The Disarray in Afghan Digital Economy

Digital transformation has no specific key, it is a roadmap based on concrete foundations and inclusive approach.

When the National Unity Government was formed under the president-ship of Dr. Ashraf Ghani, many hoped the technocrat would enable the development of ICT sector in the Afghanistan. Dr. Ghani presented at the Open Source Conference in Kabul back in October 2011 where he emphasized on the use of open source software for developing economy and bringing transparency in the public governance. However, the government has yet to deliver something concrete to the public. Most of the current ongoing projects and deliverables were initiated by the previous government and the new government is making desperate efforts in completing these projects. Transition of power, government bureaucracy, charges of corruption, and technology going outdated because of these postponement have caused major delays in projects delivery. But the above challenges were universal to all other sectors as well, However, ICT sector is the major contributor to the country’s economy with 17.34% (60 Billion Afghanis) share with only 0.15% (1,300) of the overall private firms in the country, as indicated in the Business Development Survey by the Central Statistics Office (CSO) of Afghanistan for the year 2015. In the CSO’s 2015 report, the only sector that is contributing more than ICT is the ‘Trade and Vehicle Repair’ with 167 Billion Afghanis but this revenue comes from 426,000 firms. The third in the list is ‘Manufacturing, Gas, Electricity and Water’ with 43 Billion Afghanis coming from 127,000 firms. If we do a little math on the amount of revenue per firm in each of these categories we see that each of the ICT firms bring in 46,153 Afghanis to the economy while the other two categories bring in only 338 and 392 Afghanis per firm only. ICT sector is contributing 120 times more than the other two economic categories.

On average every ICT firm brings in 46,153 Afghanis to the economy 120 times more than any other sector.

Over the past two and half years, the ICT sector received major setbacks primarily because of the hiring and firing of individuals for the top public posts such as Advisor to the President, Minister of MCIT, Deputy Minister of IT at MCIT and Directors of major Independent entities working in the ICT sector. Secondly, the lack of efforts by these individuals in bridging the industry-government-academia gap. One might also say that they were there in these positions for such a short period of time that they hardly developed an understanding of identifying the major players in the market. But others say that the market is so small with 6 telecom companies and 1 major Internet Service Provider along with 50 odd tertiary-level ISPs and a few other government entities that making a list of these cross-sector individuals would only require little effort and perhaps a few consultations to get everyone onboard.

The ICT sector had three senior Advisors to the President in the past two and a half years. Not all at the same time but with a lot of overlap, confusion and disarray in their role and scope identification and off course policy development. One thing common among these three individuals is that they are all over the age of 60 coming from USA and Germany after a few decades. Every one of them had a special focus on a certain area of ICT. One had a special interest in Online Education while the other had no interest in Online Education whatsoever but was making every effort towards electronic identification and electronic payment. The third advisor, though still new to the country context that has evolved over past 15 years, is making efforts towards electronic government. But e-government, e-payment, e-banking, e-identification (read my previous post on e-tazkira), e-Education or any other e-transaction would highly depend on a solid infrastructure throughout the country, quality service, high uptime, added security, and laws and policies protecting the rights of the users and/or consumers.

In the month of August 2015, spokesman of MCIT resigned accusing the ministry officials of major corruptions including Salaam network, a government public owned telecom company, not being able to compete with private companies after US$ 65 million investment. The ex-spokesman also accused that the mobile phone coverage has reduced from 90% and the data (internet) coverage has reduced from 50% in the country.

The Minister of MCIT was suspended for major corruption charges in early 2017. The minister was suspended after an audit was performed by the President’s office on 10% telecom tax on mobile phone topups. The 10% telecom tax was imposed by the President’s office in mid 2015 without key stakeholder consultation, proper planning and technology availability.

Under the new acting Minister the Ministry is going through major changes. One of them being the resignation of the Deputy Minister of IT at MCIT during the first week of March 2017. The post has since then been empty creating a vacuum in the government. The other major change at the MCIT is the independence of Afghanistan Telecommunication Regulatory Authority (ATRA)’s from the ministry. With these major changes the Ministry remains focused on postal services, management of Afghan Telecom and Salaam Network, and directorates such as Information Security and E-government hanging in the air.

In April 2017, Independent Joint Anti-Corruption Monitoring and Evaluation Committee (MEC) prepared a report on the anti-corruption plan of MCIT and their findings concluded that MCIT has “entirely failed to implement anti-corruption plan”.

About the 10% telecom tax the MEC commission has also reported that “it is almost impossible for the staff of MCIT to determine if the manual reports of private telecommunication companies represent the actual amount of tax”.

In regards to e-government the MEC commission stated that “the E-government Directorate of the Ministry failed to figure out which services should be prioritized first due to lack of consultations with experts, donors and other government officials”.

The MEC commission also reported that “the entire tashkeel is outdated” having no Monitoring and Evaluation unit at all.

MEC also provided reasons for the above failures which includes lack of genuine commitment among top leadership, political intervention, nepotism, complicated organizational Tashkeel, and absence of merit based recruitment.

ICT sector, with the capacity of doing 120 times better than any other sector in the country, is not receiving the needed acknowledgement from the government. The government, being the enabler of the sector, is showing disregard to the sector. The ex-spokesman of MCIT accused that telecom companies (private and public) have lost mobile and data coverage over the past few years.

With no deputy ministry of IT, ATRA going independent, advisors at the President’s Office taking short term roles, and reports of failures by the MEC puts the entire ICT economy in complete disorder. The institutional changes, ongoing corruption charges and ongoing project are proving to be major setbacks to the sector. The ICT sector needs a comprehensive study that should highlight the strength and weaknesses of the current infrastructure, the priority applications for public service delivery, and the legislature requirement to support these applications and also protect the interest of the citizens. The previous government’s projectized approach to ICT sector has created mismatch among infrastructure, skillset and the application of ICTs. The government has also failed to address critical infrastructure development and/or improvement to technologies such as National Internet Exchange point (IXP), and deployment of root server instances and caches servers for major information intermediaries.

While the government is still applying patches on previously initiated applications they are failing to address the needs of the sector. The digital economy needs a strategy that addresses broadband infrastructure, openness in policy development, community engagement and various digital literacy programs running concurrently.