‘mobile mall’ in India offer access to a wide range of commercial products and services in any number of sectors from standard mobile devices.

Also, in developing countries in particular, it has been observed that internet content is increasingly being accessed on mobile phones. Although the rate of technological progress has been rapid and developing countries have been able to catch up in the area of mobile technology in particular, the distribution and use of ICT remains very unequal, and there is still a ‘digital divide’ at the global level.


Developing countries – particularly those in sub-Saharan Africa – a long way behind industrial-ised countries, despite the fact that ICT penetration rates are on the rise. Although the success of mobile phones has reduced the digital divide in terms of voice communications, in 2009 there were only 25 mobile phone contracts per 100 inhabitants in least developed countries, compared with 118.1 per 100 inhabitants in Germany. The gap is even wider when it comes to internet connections. Whereas in 2010, 71 per cent of the population in industrialised coun-tries used the internet according to the ITU, this fig-ure was just 9.6 per cent in Africa. There is a serious imbalance in terms of the affordability and availabil-ity of high-speed broadband internet connections.3

3 The ITU defines broadband as internet speeds of 256 kbit/s or higher. In 2007, the landline broadband penetration rate in Europe was 14 per cent, compared with 0.2 per cent in Africa. ITU (2009): The ICT Development Index, p. 4.

In 2010, the broadband penetration rate (connections per 100 inhabitants) in industrialised countries was 45 per cent, in contrast to less than 1 per cent in Africa. Whereas in Germany, a broadband internet connection cost about US-Dollar 40 or 1.1 per cent of the monthly per capita income in 2010,4

4 ITU (2011): Measuring the Information Society 2011, p. 72.

in Malawi, Ethiopia, Zimbabwe and Guinea it cost more than

ten times the average monthly per capita income to access the internet.5

5 Cf. ITU (2011): Measuring the Information Society 2011, p. 71.

Broadband internet connections are increasingly becoming the norm in industrialised countries, and are therefore a prerequisite for access-ing up-to-date applications and content on the web. This new ‘broadband divide’ therefore increasingly undermines development in partner countries.

In addition to the digital divide between developing and industrialised countries, there is also a digital divide between urban centres and rural areas within developing countries. The provision of telecommuni-

cations infrastructure and associated services (such as broadband internet connections) is usually more profitable in towns and cities than in the country-side. More cost-intensive and less financially attrac-tive rural regions often lag behind and have no or inadequate access to telecommunications infrastruc-ture. The situation is even more dramatic as regards the internet.

However, a lack of telecommunications infrastruc-ture and exorbitant prices are not the only factors that impact on the effective use of ICT. Among poor population groups in particular, there is a serious lack of the knowledge and expertise (literacy level, language skills and specific ICT know-how) required to maximise the potential of ICT. The growing com-plexity of ICT applications increasingly exacerbates this situation.

The ‘digital divide’ described above widens the gap in knowledge and education that already exists between developing and developed countries. This in turn

often results in a learning and innovation divide. Access to knowledge and the capability of leveraging this knowledge to develop innovative products, proc-esses and services is increasingly becoming a key pre-requisite for sustainable development. As a result of insufficient access to modern ICT along with the lack of expertise required to use it, a large number of peo-ple in developing countries cannot participate in glo-bal economic processes and in the knowledge society. This means that developing countries are increas-ingly trapped in a vicious circle. Inadequate access to modern ICT and a lack of expertise in its effective use mean that they cannot access knowledge and learn-ing resources that are increasingly being provided via modern ICT, particularly the internet, and that enable people to acquire the required know-how in the first place.


German development cooperation recognises the potential that ICT holds for development and is aware of the digital divide that still exists. It sees ICT as an area that can give people the ability to move out of material hardship and to determine and take

on responsibility for their own lives. In this way, the German Government’s development policy aims to help leverage the opportunities created by globalisa-tion for all.


0.0

0.5

1.0

1.5

high-income-economies

low- and middle-income-economies

2. Leveraging the potential of ICT for development

Modern ICT has drastically reduced the cost of communicating and interacting, and of obtaining, processing and storing information. As a result, ICT can play a major role in increasing the efficiency, effectiveness and transparency of measures and proc-ess flows. ICT also opens up new opportunities for large sections of the population to participate at the political, cultural and societal level.

Against the backdrop of the shift towards a globalised and knowledge-based world economy, the use of ICT has played a progressively more important role in implementing development strategies to achieve development goals. Many of our partner countries also acknowledge that ICT is key to their development and have already devised strategies to support affordable access to these technologies and their effective use.6

6 The majority of poverty reduction strategy papers in developing countries emphasise the importance of using ICT to help achieve development goals.

2.1 ICT diffusion boosts economic growth

A study conducted by the World Bank7

7 World Bank (2009): Information and Communications for Development 2009 – Extending Reach and Increasing Impact.

shows that

increasing the diffusion and use of ICT significantly boosts productivity and economic growth. The study found that in low and medium-income countries, in-creasing internet penetration by 10 percentage points will boost economic growth by about 1.12 percentage points.

The economic growth that can be generated by ICT is due to a number of factors. For example, technologies such as telecommunications, the internet and email significantly reduce the cost of communications, and stimulate lively exchange and interaction between individual actors. This improves the flow of informa-tion across economic sectors – from agriculture to

production and service industries. ICT also stream-

lines processes and transactions. What is more, it enables companies to tap into new procurement and consumption markets.8

8 This has been proven by econometric studies such as: Röller, L.- H. and L. Waverman (2001): Telecommunications Infrastructure and Economic Development: A Simultaneous Approach. In: American Economic Review 91 (4), 2001, 909 – 923. Sridhar, K.S. and V. Sridhar (2007): Telecommunications Infrastructure and Economic Growth: Evidence from Developing Countries. In: Applied Econometrics and International Development, Vol. 7 – 2, 2007, 37 – 61. Torero, M., K. C. Shyamal and S. B. Arjun (2006): Telecommunications Infrastructure and Economic Growth: A Cross-Country Analysis. In: M. Torero and J. von Braun (2006): Information and Communication Technologies for Development and Poverty Reduction, Washington D. C., Johns Hopkins University Press, 2006.

Growth Effect of ICT in percentage points

fixed

0.43

0.73

mobile

0.60

0.81

Internet

0.77

1.12

broadband

1.21

1.38

Source: Qiang 2009, Worldbank

Note: The y axis represents the percentage-point increase in economic growth per 10-percentage-point increase in telecom-munications penetration. All results are statistically significant at the one per cent level except for the figures for broadband in developing countries, which are significant at the 10-per cent level.

ICT also plays a key role in boosting the innovative capacity of economies that are becoming increas-ingly knowledge-based. Access to knowledge, the use of new technologies and the faster processing of data play a role here.

0.43

0.730.60

0.81 0.77

1.121.21

1.38


The main prerequisites for sustainable economic development are accessing knowledge and trans-forming this knowledge into innovative products, processes and services. Information and communica-tions technologies, particularly the internet, can play an important role in this context. In addition to the aspect of the availability of knowledge, ICT, like elec-tricity, is considered to be a general purpose technol-ogy that permeates all sectors of the economy. This means that the very use of ICT offers great potential for advancing technology, increasing productivity and reducing costs as well as stimulating product and process innovation. Another aspect is the ease with which data can be processed and distributed. As ICT allows large quantities of data to be quickly analysed and communicated over long distances, it can help forge new partnerships and create new information flows which in turn can lead to the development of new product variants and innovative organisational structures and workflows.

ICT can also open up new opportunities for certain population groups that were previously excluded from economic activity (for example, because of their gender, income, a disability or their remote location).

2.2 ICT pLayS a rOLE IN pOLITICaL parTICIpaTION aND DEMOCraTISaTION prOCESSES

Democracy is a form of government that affords all citizens political and civil freedom and the right to political participation. A parliamentary democracy is based on the principle of civil society being able to gather information, articulate its needs, and actively participate in the formation of political opinion and political decision-making processes at all levels. The media is part of a system of checks and balances and plays a paramount role in this context. Freedom of the press opens up access to information, fosters

diversity of opinion and promotes a culture of politi-cal pluralism and social dialogue.

Information and communications technologies, in particular the internet, enable large swathes of the population to access vast global knowledge and information resources. Mobile communications, internet portals, multimedia and online journal-ism (online versions of traditional print media as well as e-zines and blogs) offer new opportunities for exchanging information, and therefore promote the freedom of opinion and expression.9

9 UNESCO (2005): Towards knowledge societies. UNESCO World Report, p. 36ff.

ICT-ena-bled media open up scope for a free and pluralistic media landscape, which can promote freedom of the press. ’Social media’ (interactive, ICT-enabled networks such as blogs, Facebook or Twitter) have demonstrated in recent years that information and communication technologies can play a vital role in democratisation processes and societal change.

ICT can enhance the overall transparency of politi-cal processes and play an active role in enabling the

population to demand greater accountability from state institutions10

10 OECD-DAC-GOVNET (2011): Draft Discussion Paper International Support to Media Development: Context, Evidence, Challenges and Possible Strategic Principles. P. 4 point 14, Paris.

– even where there is censorship and repression.

Civil society organisations (CSOs), as active media-tors that represent society’s interests, are also par-ticularly reliant on well-functioning information and communications channels. An actively involved and well-organised civil society must be informed about political decisions, involved in decision-mak-ing processes and be able to carry out critical control functions. Modern ICT is therefore crucial to CSOs achieving their objectives and offers vast potential for a variety of different uses. It can enhance internal


CSO structures and improve their internal and exter-nal communications.11

11 Czornohus S., C. Friedland, S. Haffner, H. Ihne and W. Kandie (2006): Die Bedeutung von IKT für zivilgesellschaftliches Engagement am Beispiel von Nichtregierungsorganisationen (NRO) in Subsahara Afrika. (The importance of ICT for civil society engagement, taking NGOs in sub-Saharan Africa as an example). Study conducted on behalf of the German Bundestag.

What is more, ICT also has the potential to promote political participation particularly among popula-tion groups (such as women, people with disabilities and the poor) that have been excluded from politi-cal processes in the past. For example, mobile phone technologies – particularly when used together with increasingly popular online media – allow access to information in rural areas that previously could not be reached by traditional media. At the same time, they also enable population groups living in these areas to ‘find their voice’ at the national and even international level. This means that ICT can play a key role in em-powering the rural population who were previously excluded from participating in the information society.

2.3 ICT HELpS aCHIEvE SOCIOECONOMIC aND ENvIrONMENTaL DEvELOpMENT GOaLS

ICT is an essential component of fundamental reform and development programmes in the area of poverty reduction. It is also vitally important for achieving so-cioeconomic and environmental development goals in least developed countries as well, for two main reasons:

1. ICT has significantly reduced the cost of access-ing, exchanging and circulating information and thereby plays a key role in communication and in-teraction. It allows knowledge and information to be exchanged efficiently and effectively, irrespective of the distances involved.

2. ICT is an efficient tool for collecting, processing and storing information. ICT-generated, reliable data are crucial for monitoring and evaluating the results of political and development programmes. It also has a key role to play in optimising management processes in the public and private sector.

This means that in addition to providing knowledge and information, which improves people’s standard of living (for example by opening up access to and participation in value-added processes or by tapping into new ICT business areas), the different technolo-gies can be used in a number of ways to help reduce poverty and promote socioeconomic and environ-mentally sustainable development. The outcome document of the Rio+20 summit also refers to the importance of ICT for sustainable development. It specifically notes the role it plays in exchanging knowledge within the context of technical coopera-tion and capacity development. Special fields of ap-plication highlighted in the document include rural development, education, and improving the flow of information between government and civil society.12

12 Rio+20 (2012): The Future We Want: Rio+20 Outcome Document.

ICT applications can be broken down into three main categories: management information systems, e-learning applications and telecommunications services (mainly the internet and mobile communi-cation services), as described in greater detail below.

MaNaGEMENT INfOrMaTION SySTEMS

A management information system is a software or database application that systematically processes data. It can also be used to exchange and call up data. Management information systems facilitate process management and enable the fast and comprehensive exchange of information within organisations and


between organisations and individuals. They can therefore contribute in a variety of ways to achieving development goals in different sectors. In these sys-tems, ICT is used to collect and analyse data required to understand and respond appropriately to new and complex challenges in areas such as climate change and increasing environmental degradation. Manage-ment information systems provide data and analyses that pave the way for managing scarce natural re-sources such as rivers, lakes, forests and fish stocks more effectively.

Moreover, they can also be used as an efficient and effective tool in the area of good governance. e-government applications provide citizens with additional or improved services and information, for example regarding the source and use of public funds.

Health care and education are other sectors where management information systems and software applications already play an important role, and

will play an even greater role in future. Here, the systems help significantly improve the delivery of public services by providing the basis for using scarce resources more efficiently, streamlining administra-tive processes and improving the management of public institutions such as hospitals and universities.

E-LEarNING

ICT opens up new avenues for learning and provides valuable instruments for exchanging and manag-ing knowledge. ICT-supported distance learning approaches create new opportunities for further edu-cation and training, in the form of fully ICT-based applications (e-learning) and blended learning for-mats (combination of distance and classroom learn-ing). The main advantage of using ICT in this context is that learning content can, for the most part, be

made available at any time and in any place. ICT can play a significant role in improving basic education of girls and boys, vocational training and higher educa-tion. ICT-based distance learning university courses reduce the cost of education and improve access to lifelong learning. The use of e-learning instruments is not by any means restricted solely to the education sector. They can also be used to efficiently transfer knowledge in other areas, for example to train medi-cal professionals.

USING THE INTErNET aND DIGITaL KNOwLEDGE rESOUrCES

Modern information and communication technolo-gies, particularly the internet, are an efficient and effective means of increasing transparency in inter-action between government and the private sector. They give citizens an effective means of holding public representatives accountable for their actions. Moreover, ICT also opens up new avenues for part-

ner countries in their fight to identify, reduce and prevent corruption and mismanagement. In other words, it is an important tool in systematically im-plementing good governance.

The internet is increasingly becoming a key medium for accessing knowledge resources. It allows the pub-lic to access online databases of scientific research results, digital media publications and free training and learning resources. This makes the internet a crucial resource for improving education, particu-larly vocational and higher education and scientific research.

The internet also opens up new avenues for the private sector, particularly small and medium-sized enterprises (SMEs), by allowing them to tap into new procurement and sales markets and rapidly access in-formation on market conditions (e.g. current market


prices, trade standards and supply and demand for specific goods and services).

MOBILE TELECOMMUNICaTIONS

Telecommunications technologies can bridge even long distances quickly and cost-effectively. Mobile communications are particularly relevant in this context, as they offer enormous potential for im-proving the connectivity of previously disadvan-taged population groups or those living in rural areas.

For example, mobile technologies can open up access to education content (through mobile learning), to financial services and to microinsurance. They also enable expertise such as a medical diagnosis to be made available in remote areas where services through traditional channels are either inadequate or not available.

In many countries, mobile technologies (such as GSM and WiMax) are the key technologies used to access the internet. An increasing number of internet appli-cations are also being developed above all at the local level, in order to cater for the limited bandwidth and capacity of mobile phones.13

13 World Bank (2012): Information and Communications for Development 2012: Maximizing Mobile, p. 12f.

Landline connections and PCs often play a secondary role in developing countries.

2.4 ICT appLICaTIONS INCrEaSE THE EffECTIvENESS Of DEvELOpMENT COOpEraTION

Aid Management Platform

The Development Gateway Foundation set up the Aid Management Platform (AMP) together with the Organisation for Economic Co-operation and Devel-opment (OECD), the World Bank and the Ethiopian Government. The AMP, which is partly funded by German development cooperation, is a web-based tool that helps map the project landscape, imple-ment, manage and evaluate projects, draft reports, and track the use of funds.

The AMP enables governments to:— manage aid programmes and activities— monitor and evaluate impacts — harmonise aid activities with national planning

objectives

— coordinate events with donors— manage documents electronically— create reports and— reduce transaction costs

According to Ranil Dissanayake, economist at the Ministry of Finance in Malawi, the AMP has helped to significantly improve the effectiveness of aid in Malawi: ‘With the Aid Management Platform, this is the first time we feel we are getting exactly what we need and what we asked for.’ (Source: http://www.de-velopmentgateway.org/programs/aid-management-program/aid-management-platform)

ICT makes an important contribution to increasing the effectiveness of development cooperation. In the 2008 Accra Agenda for Action, developing countries and donors underline their commitment to improv-

http://www.developmentgateway.org/programs/aid-management-program/aid-management-platform


ing information systems in developing countries, in order to improve results orientation (‘managing for results’). Another area highlighted in the agenda is that of improving the quality of political concepts and their implementation.14

14 3rd High Level Forum on Aid Effectiveness (2008): Accra Agenda for Action, p. 5.

The 2011 Busan declara-tion on aid effectiveness reaffirms these goals.15

15 High Level Forum on Aid Effectiveness (2011): Busan Partnership For Effective Development Co-Operation, p. 6f.

ICT is also a driving force in disseminating information and using reliable data. Key objectives of the Busan declaration include the establishment of common

open standards for the electronic publication of comprehensive information on donor contributions. Other objectives outlined in the Busan declaration also stand to benefit from the potential that ICT can unleash, for example, in strengthening structures in partner countries in the areas of public financial management systems, donor coordination and moni-toring and evaluation activities.

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3. ICT for development – challenges

Using ICT in development cooperation can play a critical role in driving sustainable development and help reduce poverty. However, the following chal-lenges must be taken into account in order to ensure that the full potential of ICT can be unleashed:

> The availability and price level of telecommuni-cations services depend to a large degree on statu-tory provisions and other regulatory conditions. The effectiveness of these regulations for the tele-communications sector depends to a large degree on the HR capacity of the responsible public insti-tutions (such as national regulatory authorities) and on the corresponding national institutional frameworks (for example, actual enforcement of legislation and contracts and corruption). Regula-tory frameworks and measures are usually not universally applicable and must therefore be tailored to the specific country context.

> The use of ICT requires a reliable electricity sup-ply, which is often not the case in many coun-

tries, particularly in rural and remote areas.

> Investment in making ICT sustainably available to previously excluded groups (e.g. telecentres in rural regions) must be based on a sound business strategy or have a long-term source of funding.

> Given the high demand for ICT specialists in-ternationally, ICT professionals – from telecom-munications regulation experts to experts in IT processes, programmers and technicians – have a high market value. ICT specialists in develop-ing countries are therefore often drawn to work for leading, city-based companies in the private sector or to migrate to countries with higher wage levels. Local ICT experts who are trained for development cooperation projects therefore tend to have high occupational mobility and are difficult to replace.

> Sophisticated ICT applications such as e-government solutions should be planned as an integral part of a comprehensive reform project rather than as a purely technological project. Otherwise they are prone to failure despite meeting technical requirements. For example, they may not fulfil institutional conditions (due to resistance from staff mem-bers or unsuitable institutional structures).

> In many countries, maintenance standards are low and there is a lack of financial resources to protect ICT applications from malware such as viruses and worms. A lack of investment in IT security can significantly reduce the sustain-ability and effectiveness of ICT measures.

> As the availability of ICT widens, so too does the problem of disposing of e-waste. To date, e-waste has played a minor role in ICT projects. However, to prevent it from escalating, ICT measures should consider the end-of-life of

technical equipment and develop suitable solutions.

> Finally, there is a risk that ICT applications will be used for ethically or morally questionable purposes. Repressive and undemocratic gov-ernments could use ICT as an effective means of controlling and repressing civil society and suppressing democratic debate. Furthermore, authoritarian regimes can use ICT to monitor the expression of political opinions and identify the people responsible. User-specific data can easily be collected if security measures have not been implemented or if indeed the state is responsible for the misuse.

The challenges outlined above must be faced head-on, if development policy measures to support the use of ICT are to be sustainable in the long term.


4. ICT in German development cooperation

Together with the United Kingdom, Germany is the third-largest ICT market, after the USA and Japan. The German ICT industry employs more than 800,000 people with a further 650,000 experts work-ing in user industries. ICT is the main driver of inno-vation. Germany is one of the world’s leading export nations for hi-tech products and over the years it has developed numerous pioneering innovations in the field of ICT. The first fax network was set up in 1910 in Berlin, where the precursor to the first PC was also developed in the 1930s. German companies played a key role in developing the Global System for Mobile Communications (GSM) and the Universal Mobile Telecommunications System (UMTS), and indeed in drafting the MP3 standard.

In 2010, the German Government also developed the ICT strategy ‘Digital Germany 2015’16

16 German Federal Ministry of Economics and Technology (BMWi – 2010); ‘ICT Strategy of the German Federal Government: Digital Germany 2015’.

in order to further leverage the potential ICT offers for growth and employment in Germany.

As ICT impacts on a wide range of sectors that drive development, German development cooperation aims to provide the required resources and build relevant capacities in partner countries to fully lever-age the potential offered by ICT.

4.1 INTErNaTIONaL OBLIGaTIONS

International agreements such as the Millennium Development Goals (MDGs) provide a guideline for German development cooperation in the field of ICT, as do the objectives outlined at both of the UN World Summits on the Information Society and by the Accra Agenda for Action.

> Millennium Development Goal 8 (MDG 8) aims to develop a global partnership for develop-ment, among other things to:

‘Incooperationwiththeprivatesector,makeavailablethebenefitsofnewtechnologies,especiallyinformationandcommunications’.

> Among other things, the Tunis Commitment and the Tunis Agenda for the Information Society adopted at the second World Summit on the Information Society in 2005 highlight the following:

‘We recognize the scale of the problem in bridging the digital divide, which will require adequate and sustainable investments in ICT infrastructure and services, and capacity build-ing, and transfer of technology over many years to come.’17

17 Tunis Agenda for the Information Society, paragraph 8. See http://www.itu.int/wsis/docs2/tunis/off/6rev1.html

‘We reaffirm our desire to build ICT networks and develop applications, in partnership with the private sector, based on open or interoper-able standards that are affordable and accessible to all, available anywhere and anytime, to any-one and on any device, leading to a ubiquitous network.’18

18 Tunis Commitment, paragraph 28. See http://www.itu.int/wsis/docs2/tunis/off/7.pdf

In the Accra Agenda for Action from 2008 and the Busan Partnership Agreement from 2011, develop-ing countries and donors committed to improving developing countries’ information systems, in order to improve results orientation (‘managing for results’). Other areas highlighted in the agenda include im-proving the quality of policy design, implementation

http://www.itu.int/wsis/docs2/tunis/off/6rev1.html

http://www.itu.int/wsis/docs2/tunis/off/7.pdf


and assessments.19

19 3rd High Level Forum on Aid Effectiveness (2008): Accra Agenda for Action, p. 5. High Level Forum on Aid Effectiveness (2011): Busan Part-nership For Effective Development Co-Operation, p. 5.

The Accra Agenda for Action also calls for country-specific systems to be strengthened, including systems for public financial management, procurement, auditing, monitoring and evaluation and social and environmental impact assessments. The Busan Partnership also agreed the establishment of a common open standard for the electronic publi-cation of timely, comprehensive and forward-looking information on resources provided through develop-ment cooperation.20

20 High Level Forum on Aid Effectiveness (2011): Busan Partnership For Effective Development Co-Operation, p. 6f.

4.2 STraTEGIC apprOaCH Of GErMaN DEvELOpMENT COOpEraTION IN THE fIELD Of ICT

4.2.1 prIOrITy arEaS aND prINCIpLES

In view of the importance of ICT for driving sustaina-ble development in general and for achieving existing international commitments, German development cooperation supports ICT in developing countries within the scope of both bilateral and multilateral cooperation.

Overall, the activities pursued by multilateral organisations such as the EU, the World Bank or multilateral development banks to establish struc-tural and institutional conditions for using ICT (e.g. expanding electricity networks, education) and to provide information and knowledge as a global public good are held in high regard. Through its contribu-tions to the EU budget and to the budgets of multilat-eral development banks and UN organisations such as the International Telecommunication Union (ITU) or the United Nations Educational, Scientific and

Cultural Organization (UNESCO), German develop-ment cooperation provides funding for actors that play a key role in opening up access to ICT and bridg-ing the digital divide internationally.

For many years, German development cooperation has supported multinational initiatives in the field of ICT. Up to 2011 for example, it provided more than Euro 1.8 million to the World Bank’s Information for Development Program (InfoDev), which develops comprehensive knowledge resources on ICT and makes them available as a public good. BMZ is also a founding member and long-term proponent of the Development Gateway (DG), which offers internet-based solutions such as the Aid Management Plat-form and AidData Mapping. These solutions build the administrative capacity of partner governments and help harmonise the activities of the donor commu-nity with national policies.

Access to and the use of telecommunications (such as communications services and the internet) is effective and sustainable provided that telecommunications markets are liberalised, yet adequately regulated. Within the scope of bilateral cooperation with part-ner countries, German development cooperation therefore focuses on supporting partner countries, particularly in sub-Saharan Africa, in their efforts to establish well-regulated telecommunications, which in turn will create an enabling environment for the use of ICT.

In addition, German development cooperation sup-ports its partner countries in developing institutional capacity in a targeted and needs-oriented manner. The German Federal Government also supports ICT sector development and provides financial and tech-nical assistance for using ICT solutions to achieve en-vironmental and socioeconomic development goals.


The underlying principles of German development cooperation’s bilateral contribution in the field of ICT are:

1. Open, yet adequately regulated ICT markets can provide effective and sustainable access to and use of ICT.

2. Development cooperation supports partner countries’ efforts to compensate for ICT mar-ket failure and to maximise the social and economic benefits of ICT.

3. Development cooperation supports part-ner countries’ efforts to provide an enabling environment and to extend private sector involvement in the ICT markets of developing countries.

4. Development cooperation promotes the development of demand-driven local ICT-based innovations in partner countries.

5. Development cooperation strengthens local capacity to successfully use ICT in order to achieve long-term development goals across sectors.

6. Development cooperation supports the exchange of knowledge between different countries and sectors as well as the exchange of ICT know-how.

7. Development cooperation supports the use of ICT in different sectors, in order to improve the efficiency of measures and boost the effective-ness of development cooperation in general.

8. Incorporating ICT into development coopera-tion measures is an effective way of building local ICT capacity, establishing ICT sectors in partner countries and sustainably strengthen-ing countries’ own systems.

9. Bilateral support for ICT complements national ICT programmes implemented by partner countries and bolsters the commitment of other donors in this area.

10. ICT applications supported by development cooperation must be geared to the local context, meet the relevant interoperability criteria and be sustainable.

4.2.2 STraTEGIC fIELDS Of aCTION

aN ENaBLING ENvIrONMENT fOr ICT

Permanent access to telecommunications infrastruc-ture and services should be possible for all sections of the population at affordable prices. This applies above all for poor and disadvantaged population groups and people living in rural and remote regions. Universal access/service policies must also take special needs into consideration (for example, ICT services must meet specific requirements to cater for people with disabilities). It has become clear that liberalised and privatised markets can play a major role in supply-ing the population with ICT. Above all, the success of mobile communications in Africa has proven that the diffusion of telecommunications is particularly effec-tive and sustainable when it is driven by private in-vestment in liberalised telecommunications markets with a solid legal and regulatory framework.21

21 World Bank (2008): Global Economic Prospects 2008: Technology Diffusion in the Developing World. p. 53, 71.


Although telecommunications markets in most developing countries are already liberalised and privatised to some degree,22

22 ITU (2011): Trends in Telecoms – ICT Market Overview. Link: http://www.itu.int/net/itunews/issues/2011/03/04.aspx

a general lack of well-functioning competition can be observed here, mainly for two reasons: Firstly, the telecommunica-tions sector usually requires large-scale infrastructure investment. Secondly, the availability of the frequen-cies that mobile communications services need to operate is limited. As a result, only a limited number of companies can operate in the market, and this in turn restricts competition. Individual providers may then abuse their market power by demanding exorbi-tant prices or driving competitors from the market.

It has also been observed that even in competitive markets, it is not always guaranteed that all sections of the population have universal and affordable access to telecommunications. This is particularly the case in low-income rural areas with low population density where high costs mean that these services are not profitable for telecommunications providers. As a result, service providers tend to focus on the more profitable urban centres, at the expense of rural areas.

State intervention in the form of adequate regulation of the telecommunications sector is required, in order to optimise the potential of a liberalised, privatised market. The general conditions for a well-functioning market must also be in place and incentives must be created for private-sector investment, in order to im-prove access to modern telecommunications services (such as voice communications, the internet and email). Improving access to high-speed broadband internet connections is particularly important in this context.

Regulating telecommunications markets requires expertise and capacities that many governments in developing countries have not yet acquired to a suf-ficient degree. The ICT sector is also very dynamic, innovative and fast-paced. Therefore, the regulatory framework must constantly be adapted to new devel-opments.

Transposing a regional framework into national legislation and regulating telecommunications in Sierra Leone and Benin

In cooperation with the International Telecommu-nication Union (ITU), German development coop eration supported the Governments of Benin and Sierra Leone in integrating the ‘ECOWAS Supplementary Acts on the Harmonization of Policies and of the Regulatory Framework for the ICT Sector’ into national legislation.

This legal framework aims to create a harmonised ICT market in ECOWAS member states. Local and international experts assisted the institutions re-sponsible for ICT policy and regulation in Benin and Sierra Leone in transposing the complex system of rules and standards into national legislation.

Against this backdrop, German development coop-eration supports partner countries’ efforts to create an enabling environment for the telecommunications sector. The German contribution includes instru-ments of financial and technical cooperation. Inputs range from policy and legal advice to the develop-ment of institutional capacity and training courses for staff at regulatory authorities. Support is also provided for south-south dialogue between partner countries on regulating the telecommunications sector.

http://www.itu.int/net/itunews/issues/2011/03/04.aspx


The German contribution is demand-oriented and complements other development cooperation meas-ures. It is also coordinated with ongoing projects sup-ported by UN organisations, development banks and other bilateral donors.

BMZ provides support to partner countries in:

> creating an enabling policy, legal and regulatory environment for a transnational and regional telecommunications infrastructure;

> developing regulatory measures to safeguard affordable access to telecommunications in-frastructure for population groups that were previously excluded from these services;

> adjusting the regulatory framework to new challenges posed by latest technology develop-ments (e.g. mobile banking, broadband mobile technologies, and convergence of TV, the inter-net and voice telephony);

> ensuring that ICT infrastructure, IT applications and data are secure.

ICT SECTOr DEvELOpMENT

German development cooperation supports partner countries in creating a local ICT sector that is private-sector oriented. It aims to help these countries build the local ICT sector, enabling it to offer ICT services and drive innovative ICT-based solutions for state institutions, private-sector companies and consumers in developing countries. German development coop-eration also works with international organisations in this context. The United Nations Conference on Trade and Development (UNCTAD), for example, has in recent years placed greater emphasis on the private sector and ICT in its annual Information Economy

Reports and has expanded its cooperation with BMZ and with German implementing organisations in this area.23

23 UNCTAD (2010): Information Economy Report 2010 – ICTs, Enterprises and Poverty Alleviation and UNCTAD (2011): Information Economy Report 2011 – ICT as an Enabler for Private Sector Development.

To promote the IT sector, German development cooperation offers equity and borrowed capital to telecommunications infrastructure providers for their start-up phase, paving the way for increased availabil-ity of ICT. It also helps establish a local IT sector that can offer ICT services by supporting the drafting of cross-cutting sector development strategies to expand the sector, developing industry associations and local IT clusters, providing further education and training to IT specialists and IT companies, and promoting the development of a domestic market as well as the expansion of export markets.

Financial support for a mobile operator in Ghana

German development cooperation helped expand the telecommunications network in Ghana through equity financing. Thanks to the investment, the operator has been able to expand the existing telecommunications network, and to invest in the hauling of a new fibre-optic cable network that allows increased use of the internet. The project directly created about 1,700 jobs in Ghana and gener-ated about Euro 15 million tax revenues per annum.

Financing ICT infrastructure

Demand for private investment in infrastructure in developing countries is high, and is partly met by private-sector investors providing equity and borrowed capital. This affects telecommunications


infrastructure providers during the critical start-up phase in particular. To meet this demand, German development cooperation offers long-term financing (in the form of loans and equity) to telecommunica-tions infrastructure and service providers. This makes an important contribution to generating added eco-nomic value at the local level, which in turn increases government revenue and creates and safeguards jobs.

Through its development finance institutions, German development cooperation provides the following inputs: > funds for private-sector investment in partner

countries and mobilisation of additional part-ners and capital for investment projects

> long-term equity and loans with matching maturities to protect cofinanced investment projects against instability and crises

> support for pioneer investors in new countries and regions.

IT sector development

> Strategy developmentPartner countries are assisted in drawing up IT sec-tor development strategies. Strategy development brings together all relevant stakeholders, in order to define policies, measures and activities to strengthen the (international) competitiveness of the local IT industry.

However, many partner countries lack well-estab-lished structures to develop strategies as well as com-petent institutions/organisations to implement them, and German development cooperation can offer the expertise and support needed.

> Support for IT clusters and industry associations

German development cooperation sees the estab-lishment of industry associations and clusters as a key component of a well-functioning IT sector. Associations and clusters allow IT companies, many of whom are micro-enterprises, to cooperate with each other, consolidate their market power and defend their interests.

Promoting the international competitiveness of the Macedonian IT/software industry

Since 2008, German development cooperation has helped Macedonia to develop exports in the IT/soft-ware industry. In addition to drafting a comprehen-sive export development strategy in the IT industry, efforts have focussed above all on further developing the Macedonian IT cluster through the Macedonian Association of Information Technology (MASIT). In this context, specific export-oriented services were anchored in MASIT and a training academy offering export-oriented training courses to IT enterprises was set up.

Support provided to set up, further develop and globally connect these IT clusters and IT industry associations enhances the overall competitiveness of SMEs in the IT sector. This promotes cooperation between the individual enterprises and with state and scientific institutions. German development cooperation also advises on organisational structures, business management and service portfolios of clusters/associations.

> Capacity development for local IT companiesIt is becoming increasingly important for IT com-panies to develop solutions and offer services that are tailored to local needs, and these solutions and


services are becoming a growing component of sustainable development. Having software and dig-ital content in local languages deserves particular mention here as this is a crucial factor if ICT solu-tions and services are also to meet the needs of the poorest sections of the population (‘base of the pyramid’), which are increasingly regarded as an unserved market.24

24 Three billion people live on less than US-Dollar 2 a day; one billion have up to US-Dollar 8. Together, these two groups form the base of the global income pyramid. They use most of their income to buy food, clothing and fuel and have little left over for other expendi-ture. They only buy small quantities and can rarely choose between providers, which means that they pay higher prices than wealthier customers – a phenomenon known as the ‘poverty penalty’. Together however, these four billion people have purchasing power that is estimated at US-Dollar 5 trillion (‘The Next Four Billion’, International Finance Corporation / World Resources Institute 2007;

Link: http://www.wri.org/publication/the-next-4-billion).

Creating business and learning opportunities with free and open source software in Africa

In cooperation with the Free Software and Open Source Foundation for Africa (FOSSFA), German development cooperation develops the capacity of SMEs working in the field of ICT, to enable them to use free and open source software (FOSS). It aims to encourage the growth of African IT companies, particularly in southern and eastern Africa through activities in three areas: disseminating FOSS-based business models, promoting FOSS certification and supporting innovative local FOSS applications for social and economic development.

Local experts play a key role in operating, upgrad-ing and troubleshooting complex ICT applications to safeguard their long-term sustainability. Free and open source software (FOSS) is available to users with-out paying licence fees and grants them the right to use, change, localise and improve the software. FOSS

is becoming increasingly important in developing countries, where it opens up new business opportuni-ties for IT entrepreneurs. Together with the global ‘open source movement’ which is currently gaining momentum, FOSS offers new long-term resources for local ICT-based processes and product innovations.

German development cooperation offers comprehen-sive capacity development measures for SMEs work-ing in the field of ICT. These include:

> Courses to train entrepreneurs to leverage to a greater degree the potential that FOSS offers as a key medium for local innovations and low-cost solutions for sustainable development. Inputs include advanced training on FOSS programming, FOSS business development training and measures to support continu-ous exchange of experience at the national and regional level and to promote south-south dialogue.

> Training courses use freely accessible, localised training material, e-learning and twinning elements as well as support from local centres of excellence for multipliers and cooperation networks. Capacity development in the area of ICT is a critical pillar of a future-oriented strat-egy to promote innovation and technology in development cooperation.

> Domestic market developmentDomestic markets represent a business opportunity that has not yet been sufficiently exploited by IT companies in developing countries.

On the one hand, ICT applications can be provided as a service for many other economic sectors. Local IT companies are tuned into their customers’ needs much more than large international companies, for

http://www.wri.org/publication/the-next-4-billion


example, and have a better understanding of the local language, culture and customs. Local providers are also usually more cost effective and more customer- oriented. Developing, maintaining and operating localised IT products offers great potential for the IT industry and a number of benefits for end-user sectors.

On the other hand, the public sector is also a potential large-scale client. In developing countries, large-scale ICT contracts are primarily awarded by the state. Better integration into public procurement processes can also offer local SMEs a myriad of opportunities. However, these processes must be designed so that they can be accessed by local SMEs working in the field of IT. Transparent criteria and standards for pub-lic procurement and the certification of the SMEs’ IT expertise are important prerequisites.

German development cooperation assists state insti-tutions in partner countries in drafting public tenders for IT products and services so that local SMEs can participate successfully. In its ICT strategy ‘Digital Germany 2015’, the German Government stresses the importance of open standards and interoperability,25

25 Cf. BMWi (2011): ICT-Strategy of the Federal Government: Digital Germany 2015. p.7.

two aspects that also play a key role in German de-velopment cooperation with partner countries in the area of ICT. German development cooperation also helps local SMEs operating in the field of IT to iden-tify business opportunities in the public sector and in other areas (‘matchmaking’).

> Export promotionThe export of IT services offers great business poten-tial for SMEs in partner countries that specialise in the area of IT. This means that export promotion is an important area in IT sector development. Export

promotion is a key driver of the IT industry and can safeguard income and create employment. Through increased technology exchange at international level, it can also boost the innovativeness of local SMEs that specialise in IT. Promoting IT exports can also accel-erate the integration of developing countries into glo-bal markets and value chains. German development cooperation supports export promotion for example by conducting potential and market analyses to im-prove the baseline data available to policy-makers and by advising on the development and implemen-tation of comprehensive export strategies.

e-government in Ghana: Transparency of payment flows in the extractive industries

As part of the Extractive Industries Transparency Initiative (EITI), German development cooperation supports the process of making sure that state revenue from the extractive sector in Ghana is transparent.

Through a development partnership, the programme was complemented by setting up an IT-based solution to collect data and monitor payment flows of extractive commodities. The IT solution was in-troduced in order to accelerate data collection and simplify reporting. Since reports will be available to the administration, politicians and the general public faster than before, open debates on public revenue streams will be facilitated.

The new system also allows reasons to be identified if extractive companies fail to make payments or if any other irregularities occur. This increases trans-parency and improves the investment environment, because transparent publications on money flows send out the signal to potential investors that the Ghanaian Government is committed to accountability.


USE Of ICTS IN GErMaN DEvELOpMENT COOpEraTION prOJECTS aND prOGraMMES

ICT can play an important role in achieving devel-opment goals in the different sectors supported by German development cooperation. These include good governance, education, health care, environ-mental protection, financial systems development and economic and private sector development. The following section describes two examples of ICT deployment in greater detail.

ICT and promoting good governance

Promoting access to ICT is an important field of activ-ity within the scope of promoting good governance, for example.26

26 BMZ Strategies 178 Promotion of Good Governance in German Development Policy, 2009.

e-government applications increase the transparency of government actions, improve commu-nication between individual institutions and facilitate communication between the government and citizens. Thus, they advance constructive relations between the state and society. German development cooperation assists partner countries in developing and implement-ing e-government strategies. ICT can also play a key role in increasing the transparency of public revenue and mobilising endogenous resources.

‘New’ or ‘social’ media enable people to publish their own documents, images, sound and video clips inde-pendently of traditional media, which can often be con-trolled by the government. It allows people who were previously excluded from political debate to participate and to form their own opinion.

ICT and rural development

Using ICT in different areas of rural development is yet another example of how it can be incorporated into development cooperation. Market information systems that can be accessed online or via text mes-sage enable farmers to choose better sales outlets and delivery times or shape negotiations with inter-mediaries.

Text messaging services, hotlines and websites in local languages can circulate information about new cultivation methods (which could be combined with measures to address climate change adaptation) or about pest control. Electronic data collection on harvests at all levels of processing ensures that agri-cultural produce is traceable. It sets the stage for the certification of organic foods, for example, which in turn generates higher prices for farmers. In general, the use of ICT to communicate and collect data in-creases market transparency, optimises value and supply chains and facilitates quality control.

German development cooperation enables partner institutions in developing countries to introduce and use ICT applications, in order to effectively im-plement reforms and achieve development goals. Through technical cooperation organisations and institutions, German development cooperation sup-ports know-how transfer in the field of ICT capacity development at the international and regional levels and across sectors.

Measures to develop capacity for using ICT are in-corporated into programmes where ICT is seen to offer potential for achieving targeted development goals in the priority areas of German development cooperation. As a result, the development of institu-tional capacity is an integral component of technical cooperation projects and programmes in partner countries. In this context, capacity development in


the ICT sector is viewed as a comprehensive approach that encompasses technological aspects (hardware, software, IT security, maintenance etc.) and non-technological aspects such as shaping an enabling environment and organisational development meas-ures (covering the legal and institutional framework, training for managers, professionals and users, and modification of information flows and administra-tive processes etc.) This includes support for buying equipment such as PCs and servers as well as HR development measures in areas like using, maintain-ing and developing ICT solutions.

Using ICT to promote the integration of cashew farmers in Ghana into the value chain

As part of a development partnership, cashew farmer cooperatives were provided with ICT applications and trained in how to use them. The measure aimed to enable small-scale farmers to increase their produc-tivity and work together transparently and profes-sionally with established companies.

An electronic registration system for cashew nut deliveries also ensures traceability of the commodity (which could lead to organic or Fairtrade certification in the future) and provides individual delivery records (which could increase farmers’ credit-worthiness).

COOpEraTION wITH THE prIvaTE SECTOr IN THE ICT SECTOr

The ICT sector is dynamic, innovative and character-ised by rapidly changing products. It crucially builds on the expertise and commitment of the private sector. The private sector plays a key role in providing telecommunications services to the general public, as already described in greater detail in the section on telecommunications regulation (see above). Develop-ment cooperation measures also offer a great deal of potential for involving local and international players from the private sector.

Within the scope of IT sector development, it is vital that private-sector actors be involved at an early stage, in order to ensure that projects and programmes are geared to the needs of local enterprises, and ensure long-term success. Public-private dialogue forums are a tried-and-tested method in this context. Here with support from German development cooperation, representatives from the public and private sector, but also from universities, research institutions and civil society, can create new solutions together.

Development partnerships with the private sector are another instrument that BMZ uses to support business initiatives by European-based companies that work towards achieving development goals. Introducing and promoting technology innovations (including ICT-based applications) in partner countries form a key part of these efforts. Thus, technological innova-tions or procedural improvements through ICT, in col-laboration between development cooperation and the private sector, can be sustainably leveraged for people in our partner countries.


CaSE STUDIES

e-health in NepalBMZ supports Nepal in improving its pharmaceutical drug supply. As part of this initiative, the programme on basic health care provision sets up a demand-oriented Health Management Information System (HMIS) that includes automatic drug ordering and a constantly updated inventory. This helps ensure that hospitals have sufficient drug supplies and that medical equipment is well maintained. The HMIS is flanked by management software (PLAMAHS) which monitors the awarding of contracts for the preventa-tive maintenance of medical equipment to companies in the private sector. Measures include staff training on using and customising PLAMAHS.

e-government in Tanzania: Tax collection and administrationThe integrated Tax Administration System (iTAX) is a computerised software application that assists tax authorities in collecting and managing taxes. It was developed together with the Tanzanian tax author-ity as part of a German development cooperation project. iTAX helps ensure that taxes are collected and managed transparently, efficiently and fairly. It cuts through red tape and simplifies administra-tive processes for tax payers. This in turn improves tax compliance and increases tax returns. Increased transparency also boosts the legitimacy of the gov-ernment’s taxation system. Implementing iTAX helped increase Tanzania’s monthly tax intake from US-Dollar 25 million in 1996 to US-Dollar 300 million in 2007.

Water sector reform in ZambiaThe introduction of an ICT-based water supply and sanitation information system by the National Water Supply and Sanitation Council, with the support of German development cooperation, showed that the water supply rate estimated in urban areas was too high. Accurate figures allowed the strategy for achiev-ing the Millennium Development Goal relating to water supply and sanitation to be adjusted, making it possible to use funds more effectively.

ICT and e-learning management in vocational training in Arab countriesIn Arab countries, vocational education and train-ing (VET) institutions face a number of challenges. They must satisfy demand in the private sector for a wide range of industry-specific IT expertise and also integrate ICT into their organisational structures and pedagogical approaches. The programme ‘ICT and e-learning management in vocational training’ assists in building the capacity required to develop ICT-based training content. It gives equal consideration to both aspects – technological expertise (hardware infrastructure, software) and methodological and pedagogical know-how.


e-government in Ghana: Transparency of payment flows in the extractive industries (examplealsoprovidedindocument)As part of the Extractive Industries Transparency Initiative (EITI), German development cooperation supports the process of making sure that state revenue from the extractive sector in Ghana is transparent.

Through a development partnership, the programme was complemented by setting up an IT-based solution to collect data and monitor payment flows of extrac-tive commodities. The IT solution was introduced in order to accelerate data collection and simplify reporting. Since reports will be available to the ad-ministration, politicians and the general public faster than before, open debates on public revenue streams will be facilitated.

The new system also allows reasons to be identified if extractive companies fail to make payments or if any other irregularities occur. This increases transparency and improves the investment environ-ment, because transparent publications on money flows send out the signal to potential investors that the Ghanaian Government is committed to accountability.

Transposing a regional framework into national legislation and regulating telecommunications in Sierra Leone and Benin(examplealsoprovidedindocument)In cooperation with the International Telecom-munication Union (ITU), German development cooperation supported the Governments of Benin and Sierra Leone in integrating the ‘ECOWAS Supple-mentary Acts on the Harmonization of Policies and of the Regulatory Framework for the ICT Sector’ into national legislation.

This legal framework aims to create a harmonised ICT market in ECOWAS member states. Local and inter-national experts assisted the institutions responsible for ICT policy and regulation in Benin and Sierra Leone in transposing the complex system of rules and standards into national legislation.

Financial support for a mobile operator in Ghana (examplealsoprovidedindocument)German development cooperation helped expand the telecommunications network in Ghana through equity financing. Thanks to the investment, the operator has been able to expand the existing tel-ecommunications network, and to invest in the haul-ing of a new fibre-optic cable network that allows increased use of the internet. The project directly cre-ated about 1,700 jobs in Ghana and generated about Euro 15 million tax revenues per annum.

Promoting the international competitiveness of the Macedonian IT/software industry(examplealsoprovidedindocument)Since 2008, German development cooperation has helped Macedonia to develop exports in the IT/soft-ware industry. In addition to drafting a comprehen-sive export development strategy in the IT industry, efforts have focussed above all on further developing the Macedonian IT cluster through the Macedonian Association of Information Technology (MASIT). In this context, specific export-oriented services were anchored in MASIT and a training academy offering export-oriented training courses to IT enterprises was set up.


Creating business and learning opportunities with free and open source software in Africa (examplealsoprovidedindocument)In cooperation with the Free Software and Open Source Foundation for Africa (FOSSFA), German development cooperation develops the capacity of SMEs working in the field of ICT, to enable them to use free and open source software (FOSS). It aims to encourage the growth of African IT companies, particularly in southern and eastern Africa through activities in three areas: disseminating FOSS-based business models, promoting FOSS certification and supporting innovative local FOSS applications for social and economic development.

Using ICT to promote the integration of cashew farmers in Ghana into the value chain (examplealsoprovidedindocument)As part of a development partnership, cashew farmer cooperatives were provided with ICT applications and trained in how to use them. The measure aimed to enable small-scale farmers to increase their produc-tivity and work together transparently and profes-sionally with established companies.

An electronic registration system for cashew nut deliveries also ensures traceability of the commodity (which could lead to organic or Fairtrade certification in the future) and provides individual delivery records (which could increase farmers’ credit-worthiness).


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World summit on the information society (2005)Tunis Commitment, http://www.itu.int/wsis/docs2/tunis/off/7.pdf

http://www.itu.int/wsis/docs2/tunis/off/6rev1.html

http://www.itu.int/wsis/docs2/tunis/off/7.pdf

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