Technology can be used to
spur business growth in developing countries, a UN agency says. The
Internet, computers and mobile phones facilitate banking services and
improve access to market information.
Information and communication
technology (ICT) enables private sector growth in developing
countries, according to report published Wednesday by the United
Nations Conference on Trade and Development (UNCTAD).
The African ICT sector is
growing rapidly. Last year, there were close to 500 million mobile
phone subscribers. But there are wide disparities across the African
continent. In 2010, less than one in 10 Ethiopians had a mobile phone
compared to more than seven in 10 Ghanaians, according to the
International Telecommunications Union. This year, Ghana was
reclassified by the World Bank as a lower middle income economy.
Despite Ghana's high mobile
phone usage, ICT has yet to make a substantial contribution to the
country's private sector development, according to the World Bank. It
estimates 80 percent of the business sector is informal.
"The IT revolution [in
Africa] is enabling smaller farmers to have access to information
which they didn't have earlier, but not much has changed for larger
companies," said Sebastian Kahlfeld, a senior fund manager at
DWS Investments, Deutsche Bank's investment arm.
Mobile phones in particular
are enabling access to services like banking and information,
according Sebastien Dessus, the World Bank's lead economist for
Ghana. "In theory, [ICT] can play a role in enlarging markets
because access to information improves and transaction costs are
reduced," he noted.
Farmers now use mobile phones
to obtain market information on the latest prices for their crops. In
Ghana, cashew nut farmers can use a phone application to compare
trader bid prices. And since 2008, the Ethiopia Commodity Exchange
has granted farmers access to real-time information via text
messages, electronic display boards and a website.
Kenya's mobile banking
system, M-Pesa is bringing banking services to millions. The service
has 20,000 agents in the country compared to 400 for the largest
bank, according to UNCTAD ICT analysis chief Tobjoern Fredriksson.
Apart from providing banking
services, ICT has also helped create employment for thousands since
it was launched in 2007. The service, which was developed for
person-to-person transactions, is now being used by small
entrepreneurs to carry out payments, Fredriksson said.
But technology is not
only good for enlarging the market and empowering small-scale
businesses, it can also be used to fight corruption, according to
UNCTAD. ICT improves transparency and accountability, said Johan
Hellstroem, a researcher at Swedish Program for ICT in Developing
Regions. "The very presence of mobile phones decreases
corruption and secret activities because it leaves footprints and
audit trails", he added.
Corruption is third leading
constraint to doing business in a country after electricity and tax
rates, according to a 2010 World Bank survey.
Crowdsourcing techniques like
Kenya's Ushahidi can be used to report incidents of bribes or
corruption. Similar initiatives are springing up all over Africa;
with stopthebribe in Nigeria, and No bakshish in Cameroon. Through
such initiatives and global ones like bribespot and corruption
tracker, ICT is empowering people to take a stance against
corruption, according to Transparency International (TI).