SUMMARY OF CHANGES In addition to minor editorial changes, the following modifications have been made to document in response to the comments and guidance received from the Board at the informal meeting on the subject matter on 9 September 2008. Executive Summary 1. Para. 3: This paragraph has been added to establish the contribution of ICTs to poverty reduction

and economic growth 2. Para. 5: Short term is now defined as 24 months 3. Para. 6: This paragraph has been added to stress Bank Group ICT intervention in the medium term

within the context of the value chain 4. Para. 7: The first sentence has been modified to highlight the nature, functions and reporting

relationships of the Focal Point Section 1: Context and Rationale 5. Para. 1.8: Investment estimate for international submarine fiber network and regional links has

been added

Section 2: ICT in Africa: Current Players and Bank Positioning

6. Para. 2.3: The last sentence of the second indented section has been changed to accentuate World Bank experiences in ICT

7. Para. 2.3: The last indented section has been added to stress the achievements of BRIC countries in the deployment of infrastructure in Africa

8. Para. 2.7: Box 1: “Regional Harmonization efforts in the ECOWAS region” has been added to highlight efforts by the RECs on harmonization of ICT policies and regulations to facilitate regional integration.

Section 3: Proposed Bank’s Operations Strategy

9. Paragraphs 3.3 and 3.4 have been added to reflect the proposed Bank Group ICT interventions in countries with different levels of development, and ICT integration into CSPs and national development plans respectively

10. Para. 3.9: The last sentence has been added to emphasize the additional advantages of the two focus areas proposed in the strategy

11. Para. 3.11: To ensure customized response, the three indented sections, respectively for Fragile States, Low Income Countries, and Middle Income Countries – have been revised

Section 4: Focus Area 1: 12. Para. 4.5: A sentence has been added on ITU’s estimated length of regional link to be built and its costs. 13. Para. 4.6: to clarify sponsorships of studies and roll-out plans, names of key players have now been added to the second sentence

14. Para. 4.8: A best practices example on national and broadband network has been added as Box 3 Section 5: Focus Area 2

15. Para. 5.4: A best practices example on network liberalization has been added as Box 4. 16. Para. 5.5: Capacity building gaps in RMCs have been comprehensively addressed with a phased approach in Bank group ICT interventions. Section 6: Implementation Arrangement 17. Paragraphs 6.9 and 6.10 have been revised to emphasize the nature and interface functions of the ICT Focal point. Annexes: 18. Annex 3:” Indicative pipeline of projects” has been removed to highlight the coordination role of

the ICT focal point. A new Annex 4 has been added: Potential projects and Bank’s roles (potential submarine cable projects on going and planned, Broadband fiber optic backbones at regional and national level);

19. A new Annex 3 has been added: Alignment with other Bank’s strategies 20. A new Annex 2 has been added: Strategies, ICT infrastructure, sector reform, and IT enabled

services in Africa.

Bank Group’s Information & Communications Technologies (ICT) Operations Strategy

OPERATIONAL RESOURCES AND POLICIES DEPARTMENT &

ICT FOR DEVELOPMENT (ICT4D) PROGRAM

October 2008

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ACKNOWLEDGEMENTS

The preparation of the Bank’s draft ICT operations strategy draws on extensive consultations within the Bank and with external stakeholders. The ICT Operations Strategy has, in particular, benefited from the support of the ICT Task Team, comprised of representatives from OSVP, OIVP, ORVP, ECON and CSVP. It was also able to profit from consultations with staff of the Global ICT Departments of both the World Bank and the Inter-American Development Bank.

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Table of Contents

EXECUTIVE SUMMARY .......................................................................................................................... 1 1. CONTEXT AND RATIONALE ........................................................................................................ 2 2. ICT IN AFRICA: CURRENT PLAYERS AND BANK’S POSITIONING .................................. 3

THE SIMPLIFIED ICT VALUE CHAIN ........................................................................................................... 3 ICT PLAYERS IN AFRICA ............................................................................................................................ 3 THE BANK’S POSITION ............................................................................................................................... 5

LESSONS LEARNT FROM PAST EXPERIENCE …………………………………………………......6 3. PROPOSED BANK’S OPERATIONAL ICT STRATEGY ........................................................... 7

VISION........................................................................................................................................................ 7 STRATEGIC ALIGNMENT ............................................................................................................................. 7 GUIDING PRINCIPLES.................................................................................................................................. 8 TIMED APPROACH....................................................................................................................................... 8 CUSTOMIZED RESPONSE ............................................................................................................................. 9

4. FOCUS AREA 1: REGIONAL AND NATIONAL ICT INFRASTRUCTURE.......................... 10 INTERNATIONAL CONNECTIVITY GAPS..................................................................................................... 10 REGIONAL BACKHAUL NETWORKS GAPS................................................................................................. 11 NATIONAL BACKBONE NETWORKS .......................................................................................................... 11

5. FOCUS AREA 2: POLICY AND REGULATORY FRAMEWORKS ........................................ 12 6. IMPLEMENTATION ARRANGEMENTS ................................................................................... 14

FINANCING INSTRUMENTS........................................................................................................................ 14 INSTITUTIONAL ARRANGEMENTS ............................................................................................................. 14 IN-HOUSE CAPACITY BUILDING................................................................................................................. 16 PARTNERSHIPS ......................................................................................................................................... 16 RESULTS-BASED MONITORING AND EVALUATION ................................................................................... 16

7. CONCLUSION AND RECOMMANDATION .............................................................................. 17 ANNEX 1: STATISTICS OF TELECOMMUNICATIONS / ICT FOR AFRICA AND THE OTHER CONTINENT.............................................................................................................................................. 18 ANNEX 2: STRATEGIES IN ICT INFRASTRUCTURE, SECTOR REFORM AND IT ENABLED SERVICES IN AFRICA ........................................................................................................................... 19 ANNEX 3: ALIGNMENT WITH OTHER BANK STRATEGIES ....................................................... 21 ANNEX 4: POTENTIAL PROJECTS AND BANK ROLE................................................................... 22

ANNEX 5: AFRICA MISSING LINKS...……………………………………………………………….....23 ANNEX 6: ICT RESULTS BASED LOGICAL FRAMEWORK FOR 2008 - 2010……………………...24

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Acronyms and Abbreviations

ADF African Development Fund AfDB African Development Bank AISI African Information Society Initiative AsDB Asian Development Bank AU African Union Commission BPO Business Process Outsourcing BRIC Brazil, Russia, India And China CIDA Canadian International Development Agency COMTEL COMESA Telecommunications project CSPs Country Strategy Papers EAC East African Community EASSy East Africa Submarine Cable System ECA Economic Commission for Africa ECON The Chief Economist Complex ECOWAS Economic Community for West African States EU European Union GDP Gross Domestic Product GICT Global ICT Department of the World Bank ICT Information and Communications Technologies IDRC International Development Research Centre IFC International Finance Corporation ITU International Telecommunications Union MDB Multilateral Development Bank MDGs Millennium Development Goals NEPAD New African Partnership for Development OIVP Infrastructure, Private Sector and Regional Integration Vice Presidency ORVP Regional programs and policy Vice Presidency OSVP Sector Operations Vice Presidency OINF Infrastructure Department PPP Public Private Partnership PRSPs Poverty Reduction Strategy Papers RASCOM Regional African Satellite Communication RMCs Regional Member Countries SADC Southern African Development Community SATA Southern African Telecommunications Association SIDA Swedish International Development Cooperation Agency USAID United States Agency for International Development WSIS World Summit on Information Society

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EXECUTIVE SUMMARY

1. In recent years, Africa has made impressive but uneven progress in developing basic ICT infrastructure. While, largely driven by the private sector, mobile telephony penetration is moving up fast – over 30% in 2008 –, other areas such as broadband internet haven’t followed suit – with only 5 African countries with a penetration higher than 1% in 2008. In an increasingly “virtual” global economy, this digital divide is a growing impediment to Africa’s growth.

2. Recent estimates from International telecommunication Union (ITU) call for hundreds of

millions of dollars of investments, mostly driven by the private sector, in order to build and improve regional and national ICT infrastructure across the continent. This requires the right mix of policies and regulations, carefully crafted public private partnerships and provision of public money in select cases.

3. The objective of the ICT operations strategy is to make an important contribution to

poverty reduction and economic growth of RMCs by increasing Bank’s role in extending access to ICT infrastructure, stimulating private sector investment and ultimately enhancing good governance, the efficient delivery of public services like education and health, thus contribute to the Millennium Development Goals.

4. To date, most of the Bank’s investments in the ICT sector have been fragmented, and

lack clear strategic direction and sustained effort. Moving forward, the Strategy recommends that the Bank adopt a phased approach.

5. In the short run (next 24 months), the Bank would concentrate on two pillars: (i)

regional and national backbones -direct financing of broadband infrastructure and (ii) enabling policy and regulatory environment - support to Africa’s efforts to attract private financing flows through improvement of policy and regulatory frameworks, with the overriding objective of bringing about economic growth and poverty alleviation. The experience that will be gathered would form the basis of a reassessment of the Bank’s role in ICT in September 2010.

6. In the medium term, the Bank would work towards stimulation of the demand for ICT

networks and services by promoting e-government and connectivity to schools, universities, health institutions and through customized response to the needs of Fragile States, Low and Middle Income Countries.

7. In order to ensure internal alignment and knowledge building, Management will create a

light ICT focal point that will have a coordination role, reporting to VP OIVP during the interim period. The Bank Group operations in the ICT sector will utilize existing financing instruments, and enhanced collaboration and select partnerships will be necessary. The activities under the ICT strategy will be implemented within the broader regional and national development agendas and Bank’s priorities. In addition, the Bank Group’s ICT operations will be managed on the basis of a results-based logical framework and will include monitoring of key performance indicators.

8. The Boards of Directors are invited to adopt the Bank’s ICT Operations Strategy.

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BANK GROUP’S ICT OPERATIONS STRATEGY

1. CONTEXT AND RATIONALE 1.1 The significant contribution of ICT to poverty reduction, economic growth, productivity and

efficiency of public services is well recognized. Research indicates that countries which have a 10% higher telephone penetration rate over the long run are likely to register 0.6% higher annual growth in GDP.

1.2 ICT provides strong prospects for RMCs to leap-frog technology, build efficiency, lower costs

of production and marketing, develop comparative advantages in other sectors, expand international demand for their goods and services, create primary and secondary sources of employment, generate knowledge, propel research and development and thereby establish strong growth poles.

1.3 In particular, ICT provides ample opportunities for unlocking the potential of individuals and

enterprises and facilitating job creation. The global IT services market was estimated to US$ 728 billion by 2007 and the Business Process Outsourcing (BPO) component is expected to grow to US$140 billion by 2008.

1.4 ICT is also critical for facilitating trade, financial intermediation and regional integration, by

increasing the efficiency of transport and logistics services, improving standards and certification and facilitating customs passages. E-banking now underpins the efficient transfer of payments and effective management of liquidity, saving, credit, equity and risks. The worldwide transfer of remittances is increasingly becoming ICT-enabled and possibilities are emerging for transfer of micro-payments using mobile networks.

1.5 As a result, there is a growing consensus that ICT potential for development should be

harnessed by developing countries, in support of their efforts to meet the Millennium Development Goals (MDGs) and to attain growth and social development.

1.6 Africa faces, however, a challenging gap in the ICT sector. While rapid growth of mobile

access – which has now reached 30% of the African population – has expanded communication against the back drop of active private sector participation, the region still lags behind other continents in the internet broadband networks penetration (Annex 1).

1.7 Across the continent, there are only an estimated 50 million internet subscribers, with over half

of the Internet users located in North Africa and South Africa. Twenty countries in the region do not have the direct terrestrial access to global network and rely on expensive and poor quality satellite networks. The scarcity of international Internet bandwidth and lack of Internet Exchange Points (IXPs) have also driven Internet prices high. Africa has the most expensive Internet prices with average monthly subscription of about US$50, which is close to 70 per cent of the average per capita income.

1.8 The ITU estimates that around 92,000km of fiber link, including 25,000km of international

submarine cable routes, is required to bridge regional and international broadband gaps, which represents an investment of US$1 billion for international submarine fiber network and over US$1.6 billion for regional links. Between US$50 and US$500 million per country are needed to deploy national backbones depending on the size of the countries.

1.9 The bulk of the resources for broadband infrastructure could be available through private

investment. However, private interest in this type of project has been uneven, especially in

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light of complex inter-country arrangements, sometimes weak policy and regulatory frameworks, small market sizes and unclear pro-poor access policies or subsidies.

1.10 Efforts by development institutions1 suggest that extending broadband communications

requires investment in the whole supply chain (submarine cables, regional networks, national backbones and rural access), leveraging private investment, policy and regulatory reform and stimulating network demand and use. Access to broadband infrastructure, public sector capacity and regulatory frameworks are highly interdependent and need to be addressed in an integrated manner.

1.11 It is against this backdrop that the present operations strategy intends to develop a coherent

and integrated framework for the Bank Group’s support to ICT.

2. ICT IN AFRICA: CURRENT PLAYERS AND BANK’S POSITIONING

The Simplified ICT Value Chain 2.1 A simplified ICT value chain can be devised as follows:

Figure 1: simplified ICT value chain

ICT Players in Africa 2.2 Standards settings and technical developments have largely been driven by the private

sector at the global level outside Africa, with the continent largely in a position of standard and technology adopter. The ITU has extensive programs for standards development, advocacy and capacity building. Its regulatory initiatives in Africa are financially supported by the EU.

2.3 Work on the enabling environment in recent years has largely been the focus of a handful of

core development partners2 who have spearheaded and supported ICT initiatives aimed at

1 The World Bank, for example, is financing a Regional Communications Infrastructure Program (RCIP) that aims to accelerate the roll out of regional and national backbone infrastructure to expand the reach of submarine cable traffic and extend access to enterprises, schools, universities and public sector institutions and promote access to rural areas.

2 Although there are many actors in the field, there are a relatively few core donors such as the European Union, the World Bank, the Canadian International Development Agency (CIDA), the International Development Research Centre (IDRC), the United States International Development Agency (USAID) and the Swedish International Development Agency (SIDA)

Content Provision

Physical Infrastructure

Development

High speed Internet GSM UMTC, WiFi

Policies Regulatory frameworks

Channel: fiber optics, radio waves, satellite Media: handsets, computers

E-commerce E-education E-health E-government

P L A Y E R S

Private sector Standard bodies ITU, ETSI, IEEE

World Bank EU, ITU, ECA Bilaterals. USAID, IDRC etc

Private sector Government, EU, Kfw,CIDA,WB, IDRC, DFID, SIDA, etc

Government Bilateral MDBs,Private sector,DGF,etc

Enabling Environment

Standard setting And Technical development

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policy and regulatory reform and capacity building, as well as the integration of ICT in key sectors.

− The European Union has been pivotal in promoting ICT for trade and regional integration

particularly through its Regional ICT Support Program for Eastern and Southern Africa (RICTSP) with a grant of 22 million Euros.

− The World Bank is the largest multilateral financier and provider of policy and regulatory

advice in the field of ICT in the continent through its Global ICT (GICT) Department. It has developed a series of e-country programs with the aim of promoting public sector effectiveness, capacity building and the development of local ICT industry. The Global Development Gateway is another initiative aimed at collating and sharing development knowledge through online resources portal.

− The Canadian International Development Research Centre (IDRC) has a long-standing

presence in the region and played a significant role in stimulating ICT policy, research and information systems development throughout the continent. Through financing from Canadian International Development Agency (CIDA), the government of Canada and others, the IDRC has spent over 52 million Canadian dollars (CAN$40 million through the Acacia program and CAN$12 million through the Connectivity Africa program) to promote connectivity, innovation, research and development, convergence and partnerships over the last decade.

− Bilateral development agencies such as the United States International Development

Agency (USAID) and the Swedish International Development Agency (SIDA) have programs aimed at building regional regulatory and policy capacity and national programs aimed at improving the state of infrastructure, policy and skills.

− The BRIC countries and in particular India and China have emerged as key players in the deployment of infrastructure in Africa. The Government of India is planning a US$1 billion Pan Africa Networking project in collaboration with the African Union. China has invested in expansion of national backbones in a dozen of RMCs and its influence in the communications market is growing in the African region.

2.4 Physical infrastructure deployment and content provision is at the core of private sector

investments. Private investment in telecommunications was mainly focused on the expansion of mobile networks. The combined investment of mobile operators is well over US$ 35 billion over the last decade. Mobile has the highest degree of competition, where almost 90 percent of Africa countries have established either partial or fully competitive mobile markets. The private sector is also venturing into the broadband market in particular in expanding international connectivity using submarine cables, with an estimated investment of US$6.4 billion.

2.5 There is also increasing involvement of the core computing and networking private sector such

as Cisco, Intel, Hewlett Packard, Microsoft, in building capacity to harness ICT for development through e-applications.

2.6 In addition, mostly through their private sector financing arms, development institutions3 have

also fostered hardware investment, notably in satellite and fiber optics networks.

− The European Investment Bank (EIB) and the EU have established a Trust Fund for Africa, endowed with 100 million Euros in grants and 260 Million Euros in loans for the

3 Notably IFC, EIB and Proparco

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period 2007 - 2008. The fund aims to finance cross-border projects or national projects with a regional and continental impact in ICT, energy, water and transport.

− Apart from extensive work in policy and regulatory capacity building and market reform,

the World Bank Group aims to double its commitment to ICT in Africa to US$2 billion by 2012. The financing will continue to promote private sector participation, while supporting public-private partnerships to address market gaps, with an emphasis on affordable high-speed Internet access. This commitment builds on the US$ 424 million Regional Communications Infrastructure Program (RCIP) for countries in Eastern and Southern Africa and on IFC financing.

2.7 At the political and regional level, the African Union Commission has become a partner for

rallying the support of heads of States and ministers around the key challenges facing the continent on ICT. The Regional Economic Communities such as ECOWAS, SADC and EAC have been proactive in creating initiatives that foster policy and regulatory harmonization in the communications sector (Box.1).

Source: ITU News, ECOWAS/UEMOA moves towards ICT market Harmonization www.itu.int/ITU-D/treg/projects//itu-ec/ITUNEws_final.pdf,

The Bank’s Position 2.8 Historically, the Bank Group’s public sector arm typically financed projects and programs

with ICT components that often include institutional development, provision of hardware and software, systems studies, health/education/agriculture management information systems and training.

2.9 In the more recent past, the Bank Group’s role across the ICT value chain has been modest,

and mostly concentrated on providing funds to foster physical infrastructure deployment, through PPP financing of satellites (US$50m to RASCOM in 2007) and broadband fiber-optics links (US$14.5m to EASSy) and funding of a few studies (EASSy, COMTEL, Southern African Telecommunications Association’s SADC countries interconnection, and the ECOWAS Wide Area Network).

Box 1 : . Regional Harmonization Efforts in the ECOWAS region The Economic Community for the West Africa States (ECOWAS) has taken various steps to harmonize ICT policies and regulation in order to facilitate regional integration of African ICT markets. The ECOWAS Treaty provides for the development of a regional telecom and ICT infrastructures and the harmonization of ICT policies and regulatory frameworks. ECOWAS road map for regulatory harmonization and regional mobile roaming were among the main initiatives in the region. The West African Telecommunications Regulators Association (WATRA) was established in 2002 to spearhead regulatory harmonization. WATRA has developed regulatory guidelines in the areas of interconnection, licensing, spectrum management, numbering, universal access/service, model ICT policy and law that were adopted at its 3rd session in 2005. The efforts of WATRA were consolidated through the adoption of the harmonized ICT regulatory frameworks during the 6th Meeting of the ECOWAS Ministers in charge of Telecommunications and ICT in 2006. Despite, the slow implementation of regional harmonization framework due to the different state of regulations, the ECOWAS region was able to forge partnerships and secure the necessary resources to speed up the deployment of broadband infrastructure, mobile roaming, open access and fair interconnection at the regional levels.

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2.10 From this track record, it is clear that the Bank Group’s efforts have been fragmented, uncoordinated and lacked strategic directions.

2.11 At the Connect Africa Summit in Kigali (2007), the Bank made a significant step forward in

getting more actively engaged in African ICT, (Box 2). In particular collaborating with the ITU to building ICT Centers of excellence in Rwanda and Tunisia, interconnecting African capitals and promoting adequate policy and regulatory environments in order to encourage new ICT infrastructure investment.

Box 2:: Goals of the Connect Africa Summit (Kigali, 2007)

Goal 1: Interconnect all African capitals and major cities with ICT broadband infrastructure and strengthen connectivity to the rest of the world by 2012.

Goal 2: Connect African villages to broadband ICT services by 2015 and implement shared access initiatives such as community telecentres and village phones.

Goal 3: Adopt key regulatory measures that promote affordable, widespread access to a full range of broadband ICT services, including technology and service neutral licensing/authorization practices, allocating spectrum for multiple, competitive broadband wireless service providers, creating national Internet Exchange Points (IXPs) and implementing competition in the provision of international internet connectivity.

Goal 4: Support the development of a critical mass of ICT skills required by the knowledge economy, notably through the establishment of a network of ICT Centres of Excellence in each sub-region of Africa and ICT capacity-building and training centres in each country, with the aim of achieving a broad network of inter-linked physical and virtual centres, while ensuring coordination between academia and industry by 2015.

Goal 5: Adopt a national e-strategy, including a cyber-security framework, and deploy at least one flagship e-government service as well as e-education, e-commerce and e-health services using accessible technologies in each country in Africa by 2012, with the aim of making multiple e-government and other e-services widely available by 2015.

2.12 The Bank also contributes, alongside the AU and Regional Economic Communities, and

through supporting efforts in policy harmonization and infrastructure development, to the realization of other regional and global initiatives, including the Geneva Plan of Action and Declaration of Principles adopted by the First World Summit on Information Society (WSIS), the Tunis Commitment and Agenda for the Information Society in 2005 and the ICT policy and regulatory harmonization framework endorsed in Cairo in May 2008 by African ministers responsible for ICT.

Lessons learnt from past experience of development partners, including the Bank 2.13 The key lessons learnt from experience of development partners are the following:

- ICT can be a profitable portfolio for multilateral organizations generating higher returns and development impact simultaneously.

- Flexibility in investments at national and regional levels is critical in ICT sector.

- There is a need for restructuring ICT operations around sovereign and non sovereign lending.

- There is a need for coherence, internal capacity building and coordination of ICT initiatives in several development organizations, including the Bank.

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- Given the state of development of ICT in Africa, addressing the missing links in communications infrastructure appears the most appropriate course of action.

- There is a need to follow closely the strategies and actions of public and private ICT players in Africa and develop focused partnerships with select partners.

- Mainstreaming ICTs into core development sectors and linking the ICT goals to the achievement of the Millennium Development Goals and poverty reduction are crucial for African countries.

- Major regulatory, market and infrastructure impediments need to be addressed if ICTs are to become more pervasive in Africa.

3. PROPOSED BANK’S OPERATIONAL ICT STRATEGY

Vision 3.1 The Bank shares Africa’s vision for ICT contained in the NEPAD and the WSIS

commitments, reaffirmed by the recommendations of the Connect Africa Summit; to bridge the digital divide in Africa, in particular with regards to broadband connectivity.

3.2 Strengthening the Bank’s current position in order to deliver on the Bank’s commitments and

make a valuable contribution towards these objectives requires a focused ICT strategy. Taking a pragmatic view on the Bank’s capacity constraints, this paper proposes the following approach: in the short run (next 24 months), the Bank would concentrate on two pillars - direct finance of broadband infrastructure and support to Africa’s efforts to attract private financing flows through improvements of the policy and regulatory frameworks, with the overriding objective of bringing about economic growth and poverty alleviation. The experience that will be gathered would form the basis of a reassessment of the Bank’s role in ICT in September 2010.

3.3 The medium term vision of Bank’s ICT operation is to achieve affordable access,

competitiveness and economic growth in RMCs through expanded use of ICTs by institutions, enterprises and the public at large. The Bank’s response to the needs of RMCs will depend on the levels of social and economic development (Fragile states, Low and Middle Income Countries), infrastructure, competition and the degree of the maturity of the regulatory frameworks. (Annex 2).

3.4 The Bank’s support to RMCs for the ICT sector will be based on an integrated approach.

This includes the integration of ICTs in Country Strategy papers. National ICT programs will focus on the mutual and reinforcing nature of capacity, infrastructure, policy and regulatory reform and the development of local ICT sector. The incorporation of ICT, e.g. fiber optic in the design of infrastructure projects such as roads and power transmission lines will be used as an important factor in Bank projects to optimize resources, mainstream ICTs in integrated rural development and reduce the implementation costs, Bank projects will leverage on ICTs opportunities.

Strategic alignment 3.5 The ICT intervention of the Bank falls in the priorities defined in the ADF-11 and Bank-wide

in the Medium Term Strategy 2008-2012. 3.6 The proposed ICT strategy is fully aligned with other Bank Group’s existing policies and

strategies, including the Governance Strategic directions, Higher Education, Science and

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Technology, Knowledge Management and Development, Regional Operations, Fragile States, and Private Sector Development (Annex 3).

3.7 The ICT strategy mainstreams critical cross-cutting issues: it undertakes, in particular, to

mainstream capacity building, gender and environmental aspects in ICT programs:

Guiding Principles 3.8 The following principles will guide the Bank’s ICT interventions:

− Country Ownership: The Bank’s approach will be underscored by country ownership.

− Leveraging the Private sector: the Bank’s ICT operation will leverage investment of the

private sector at regional and national levels.

− Selectivity and Complementarity: ICT will be anchored on the Bank’s strategic operational priorities and the development challenges facing its RMCs. The Bank’s support will be based on an integrated approach and selectivity taking into account complementarities with other actors including the private sector.

− Catalytic Role: The Bank will increasingly play a catalytic and convening as well as

“honest broker” role to leverage enhanced access to financing for ICT sector development in RMCs.

− Modularity: The Bank’s intervention in the ICT sector will be modular and incremental in

order to provide for flexibility and replication of best practices. Modularity will ensure a more responsive, dynamic, scalable and flexible operations in the ICT sector.

− Integrated approach: The Bank’s support to RMCs for the ICT sector will be based, as

much as possible, on an integrated approach that builds synergy among different sectors to maximize development impact.

− Regional focus: The Bank should encourage regional programs that promote cooperation

and bring sustainable results at national levels

− Results: In line with its commitment to the Managing for Results agenda, the Bank Group’s involvement in the ICT sector will be results-oriented. To this end, relevant and measurable result indicators and targets will be identified and developed for any operation in the sector.

Timed approach 3.9 For the next 24 months, the Bank Group’s focus regarding ICT will be on: (i) the development

of regional and national ICT infrastructure; (ii) promoting enabling policy, regulatory and legislative frameworks that create a conducive environment for private investment and public and private partnerships for regional backhaul links and national backbones (Figure 2). The focus on these areas will enhance Bank’s role as a catalyst, financier and knowledge broker in the ICT sector and enable it to build the necessary expertise in development of ICT infrastructure, policy and regulatory frameworks in its RMCs.

9

Figure 2. Bank’s positioning through the ICT Value Chain 3.10 In the medium term, based on progress in improving the Bank’s internal knowledge and

insights, the Bank will assess the opportunity to enter the rest of the value chain shown in Figure 2 above.

Customized response 3.11 The Bank’s response will be tailored to the specific cases of individual countries, based on the

level of connectivity, progress in sector reform, public sector capacities to utilize ICT for social and economic development, and the readiness of enterprises to exploit ICT job creation opportunities.

− In Fragile States the Bank will focus on the building of ICT infrastructure and institutional

capacities that underpin reconstruction, reform and the normalization process. The medium term goal is to attain access to backbone networks, improve competition and enhance regulatory reform. Fragile states would achieve a reasonable coverage of basic communications by 2012 and broadband access to universities, businesses and public institutions.

− In Low Income Countries the Bank will focus on comprehensive programs that address

infrastructure, policy and regulatory framework, and connectivity, including to schools and health institutions. The Bank’s medium term goal would be to improve the penetration of broadband Internet services to an acceptable level and attain universal access to basic communications.

− In Middle Income Countries, the Bank will focus on consolidating reform and providing

support in policy, regulations and legislation in particular in the enactment and implementation of legislations that promote online transactions and electronic commerce. The Bank will also, on a case by case basis, support the expansion of broadband infrastructure and implementation of e-government services in the area of e-education, e-health and e-agriculture as required. Likewise, the Bank will work towards enhancing the competitiveness of enterprises in Middle Income Countries and their participation in the ICT enabled services.

Standard setting And Technical

Development

Content Provision

Enabling Environment

Physical Infrastructure

Development

No comparative advantages in this area

Bank has not been key player

Bank financed EASSy RASCOM,Feasibility studies of regional networks

Hardware and software Mainstreaming in development sectors

The bank adopts best practices

Promote reform, regional connectivity, PPP

Broaden investment in regional backhaul and national backbones Extend access to rural areas

To be explored in 24 months Stimulation of demand Use in key sectors

Pote

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Rol

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4. FOCUS AREA 1: REGIONAL AND NATIONAL ICT INFRASTRUCTURE 4.1 The Bank will follow closely the strategies and actions of public and private ICT players in

Africa, and propose focused partnerships with select partners. The Bank will particularly work closely with the African Union (AU) through its Bureau and the Conference of Ministers in charge of Communications and Information Technologies and the International Telecommunications Union (ITU) to ensure establishment of conducive policy and regulatory environment and political support for successful implementation of the identified projects. The Bank will also collaborate with the World Bank and the Infrastructure Consortium for Africa (ICA) in implementation actions including identification of gaps, project proposal preparation, financing, project execution. The Bank will explore opportunities to complement World Bank’s already established projects under its Regional Communications Infrastructure Program (RCIP) and collaborate with the ICA in its ongoing program on Financing ICT in Africa for Growth aimed at advocating the scaling up of investment in ICT including sensitization of the involvement of private sector.

4.2 Successful deployment of broadband communications requires investment across the whole

supply chain including international connectivity to the rest of the world, regional backhaul link that interconnect countries, national backbone that extend access beyond major cities, last mile connection to rural and underserved areas and stimulation of demand and usage.

4.3 Building on its experience in financing regional and national broadband networks, the Bank

will concentrate on the first three steps of the supply chain, with a view to work towards connecting African capital cities, and work with select partners which can bring the adequate expertise on the last two steps.

Figure: the 5 steps of the Broadband Connectivity Chain

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International Connectivity Gaps 4.4 High-speed international connectivity is a major constraint on the delivery of broadband

services in Africa. A number of submarine cable backbone projects have been proposed in the recent years with coverage of 70,000 km costal line and estimated cost of US$6.4 billion4. The actual implementation of most of the submarine cables has been stalled by lack of enabling policy and regulatory framework and the complexity of dealing with multi-country investment projects. Nonetheless, there are prospects for some of the submarine cable projects to come to fruition in the next two years (Annex 4, table1).

Regional Backhaul Networks Gaps 4.5 The absence of regional connectivity between States with access to the submarine cable and

landlocked countries and more generally, the scarcity of cross-border backhaul links is one of the key broadband access gaps in Africa. A number of regional connectivity projects have been proposed to increase links between countries. ITU estimates about 66,000 Km of regional link to be built with a cost of over US$1.6 billion. Feasibility studies by the World Bank and the ITU suggests regional connectivity gaps cannot be bridged by the private sector alone, but require public and private sector partnerships. Annex 4 Table 2 provides potential regional projects for which the Bank Group could provide financial support

National Backbone Networks 4.6 The absence of national backbone networks is another obstacle to the widespread use of

advanced communication services in RMCs. The lack of national backbone infrastructure makes it costly and not commercially viable to provide communication services beyond the main urban centers. A number of RMCs including Burundi, Burkina Faso, Rwanda, Tanzania (Box 3) and Uganda have initiated studies and rollout programs, with the sponsorship of donors such as the World Bank, the United States Trade Development Agency and the Government of China through a vendor-financing scheme, for building their national backbone5 and the trend is likely to continue in other countries (Annex 4, table 3).

4.7 Although public resources can be used to build national backbones, approaches that combine

public and private sector partnerships, where the private sector builds most of the national backbone network and the public sector focuses on the segments that are not commercially viable are becoming increasingly popular. The public and private partnerships model requires concerted policy and regulatory interventions that promote viable business and network ownership models and open access. The Bank investment in national backbones will primarily focus on financing detailed feasibility studies with particular emphasis on stimulating public private partnerships and private investment and sharing best practices.

4.8 The Bank realizes that the investment in regional and national backbone networks should be

matched with extending access to schools, universities, hospitals, agricultural centers and the

4 Source: Terabit Consulting, Submarine Networks in Africa presentation www.terabitconsulting.com/ 5 Burundi (USD7m, World Bank study and rollout); Burkina Faso ( estimates US$80 million, feasibility study supported by

USTDA ); DRC (USD231m, feasibility study sponsored by IDRC); Rwanda (USD80m, feasibility study sponsored by the World Bank); Tanzania (USD170m, feasibility study sponsored by governments of Tanzania and China); Uganda (USD160m, feasibility study by Government, implementation through Vendor financing by ZTE China)

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whole range of government institutions and enterprises and will pursue partnerships with select agencies to this effect.

Source:Gorenment of Tanzania, Ministry of Communications and Transport, Technical Report on feasibility Study on Implementation of the National ICT Backbone Infrastructure, 2005

5. FOCUS AREA 2: POLICY AND REGULATORY FRAMEWORKS 5.1 Enabling policy, regulatory and legislating environment is a key for improved broadband

connectivity and for extending ICT access to government institutions, schools, universities, and the private sector. Substantial challenges still exist in the development of technology neutral and convergent licensing regimes, promotion of competition, establishment of fair interconnection rules and tariffs, management of resources such as radio frequency spectrum and numbers, design and execution of universal access strategies and the enforcement of standards. Policy and regulatory intervention that abolish exclusivity on market entry, reduce license fees and simplify licensing procedures as well as those promoting open, transparent and non-discriminatory access to the networks are the foundation for improved national and regional broadband networks. Besides, most RMCs face challenges in new policy areas in particular those pertinent to electronic transaction and cyber security.

5.2 The Bank will ensure that its policy and regulatory interventions stimulate private investment

in infrastructure and support its non-sovereign financing in the ICT sector. The Bank’s advisory services in policy and regulatory reform will take place within the broader framework of national strategic plans, PRSPs, CSPs, and in partnership with other development actors. This will ensure that Bank’s advice to RMCs are impartial and respond to social and economic development needs.

5.3 In this respect, the Bank will concentrate its efforts on:

Box 3. Accelerating the Deployment of National and Regional Broadband Network: A National Initiative with Regional Significance, The Case of Tanzania Tanzania has developed a competitive regulatory framework over the last decade. It established, the Tanzania Communications Commission and Tanzania Broadcasting Commission in 1993 and introduced reforms to the communications and the broadcasting sector. Initial liberalization focused on opening up the mobile, data, ISPs, TV and radio broadcasting market. In 2001, the incumbent telecom service provider the Tanzanian Telecommunications Company Limited (TTCL) was partially privatized through a sale of 35% of its equity to a strategic investor. The company was given an exclusivity of a four years period that ended in February 2005. In addition, Tanzania set off a multi-stakeholder ICT policy development initiative in 2002 that led to the development of a national ICT policy. Following the adoption of a national ICT policy and a converged licensing regime, Tanzania embarked on an initiative for development of an ideal and open national backbone network architecture in 2005. The multi-stakeholder initiative aims to create a national Optical Fiber Cable (OFC) backbone network through consolidation of segments of the existing and planned networks from different national utility companies including TANESCO, TRC, SONGAS, TAZARA and TTCL. The plan proposes the construction of 6997 km Optical Fibre Cable of which 3,522 km, including 2,653 km of 48 cores and 869 km of 24 cores. A total of 3,475km will be rebuilt, including 3,430 km of 48 cores and 45 km of 24 cores. The unified national backbone project intends provide links to submarine landing station and bordering countries (Burundi, DRC, Kenya, Malawi, Mozambique, Rwanda, Uganda and Zambia).

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− Promotion of national policy and regulatory reform: This will involve technical assistance on sector reform to resolve market efficiency gaps and the development of business models that bring the public and private sector together in extending broadband access at national levels.

− Promotion of regional policy and regulatory harmonization. This will involve carrying

out studies in major regional policy challenges and the promotion of dialogue between countries to facilitate fair pricing of cross-border networks, non-discriminatory interconnection regimes and infrastructure sharing.

5.4 The Bank realizes that a number of partners are involved in building policy and regulatory

capacity and sector reform efforts in African countries. The Bank’s involvement in this area will align directly with its intervention in ICT infrastructure, build on the complementarities with other partners’ efforts and focus largely on regional/national policy and regulatory dialogue and harmonization to facilitate open access and fair interconnection of networks and forge public and private partnerships.

Source: ITU, Telecommunication/ICT Market Trends in Africa, 2007, www.itu.int/ITU-D/ict/Statistics/material/af_report07.pdf

Addressing Capacity Gaps in RMCs 5.5 Capacity building will be an integral component of the short and medium term strategy of

the Bank’s ICT interventions. The Bank will improve its dialogue with RMCs within the context of CSPs to address capacity gaps of RMCs on a case by case basis.

• In the interim period, capacity building will focus on improving the ability of

governments to plan broadband network, develop business models based on public and private partnerships. The interventions will pay particular attention to enhancing internal policy dialogue among policy makers, development practitioners and other players to designing policies and regulatory frameworks that enhance public and private partnerships, open access and harmonization at the regional levels.

• In the medium term, capacity building would focus on managing large scale programs like school connectivity, development and implementation of a strategy for job creation

Box 4 – The implication of liberalization in expansion of networks in Morocco Morocco undertook important reforms in the telecommunications sector since 1995 and reaped considerable benefits. A new pro-competitive telecommunications sector law was enacted in 1997 and a regulatory authority (Agence Nationale de Réglementation des Télécommunications, ANRT) was established in 1998.. Competition was introduced in the mobile market in 1999

In 2000, a global media company bought its first 35 percent equity stake and another 16 percent of the incumbent Morocco Telecom (IAM) in 2004. Privatization and liberalization has accompanied increases in mobile and Internet penetration rate. Morocco has 2.3 million fixed-line customers at the beginning of 2008, With 450,000 broadband Internet subscribers, it leads the African continent with the broadband market. The penetration rate for the fixed-line market was helped by the entry of a new player, which managed to sign up a million customers since going into business at the beginning of 2007. Morocco had 20 million GSM customers with penetration over 62% and more than 1,500 ICT firms employing over 42,000 people.

Customers were able to profit from privatization and the creation of competition through lower prices, better quality of services and openness for innovation in a regulated telecommunications market.

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and participation in the IT Enabled Services markets and the creation of the necessary legislation and regulatory framework for electronic commerce, e-applications, online transaction and content.

6. IMPLEMENTATION ARRANGEMENTS

Financing Instruments 6.1 The review of the Bank Group’s existing financing instruments indicates that all of the ICT

activities outlined above can be financed through instruments already in use by the Bank. 6.2 In this regard, the breadth of the existing grant facilities (including NEPAD- Infrastructure

Project Preparation Facility Fund (IPPF), Enhanced Private Sector Assistance Facility (EPSA), and other Trust Funds managed by the Bank) can be used to finance studies, advisory services for PPP packaging, capacity building support for ICT applications and the improvement of policy and regulatory framework.

6.3 Broadband infrastructure projects can be financed by private sector window lending, equity

participation and guarantees, and potentially public sector loans from the ADB and loans/grants from the ADF window in some cases. Policy-based lending instruments can be used, where appropriate, to encourage the creation of the enabling environment.

6.4 In addition, the Bank will encourage private equity investors and work closely with other

International Financial Institutions to ensure joint financing and leverage.

Institutional Arrangements 6.5 The ICT institutional arrangement of the Bank does not meet its strategic orientation and a

growing portfolio in this important field. Its current ICT operations are fragmented and small, with limited synergies:

− The Energy and ICT Division (OINF.3), with 4 specialists including 1 young

professional, deals with select broadband infrastructure studies; − Sector Operations Vice Presidency (OSVP) handles limited ICT sector application

components in their projects The Social Sector departments have health, education, agriculture and governance specialists who depend heavily on OINF staff in the preparation and implementation of ICT for development (ICT4D) operations in their respective areas;

− Private Sector Department (OPSM) focuses on private sector lending, with two investment

officers working on ICT projects;

− NEPAD Regional Integration and Trade Department (ONRI ), within the OIVP Complex also finances and manages studies related to ICT; and

− There are no staff members dedicated to ICT-related research, knowledge management,

policy and regulatory work. 6.6 The absence of an institutional coordination mechanism renders the Bank less effective in its

delivery of a coherent ICT strategy and programs. In reviewing suitable institutional

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arrangements for implementation of the proposed ICT Operations Strategy, and building on the experiences of other MDBs, Management proposes to establish a light ICT focal point that will have a coordinating role and act as a facilitator and knowledge builder vis-à-vis other complexes (OIVP, OSVP, ORVP and ECON).

6.7 The ICT focal point will have the following responsibilities:

− Coordinate with the three Operations Complex Vice-Presidencies (OIVP, ORVP and OSVP) and the Chief Economist’s complex on the implementation of the ICT Strategy;

− Support other complexes’ work on ICT by providing analysis and advise on project and

program design and coordination across the Bank;

− Work with Country Teams on the development of country programs that integrate ICT infrastructure, policy and regulatory framework improvements;

− Provide regulatory advice in interconnection, spectrum management, open access and

emerging issues;

− Collect, organize and analyze information on programs, projects, ICT penetration and growth and feed it into relevant ECON initiatives on knowledge management including part of the 2009 African Economic Outlook that will focus on ICT;

− Working with ECON and other complexes, ensure strengthening of the Bank’s knowledge

and expertise in all aspects of ICT (policy and regulation, broadband network development, mainstreaming in ICT) so that it becomes the first call for advice to its RMCs;

− Working with Joint Africa Institute (JAI), Human Recourses Management Department

(CHRM)and external training providers, help design programs to build staff capacities in the ICT field;

− Coordinate with Partnership Unit (ORRU) to establish relations and partnerships with

other donors, international organizations and non-government organizations in the Bank ICT priority areas.

6.8 The skills required to undertake these tasks include appropriate technical skills; excellent

knowledge of the policy environment; very good understanding - and ideally, first-hand experience - of both public and private sides of the telecom business and ICT industry in general; conceptual and strategic analytical capacity; capacity to play an advisory role; ability to build partnerships within the Bank across complexes, and outside the Bank with both public and private players; a strong understanding of, and focus on, the Bank's results agenda. Given closer complementarities with the OIVP Complex, it is proposed that the focal point will report to Vice-President–OIVP.

6.9 The light Focal Point will have a coordinating role; it would draw from expertise now

within the bank or use consultant services as needed. It will require specialists, with experience and knowledge of the communications sector investment ,policy and regulatory issues and ICT for development as well as knowledge management The Focal point will establish synergies with key departments, including OPSM, directly and through a formal network of experts on ICTs drawn from the different complexes.

6.10 The Bank will develop core expertise in these areas through internal capacity building and

the engagement of the services of specialized firms by means of short term consulting

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contract or a long term framework agreement. The Bank will also explore possibilities for exchange of staff and experience with other sister institutions. Opportunities exist for technical assistance through bilateral funds and the secondment of staff.

In-house capacity building 6.11 In order for the Bank to increase its operational effectiveness in support of RMCs’ ICT efforts,

the capacity of the operations and ECON complexes will be strengthened. The purpose is to build a network of experts that integrate ICT as a cross-cutting instrument in the various sectors and projects. The Bank will build the capacities of its operational staff both at headquarters and in the field. This will encourage staff to support ICT solutions that are rooted in country strategies for development, rather than for specific projects. To this end, the Bank will, in particular, prepare ICT toolkits on its priority sectors for operational staff; and organize interactive seminars for operations staff and management.

Partnerships 6.12 In implementing the ICT Operations Strategy, the Bank will maintain close collaboration with

international agencies and bodies involved in ICT for development projects and promotion of an effective policy and regulatory environment in Africa. The goals of partnerships will be to minimize risks of duplication of efforts, encourage the sharing of information, experience and resources and stimulate the development of efficient national and regional markets for ICT products and services.

6.13 In particular, Policy and regulatory initiatives will be aligned with the activities of ITU, the

ECA and the World Bank. 6.14 In addition, the Bank will forge strong partnership with the private sector in all its ICT

interventions. The Bank has already signed a Memorandum of Understanding with Microsoft to support the capacities of public institutions and stimulate the demand for ICT applications and networks. Similar partnership arrangements will be explored with major private sector providers. These partnerships will be focused on leveraging financing and expertise and will make sure that they do not impede free and fair sourcing and procurement of ICT goods and services for the Bank and its member countries.

Results-Based Monitoring and Evaluation 6.15 In line with the Bank Group’s commitment to the managing for Results agenda, the ICT

Strategy is strongly focused on results. To this end, an ICT Results-based logical Framework has been developed and it is attached to this Paper (Annex 6). This results matrix stems from a log-frame analysis and summarizes the logic of development achievements behind the Bank Group’s ICT Operations Strategy.

6.16 The ICT focal point will track progress and results achieved under the strategic areas of focus

of the Strategy. 6.17 As per the Bank’s policy orientation, Management will provide the Boards of Executive

Directors with periodic evaluation reports with regard to the implementation of the Operations Strategy and the up-to-date utilization of resources used to respond to the areas of focus of the Strategy.

6.18 The Bank’s ICT interventions will be thoroughly evaluated in September 2010. Taking stock

of progress made and of changes that may have occurred by then in this fast-changing

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industries, the Bank will decide on how best to continue its support to the sector for 2010 and beyond.

7. Conclusion and recommendations 7.1 The Bank’s Operations Strategy for ICT Sector has outlined the challenges facing the ICT

sector in Africa and the issues related to the Bank Group’s assistance in the sector. It has also sketched out the strategic directions and a phased approach implementation plan that Management is proposing for boosting the Bank Group’s interventions in the development ICT infrastructure, policy and regulatory framework.

7.2 In the short run (next 24 months), the Bank will concentrate on two pillars: (i) regional and

national backbones -direct financing of broadband infrastructure and (ii) enabling policy and regulatory environment - support to Africa’s efforts to attract private financing flows through improvement of policy and regulatory frameworks, with the overriding objective of bringing about economic growth and poverty alleviation. The experience that will be gathered would form the basis of a reassessment of the Bank’s role in ICT in September 2010.

7.3 The Boards of Directors are invited to adopt the ICT Operations Strategy.

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Annex 1: Statistics of Telecommunications / ICT for Africa and the other continents.

Continents of the world Indicators

Africa Weight of Africa in the world

Americas Asia Europe Oceania The World

2004 863.14 13.5% 877.60 3811.68 786.22 32.64 6371.26 Population

(en million) 2006 922.03 14% 901.47 3892.77 813.64 33.37 6563.94 GDP per inhabitant

($ US) 2005 1073 18136 2916 19196 25840 6891

2004 26338.4 2.1% 293564.7 542853.3 327124.2 12631.3 1202522.1 Fixed lines

(x000) 2006 28507.7 2.3% 292528.2 611107.5 325020 12042 1269215.1 2004 79888.6 4.5% 376014.3 716332.3 570468.4 20096.5 1763033 Mobile lines

(x000) 2006 204994.5 7.4% 561138.5 1151517.8 807513.7 24096.4 2744250.7 2004 106227 3.5% 669579 1259185.6 897592.6 32727.8 2965312 Total fixed

+mobiles (x000) 2006 233502.2 5.8% 853666.7 1762624.8 1132533.7 36138.4 4018465.8

2004 3.05 33.45 14.24 40.20 38.72 15.06 Fixed lines for 100 inhabitants 2006 3.09 32.47 15.73 39.91 36.57 19.37

2004 9.25 42.85 18.79 72.5 61.57 22.08 Mobile lines for 100

inhabitants 2006 22.23 62.27 29.65 99.27 72.64 41.9

2004 12.3 76.29 33 114.1 73.8 46.54 Fixed+ mobile for 100

inhabitants 2006 25.32 94.6 45.27 139.2 98 61.2

2005 37600 2.9% 390,900 381,600 446,700 30,400 1,267.2 Telecom income(in

million $ US) 2006

2005 248 574 268 458 902 394 Income per fixed lines (in $ US) 2006

2005 8090 4% 43,980 80,800 63,850 4,780 201,500 Total investment (in million $ US) 2006

2005 74.5 701 65.6 79 144.3 71.7 Investment per telephone line

(fixed+ mobile) 2006 Tableau1: Statistics of telecommunications’ ICT for Africa and other continents * source: ITU

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ANNEX 2: Strategies, ICT infrastructure, sector reform, and IT Enabled Services in Africa

I. NATIONAL POLICIES AND STRATEGIES FOR APPLICATION OF ICTS IN DEVELOPMENT Level Advanced e-strategies Those with strategies

Countries with no strategies

Countries Egypt, Mauritius, Morocco, Rwanda, Seychelles, Senegal, South Africa, Tunisia

Algeria, Angola, Benin, Burkina Faso, Burundi, Botswana, Cameroon, Cape Verde, Central African Republic, Cote d’Ivoire, Djibouti, Ethiopia, Gabon, Gambia, Ghana, Guinea, Lesotho, Liberia, Kenya, Madagascar, Malawi, Mali, Mauritania, Mozambique, Namibia, Nigeria, Niger, Sudan, Swaziland, Tanzania, Uganda, Zambia, Zimbabwe

Chad, Comoros, Republic of Congo, Democratic Republic of Congo, Equatorial Guinea, Eritrea, Guinea Bissau, Libya, Sao Tome & Principe, Sierra Leone, Somalia, Togo

Opportuni-ties for the Bank’s interven-tion

Specific e-applications Electronic commerce and e-applications legislation ICT sector research and development Regional infrastructure e-government

Infrastructure development mainstreaming ICTs in key sectors policy and regulatory framework ICT sector development

Development of e-strategies infrastructure development mainstreaming ICTs in key sectors policy and regulatory framework ICT sector development

II. INFRASTRUCTURE DEVELOPMENT

Level Connected to submarine

cable Countries with sea coast and have opportunities to link to submarine cable

Landlocked countries

Countries Algeria, Angola, Benin, Cameroon. Cape Verde, Côte d’Ivoire, Djibouti, Gabon, Ghana, Libya, Mauritius, Morocco, Nigeria, Senegal and South Africa, Tunisia Others connected through transit – Botswana, Lesotho, Namibia, Swaziland, Mali

West Africa – Burkina Faso, Gambia, Guinea, Guinea-Bissau, Liberia, Mali, Mauritania, Niger, Sierra Leone and Togo, East Africa - Burundi, Comoros, Ethiopia, Eritrea, Kenya, Madagascar, Seychelles, Somalia, Sudan, Rwanda, Tanzania and Uganda Southern Africa - DRC, Malawi, Mozambique, Zambia and Zimbabwe Central Africa – Chad, Congo, Central African republic, Equatorial Guinea, Sao Tome & Principe

Botswana, Burundi, Central African Republic, Chad, Ethiopia, Lesotho Malawi, Mali, Niger Rwanda, Swaziland, Uganda, Zambia, Zimbabwe

Opportuni-ties for the Bank’s interven-tions

Cross-border connection Regional infrastructure Policy, regulatory and open access Access to underserved areas

Investment in international links National backbones Cross-border links Policy, regulatory and open access issues Access to underserved areas

Backhaul links National backbones Regional and cross-border links Policy, regulatory and open access issues Access to underserved areas

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ANNEX 2: Strategies, ICT infrastructure, sector reform, and IT Enabled Services in Africa (continued) III. REGULATORY FRAMEWORKS

Maturity Relatively advanced

regulatory framework Have regulatory bodies No regulatory body

Countries Botswana, Egypt, Kenya, Mauritius, Morocco, Nigeria, Senegal, South Africa, Tanzania, Uganda

Algeria, Angola, Benin, Burundi, Burkina Faso, Cameroon, Cape Verde, Chad, Cote d’Ivoire, Central African Republic, Comoros, DRC, Congo, Guinea-Guinea Bissau, Ethiopia, Gabon, Gambia, Ghana, Equatorial Guinea, Lesotho, Liberia, Libya, Mali, Madagascar, Malawi, Mauritania, Mozambique, Namibia, Niger, Rwanda, Seychelles, Sudan Togo, Tunisia, Zambia, Zimbabwe

Djibouti, Eritrea, , Sao Tome & Principe, Sierra Leone, Somalia, Swaziland

Opportuni-ties for the Bank’s interventions

Advanced policy and regulatory design (e.g. interconnection, broadband service pricing, converged regulatory framework)

Capacity building Regulatory design with focus on converged regulatory framework Addressing policy, legal and regulatory gaps that hinder infrastructure and access and ICT applications

Development of new legislations Capacity building Regulatory design Addressing policy, legal and regulatory gaps that hinder infrastructure and access and ICT applications

IV. COMPETITION

Level No competition in fixed segment No Competition in the Mobile segment

Monopoly in both fixed and mobile services

Countries Angola, Botswana, Burkina Faso, Benin, Burundi, Cameroon, Congo, Chad, Comoros DRC, Gabon, Gambia, Eritrea, Ethiopia, Liberia, Kenya, Malawi, Mali, Mozambique, Namibia, Nigeria, Rwanda, Sierra Leone, Swaziland, Sudan, Togo, Zambia, Zimbabwe

Comoros, Ethiopia, Eritrea, Sao Tome & Principe, Equatorial Guinea, Cape Verde, Guinea Bissau

Comoros, Ethiopia, Eritrea,

Opportuni-ties for the Bank’s interventions

Consolidation of sector reform and regulatory design

Sector reform for promotion of competition in all segment

Policy and regulatory design

V. IT-ENABLED SERVICES

Level Countries that have a significant ITES operations

Countries with potential for ITES market

Countries with limited potentials

Countries Egypt, Ghana, Mauritius, Morocco, South Africa, Tunisia

Kenya, Mozambique, Namibia, Nigeria, Rwanda, Senegal, Zambia, Zimbabwe

The rest of African countries

Opportunities for the Bank’s interventions

Research on the size of the market Prospecting further markets and financing opportunities Capacity building

Capacity on ITES including training ICT R&D strategies Incubator programs Skilled human resources development

Skilled human resources development Extending ICTs research and development in higher education ICT R&D strategies

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ANNEX 3: Alignment with other Bank’s strategies

ICT Strategy Focus Areas

Niche Area for Bank’s ICT Investment

Linkages with Bank’s Operation Strategies

Regional broadband infrastructure

Medium Term Strategy (improving infrastructure, regional integration, governance, higher education, private sector development); Private Sector Strategy (promotion of regional trade); Regional Operations Strategy (infrastructure development); Strategic Business Plan in Support of Regional Integration, Trade and NEPAD (promotion of infrastructure and trade).

National backbones development

Private Sector Strategy (building competitive infrastructure)

Development of regional and national broadband communications infrastructure

Connectivity to rural and underserved areas

Medium Term Strategy ( infrastructure development)

Promotion of regional policy and regulatory harmonization

Private Sector Development Strategy (improving investment climate)

ICT policy, regulation and legislative frameworks Technical assistance on

sector liberalization to resolve market efficiency gaps and ownership and open access issues of national broadband networks

Private Sector Development Strategy (improving investment climate)

Implementation of e-government

Governance Strategic Directions and Plan of Action (strengthening country systems for managing public resources, with an emphasis on oversight institutions and accountability systems)

Development of integrated e-country strategies

Strategy for Enhanced Engagement in Fragile States (policy dialogue, reform and stabilization) Knowledge Management Strategy (knowledge generation for development effectiveness)

Improving network use by government institutions, schools, universities and health institutions

Medium Term Strategy (building capable states); Governance Strategic Directions and Plan of Action (strengthening country systems for managing public resources, with an emphasis on oversight institutions and accountability systems)

Stimulating ICT use by government (public institutions, schools, universities, hospitals) and enterprises (To be considered after 24 months) Enhancing demand and

usage by enterprises and local ICT industry

Private Sector Development Strategy (supporting private enterprises) Strategy for Higher Education, Science and Technology (linking higher education, science and technology to the productive sector)

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ANNEX 4:. Potential Projects and Bank Roles Table 1: Potential Submarine Cable Projects and AfDB Group Roles Project Links Major Player ADB Group roles East African Submarine Cable (EASSy) US$ 265 Million

East and southern Africa IFC, EIB, Kfw, AfDB Financing US$ 15.4 million approved

SEACOM US$ 650 Million

East and southern Africa Herakles, Blackstone; Aga Khan Fund; Venfin; Convergence Partners; Shanduka Neotel

East African Marine System (TEAMs) US$ 82 Million

Kenya to UAE Government of Kenya (40%), Etisalat (UAE) (15%)

Infinity US$ 865 Million

Portugal to South Africa along the west coast of the continent

Infinity Telecommunications Group of Companies

FLAG India, east Africa, southern Africa

Reliance Group

Infraco VSNL, Neotel Latin America, Europe Glo-1 Nigeria, UK Globacom SAT4 South Africa to Portugal MTN, Vodacom, Telkom

Potential for public and private sector investment

Uhurunet (NEPAD Broadband)

East Africa, Latin America NEPAD, E-Africa commission Potential for public and private sector partnerships

Table 2: Potential Regional Projects and Bank's Role Projects/regions Links Route in KM Players AfDB group

opportunities and roles East African Regional backhaul network

Burundi, Kenya, Rwanda, Tanzania and Uganda and links to Djibouti, Eritrea, Ethiopia and Sudan

4367 World Bank - Regional Communications Infrastructure Program

Feasibility study addressing missing links

Southern African regional backhaul network

Backhaul links interconnecting SADC countries

14,757 World Bank - Regional Communications Infrastructure Program

Central African regional backhaul network

Links between Libreville-Franceville-Lekoni-Oyo-Brazzaville and a Cameroon-Chad-Central African Republic to connect the countries with link the SAT-3 landing station in Douala

4406 Investment required

West Africa regional backhaul network

Linking all ECOWAS countries with each other

14,285 Investment required

Northern – Western Africa

Algiers-Zinder-Abuja trans-Sahara link which has potential to link north Africa with west Africa

3277 Investment required

Feasibility study , financing missing links

by leveraging private investment and

partnerships

Table3: Potential National Projects and Bank's Role Projects/regions Links Route in KM Players AfDB group

opportunities and roles Eritrea Fiber optic international Gateway

Link to the EASSy submarine cable 216 Investment required Feasibility study

Seychelles fiber optic international Gateway

Backhaul links iLink to EASSy or SEACOM submarine cales

1961 Investment required Feasibility study , financing missing links

by leveraging private investment and

partnerships

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ANNEX 5: Africa Missing Links Although investment in ICT infrastructure in Africa has improved substantially over recent years due to mobile penetration, access to broadband infrastructure is very low. There is a significant gap with regards to international fiber links, regional connectivity, cross-border links and national backbone networks. The ITU estimates that around 92,000 kilometers of fiber link is needed to bridge regional gaps.

Regional backbone infrastructure required (in route kilometers)

Central Africa

Eastern Africa

Northern Africa

Southern Africa

Western Africa

TOTAL

Planned 4,406 4,367 3,277 14,757 14,285 41,092

Proposed 4,390 1,919 3,889 9,478 5,329 24,915

Total 8'796 6'286 7'166 24'235 19'524 66,007 Submarine Cable Planned (EASSy, TEAMS, Infinty)

Existing SubmarineCables (SAT-3/ WASC=14350Kms; SAFE=13,500Kms) 25,778

Total 91,785

Source: ITU

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ANNEX 6: ICT RESULTS-BASED LOGICAL FRAMEWORK FOR 2008 – 2010 OBJECTIVES EXPECTED IMPACT & RESULTS REACH PERF. INDICATORS (MEANS OF

VERIFICATION-) BANK’S INDICATIVE TARGETS & TIMEFRAME

ASSUMPTIONS, RISKS & BANK MITIGATION MEASURES

STRATEGIC GOAL Expand access to affordable and competitive information and communications infrastructure.

IMPACT 1. Digital divide bridged in RMCs; 2. Universal access to ICT promoted in RMCs; 3. Sustainable economic growth promoted in RMCs;

Beneficiaries - RMCs; - Rural populations in RMCs; - Urban population in RMCs.

Indicators 1. Digital Opportunity Index (DOI); 2. Annual GDP Growth Rate. Sources of data: International Telecommunications Union; Country Ministries of Economy and Finances; Country Ministries of telecommunications and communications.

Indicative Targets of all Development Partners (by 2018)

1. The average DOI value of several RMCs rises up to 0,75 by the end 2018 (In 2006, the highest DOI in the Continent was 0.5); 2. Annual GDP growth rate stands in average at least at 5% in RMCs by 2018.

PURPOSE OF THE STRATEGY Stimulate investments in the ICT sector at national and regional levels.

OUTCOME Improved ICT Connectivity in several RMCs.

Beneficiaries - RMCs.

Indicators 1. Number of Broadband subscribers; 2. International Internet bandwidth (bits per capita); 3. Internet Users and Internet subscribers (per 1,000); 4. Fixed lines and mobile phone subscribers (per1,000); 5. Percentage of rural households with Internet access. Sources of data: Country Ministries of telecom and communications, ITU.

Indicative Targets of all Development Partners (by 2012)

1. Double the number of broadband subscribers in RMCs; 2. Increased by 15 to 40% International Internet bandwidth, Internet Users, and Internet Subscribers in RMCs; 3. Increase by 15 to 35% fixed lines and mobile phone subscribers in RMCs 4. Increase by 15 to 20% percentage of rural households with Internet access

STRATEGIC OBJECTIVES Strategic Area of focus N0 1: 1. Develop regional and national broadband infrastructure. Strategic Area of focus N0 2: 1. Set up an enabling environment for the promotion of ICT.

INTERMEDIATE OUTCOMES Strategic Area of focus N0 1: 1. Approved Investment Projects; 2. Forged partenerships; . Strategic Area of focus N0 2: 1. Sound ICT Policy and Regulatory Frameworks fully operational in RMCs; 2. Enhanced private investment and PPP in delivery of regional infrastructure; 3. Improved PPP in delivery of national infrastructure.

Beneficiaries - RMCs; - Economic Regional Communities; - RMCs.

Indicators & Data Sources: Strategic Area of focus N0 1: 1.Number of Investment Projects prepared 2. Number of Investment Projects approved 3. Number of PPP forged . Strategic Area of Focus N0 2 1. Number of sound ICT policy and regulatory frameworks operational in RMCs; 2. Private financing flows. Source of data: Country sector ministries, ADB, United Nations, World Bank, UNESCO, ITU.

Bank’s Indicative Targets (by 2010) Strategic Area of focus N0 1: - 8 Investment Projects prepared - 5 Investment Projects approved (~ US$ 100 million) - 3 PPP forged -. Strategic Area of focus N0 2: - About fifteen sound ICT policy and regulatory frameworks fully operational in RMCs; - About 1 billion US$ of private funding mobilized for regional broadband; - About 1 billion US$ mobilized through PPP to implement national backbones.

Assumptions: 1. Supportive infrastructure such as electricity will be available. 2. The Bank will establish an institutional framework and mobilize resources to stimulate investments in infrastructure and respond to RMCs requirement in comprehensive manner. 3. RMC’s will continue to invest in the ICT sector and maintain the synergies between key building blocks such as policy and regulatory reform, sectoral application, human capacity development and access to broadband infrastructure.

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OBJECTIVES EXPECTED IMPACT & RESULTS REACH PERF. INDICATORS (MEANS OF VERIFICATION-)

BANK’S INDICATIVE TARGETS & TIMEFRAME

ASSUMPTIONS, RISKS & BANK MITIGATION MEASURES

ACTIVITIES

Strategic Area of Focus N0 1: 1. Completion of regional feasibility studies of regional broadband infrastructure; 2. Stimulating policy and regulatory dialogue to promote fair interconnection between countries; 3. Conduct of feasibility studies of national backbone; 4. Support to the implementation of national backbone studies; 5. Provision of advices and technical assistance on forging public/private partnerships and creation of business models to implement national backbones; 6. Finance rural communication as an integral component of its other infrastructure development program. Strategic Area of Focus N0 2: 1. Promotion of regional policy and regulatory harmonization dialogue; 2. Policy harmonization with regard to open access, interconnection, fair trading and the stimulation of private investment; 3. Policy and regulatory reform at national levels; 4. Technical assistance in policies on e-applications and Internet security.

MAIN OUTPUTS Strategic Area of Focus N0 1: 1. Feasibility studies on regional broadband infrastructure carried out in all regions; 2. Policy dialogue conducted between countries; 3. National backbone studies completed in number of RMCs; 4. National backbones implemented in about 15 countries; 5. RMCs empowered in forging PPP and in creating business models to implement national backbones; 6. Rural access integrated into Bank’s infrastructure projects for a number of RMCs; Strategic Area of Focus N0 2: 1. Studies carried out; forums organized; discussions and consensus promoted; 2. Policies and regulations harmonized in all regions; 3. Technical assistance provided in sector reform to advance national backbone network and universal access launched; 4. RMCs empowered in policy formulation to formulate e-commerce and e-application policies.

Beneficiaries - RMCs; - Economic Regional Communities. - RMCs; - Regional institutions.

Indicators of main outputs Strategic Area of Focus N0 1: 1. Number of regional studies completed; 2. Number of policy dialogue organized; 3. Number of national backbone studies carried out; 4. Number of backbones studies which are implemented; 5. Number of RMCs empowered; 6. Number of Bank projects that integrate rural ICT access to other infrastructure projects. Strategic Area of Focus N0 2: 1. Number of studies carried out; number of forums organized; areas where consensus is reached; 2. Number and areas where policies are harmonized; 3. Number of countries that received technical assistance in policy and regulatory reform; 4. Number of institutions and RMCs that received technical assistance; number of countries that developed policies on specific areas such as e-government, e-commerce, e-transaction, e-health, e-education, etc.

Bank’s Indicative Targets Strategic Area of Focus N0 1: 1. Feasibility studies completed for all regions by 2009; 2. At least two policy dialogue per year; 3. Three national backbone studies per year; 4. At least one study implemented per year; 5. About two RMCs per year; 6. About 3% of Bank infrastructure projects incorporate rural ICT access each year. Strategic Area of Focus N0 2: 1. Two studies per year; At least two forum per year; 2. Two policy areas per year; 3. Two countries per year; 4. Three countries per year;

Risks: 1. Possibility for over building of fiber networks; 2.Difficulties in mobilizing resources 3. Inefficient coordination of ICT activities within the Bank Mitigation Measures: 1. Developing and implementing a sound strategy of advocacy and resources mobilization Bank monitor 2. Establishing an ICT Focal Point with sufficient resources (skills, missions, consultants, etc..) 3. Strengthening internal capacity of the Bank, including that of the newly ICT Focal Point