GSMA Calls for Policy Reforms to Create Economic Value by Closing Zambia’s Digital Divide

 2^nd October 2024, Lusaka: The GSMA has launched the Driving Digitalization of the Economy in Zambia: Leveraging Policy Reforms Report, outlining how digital transformation can accelerate Zambia’s social and economic growth and create new opportunities for millions of people. The report focuses on the role of digitalisation in supporting the government to achieve the country’s objectives, as laid out in the country’s Vision 2030 and subsequent national development strategy documents up to and including the 8NDP.

The report outlines several policy recommendations that, if implemented, would accelerate this process and support the government in major pillars of the national development strategy.

Widespread adoption of digital technologies across the public and private sectors can boost productivity, stimulatate innovation, and raise living standards. As the foundation of this transformation, the mobile telecom sector has been recognised by the Government of Zambia through its National Information and Communications Technology Policy 2023. Digitalisation promises to improve job creation, formalise the economy, and drive more efficient resource use, ultimately leading to greater economic growth and improved public resources.

However, the Zambian mobile sector faces challenges, including financial sustainability, service affordability, and the slow pace of digital adoption. Addressing these challenges is crucial to ensuring the sector’s continued growth and impact. The GSMA report calls for several policy reforms to unlock Zambia’s digital economy potential, accelerate digital and financial inclusion, and deliver wide-ranging benefits to both citizens and the government.

Policy Reforms for Zambia’s Digital Future

1. Reduce sector-specific taxes and fees: Eliminate the 17.5% airtime excise duty, one of the highest in the region, and reduce the 35% corporate income tax applicable to the telecom sector to 30% in line with the other sectors of the economy.
2. Sustain investment telecom infrastructure: Designate telecom infrastructure as Critical National Infrastructure, ensuring it is exempted from load-shedding.
3. Ease regulatory constraints on mobile retail tariffs: Tariff regulation should only occur where a market failure has been identified following a market study, with prices determined by healthy competition.
4. Promote financial inclusion through mobile money: Lift restrictions on mobile money charges and remove the mobile money levy to expand access, particularly in underserved areas.
5. Stimulate demand through innovation: Invest in digital skills development and promote widespread adoption of emerging technologies to drive further digitalisation.

By implementing these reforms, Zambia could bring 2.1 million more citizens online through mobile by 2028, contributing significantly to closing the 68% usage gap. This will also support broader economic objectives, driving growth in sectors such as agriculture, trade, and manufacturing.

Hon. Felix C. Mutati, Minister of Science and Technology, Zambia reacted to the report: “Digitalisation significantly benefits social and economic growth by enhancing productivity, reducing costs, and increasing access to global markets by leveraging the Africa Continental Free Trade Area. It improves labour productivity transparency and minimises the shadow economy.  Digitalisation is a key driver in improving social and economic welfare. It fosters social inclusion by enhancing access to information and government services and significantly improves public service delivery. Moreover, it contributes to job creation, food security, and quality healthcare services. The Government of Zambia is committed to leveraging technology to drive the digitalisation of the economy and ensure that citizens can unlock the true value of technology.’’

Angela Wamola, Head of Sub-Saharan Africa, GSMA, said: “The Zambian government has demonstrated strong commitment to digitalisation through its National ICT Policy 2023 and the Eighth National Development Plan. Now, more than ever, collaborative action between the government, industry, and stakeholders is needed to create the enabling environment for digital transformation. The future of Zambia lies in digital connectivity. With the right policies, we can close the digital divide, empower communities, and unlock new economic opportunities. The Zambia Digital Economy Report provides a clear roadmap to ensure that every citizen benefits from the digital revolution. Now is the time for bold action.”

-ENDS-

About GSMA 
The GSMA is a global organisation unifying the mobile ecosystem to discover, develop and deliver innovation foundational to positive business environments and societal change. Our vision is to unlock the full power of connectivity so that people, industry, and society thrive. Representing mobile operators and organisations across the mobile ecosystem and adjacent industries, the GSMA delivers for its members across three broad pillars: Connectivity for Good, Industry Services and Solutions, and Outreach. This activity includes advancing policy, tackling today’s biggest societal challenges, underpinning the technology and interoperability that make mobile work, and providing the world’s largest platform to convene the mobile ecosystem at the MWC and M360 series of events.  

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