Overview of Rwanda’s ICT Context

Dr. Félicien UsengumukizaSenior Research Fellow

Institute of Policy Analysis and Research (IPAR-Rwanda)

felicien.usengumukiza@ipar-rwanda.org

Kigali, July 28th, 2009

Contents

• Introduction

• The role of ICT in Economic development

• Situational Analysis of ICT sector in Rwanda

• The place of ICT in implementation of Vision 2020 program

• SWOT Analysis of ICT sector in Rwanda

• Summary and Recommendations

Rwanda’s Economic Development is based on clear and defined program

EDPRS, 2012

MDGs, 2015

VISION 2020

Goo

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over

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Capa

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and

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A Pr

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-led

Econ

omy

Infr

astr

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Dev

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Prod

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Regi

onal

and

Inte

rnati

onal

Ec

onom

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tegr

ation

ICT is a cross-cutting area of

Vision 2020

ICT is an engine of economic performance for countries

Reduction of transaction costsIncrease productivity

New trade opportunitiesAccess to knowledge Increase competitionBetter communication

The ICT-induced changes are transforming the rules of competition and giving rise to new types of competitive strategies: innovation-driven competition, time-based competition; mass customization; lean manufacturing, and demand-driven, built-to-order products (Fine, 1998).

ICT can also facilitate the rapid growth for foreign direct investment (FDI) allowing global business management along the whole supply-chain through effective information and communication networks.

A reduction of transaction costs and times can help developing countries to take advantage of the opportunities resulting from trade liberalization.

ICT has drastically cut long-standing obstacles to communication: time and distance. New communication technologies allow companies to source inputs independent of location.

ICT Competitiveness refers to a country’s capacity to exploit Information and communication technology in order to effectively participate in the global information economy.

5

ICT CompetitivenessICT Competitiveness

ICT InfrastructureICT Infrastructure ICT EnvironmentICT Environment

ICT LawsICT LawsHuman ResourcesHuman Resources

35% of total FDI in SSA was from telecom

Telecom FDI versus Total FDI in SSA (2000-2004)

… and investments in SSA are mostly concentrated on ICT

Source: World Bank WDI (2007)

All over the world, the Mobile Phone witnesses a spectacular penetration rate in one decade

Global ICT Development, 1998-2008

Source: International Telecommunication Union, 2008

0

10

20

30

40

50

60

7019

98

2000

2001

2002

2003

2004

2005

2006

2007

2008

Per

100

inha

bita

nts

Fixed telephone lines

Mobile cellular telephone subscriptions

Internet users

Fixed broadband subscriptions

Mobile broaband subscriptions

As in many other countries, Rwanda recorded a spectacular increase rate of Mobile phone in one decade

0

200000

400000

600000

800000

1000000

1200000

1400000

1600000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Mobile subscribers

Fixed phone subscribers

Internet subscribers

Rural phones

ICT Penetration in Rwanda (2000-2009)

Source: RURA, 2009

0.345.430.73

0.65

42.11

8.71

0.17

15.5

3

0.3

31.37

1.25

0.53

26.82

7.84

3.38

38.54

6.93

0

10

20

30

40

50

60

Burundi Kenya Rwanda Tanzania Uganda Africa

Internet users per 100 inhab.

Mobi le subscribers per 100 inhab.

Fixed phone per 100 inhab.

ICT Penetration in the EAC Countries, 2008

In comparison with its counterparties of the EAC, Rwanda is not yet attractive in terms of ICT penetration

Source: ITU, ICT indicators, 2009

Fixed phone penetration is growing slowly even in many cases decreasing. Rwanda remains on the bottom of the list of EAC Countries

10

Rwanda

Africa

0

0.5

1

1.5

2

2.5

3

3.5

4

2000 2001 2002 2003 2004 2005 2006 2007 2008

Fixed phones penetration in EAC Countries, 2000-2008

Burundi

Kenya

Rwanda

Tanzania

Uganda

Africa

…. and Mobile phone penetration is growing rapidly in all countries and Kenya is above the African average.

11

Mobile phone penetration in EAC Countries, 2000-2008

Kenya

Rwanda

Tanzania

Burundi

Uganda

Africa

0

5

10

15

20

25

30

35

40

45

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Internet is also growing significantly particularly in Uganda.

12

Internet penetration rate in EAC Countries, 2000-20008

Source: ITU, 2008

Mobile phone and internet penetration rate reached more than 1000% in EAC countries in one decade

13

% of Mobile phones penetration in 2000-2008 % of Internet penetration in 2000-2008

2172

10026

2695

9803

51572025

0

2000

4000

6000

8000

10000

12000

Burundi Kenya Rwanda Tanzania Uganda Africa

912

2639

5000

1041

4900

1260

0

1000

2000

3000

4000

5000

Burundi Kenya Rwanda Tanzania Uganda Africa

As ICT network infrastructure is currently concentrated in Kigali City, ICT penetration rate is also higher in Kigali in comparison with Provinces

14

0 2 4 6 8 10 12 14 16

Kigali City

Southern Prov.

Western Prov.

Northern Prov.

Eastern Prov.

Total Total HH with phonesFixed & Mobile PhonesMobile PhonesFixed Phones

Due to ICT market liberalization, the monopoly spirit is broken with participation of different companies to the market.

Number of telecom network operators and their respective number of subscribers

Source : RURA, December 2008

Service Licensed Operators Number of Subscribers Market share (%)Fixed Telephony Rwandatel

MTN Rwandacell Artel International*

16,770820

99.5%0.5%0%

Mobile Telephony MTN RwandacellRwandatel

1,158,674163,963

87.6%12.4%

Internet Service Provision

RwandatelISPAMTN RwandacellNew ArtelAltech Stream RwandaValue Data Rwanda*Star Africa Media*Greenmax*Augere Rwanda*Comium*

4,18767

4,0211511900000

49.5%0.79%47.6%1.78%0.22%

0%0%0%0%0%

Pay-TV GTVStar Africa MediaTele 10

6175,1051,543

8.49%70.26%21.23%

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Basic service per minute local call 2004 2005 2006 2007 2008 2009 proj.Fixed line usage tarrifs 14 14 33 33 33 33Fixed line installation charges 30,000 30,000 30,000 30,000 30,000 30,000Mobile contract usage tarrifs - MTN 104 114 114 114 81 81Mobile contract usage tarrifs - Rwandatel 50 50 70 70Mobile prepaid usage tariffs - MTN 133 147 147 147 100 100Mobile prepaid usage tariffs -Rwandatel 55 55 80 80Mobile phone handset cost 90,000 12,000 12,000InternetFixed line internet usage tariffs - MTN 45,000 45,000Fixed line internet usage tariffs - Rwandatel 45,000 45,000Mobile phone internet usage tariffs - MTN 20,000 20,000Mobile phone internet usage tariffs - Rwandatel 35,000 35,000Broadband InternetFixed line internet usage tariffs - MTN 190,000 190,000Fixed line internet usage tariffs - Rwandatel 200,000 200,000Mobile internet usage tariffs - MTN 20,000 20,000Mobile internet usage tariffs - Rwandatel 35,000 35,000

RURA, 2009

ICT Basic services and tariffs

The more ICT Market enters into open competition, the more consumers are getting better services.

The increase in mobile phone services has been accompanied by decrease of costs of connections and handsets

ICT remains the most attractive area for Foreign Direct Investment

17Source: RDB/RIEPA, 2007

Rwanda’s Investment by sub-sector, 2006

To this end, ICT has a significant impact to Socio Economic Performance to the country. This trend has also a positive impact to the economic growth

Socio Economic Indicators 2003 2004 2005 2006

1. Total Investment 3,723,085,000 2,306,143,000 5,665,153,000 5,026,461,000

2. Investment revenue 15,663,469,000 20,056,201,000 18,812,518,000 33,144,313,000

3. Taxes 3,735,804,213 6,512,211,986 6,607,008,574 9,121,399,468

4. Direct job creation 128 131 145 152

5. Indirect job creation 1,450 2,600 3,560 5,820

6. Universal Access Fund 171,774,695 166,202,866 295,344,085

Source: Nsengiyumva Albert et al., Pro-Poor ICT Project Report – Rwanda: A Community-driven Network , July, 2007

ICT Sector Contribution to GDP, 2005

Source: TMG, Inc., 2008

ICT Expenditure, 2005-2012

Source: MINECOFIN, 2009

In the framework of Vision 2020, GoR is committed to use ICT in most of its activities in order to facilitate the rapid socio-economic development

1. Education2. Human Resource Development

3. Infrastructure, Equipment and Content

4. Economic Development

5. Social Development

6. E-Government and E-Governance

7. Private Sector Development

8. Rural and Community Access

9. Legal, Regulatory and Institutional provisions and standards

10 . National Security Law and order

1. Education2. Human Resource Development

3. Infrastructure, Equipment and Content

4. Economic Development

5. Social Development

6. E-Government and E-Governance

7. Private Sector Development

8. Rural and Community Access

9. Legal, Regulatory and Institutional provisions and standards

10 . National Security Law and order

Agricultural Based

Economy

KnowledgeBased

Economy

By 2020

Kigali Metropolitan

Network

Kalisimbi Project

E-GovernmentNational

Data Center

NICI IIINICI I NICI II NICI IV

EASSY Project

Rwanda National

Backbone Project

Regional Communication Infrastructure

Project Kigali ICT

Park

The EASSY Project to which Rwanda is integrated will contribute significantly to Rwanda’s integration to the world economy.

20

The implementation of this project will allow Rwanda to become in ICT hub in the region

21

Source: RITA, Mid-term Evaluation of the NICI 2010 Implementation for RITA, December, 2008

Although the NICI II is mostly on Infrastructure phase, GoR recorded a good number of achievements.

NICI 2010 Implementation progress

Through NICI program, most of activities are now based on E-Sector

E-Education

- One Laptop per Child project: 100,000 computers distributed to different primary schools

- E-Schools in secondary school

- Regional ICT Training and Research Center (RITC)

- E-Learning

- Distance Learning

- Rwanda Education and Research Network

- GIS, Rwanda Development Gateway

E-Education

- One Laptop per Child project: 100,000 computers distributed to different primary schools

- E-Schools in secondary school

- Regional ICT Training and Research Center (RITC)

- E-Learning

- Distance Learning

- Rwanda Education and Research Network

- GIS, Rwanda Development Gateway

E-Health:

- An open-source Medical Records System that tracks patient-level data

- TracPlus and TRACnet – Monthly monitoring of infectious diseases including HIV/AIDS, TB, and Malaria

- Telemedicine – Information and communication technology (ICT) used to deliver health and healthcare services

- Mobile e-Health- use of mobile technology in improving health delivery in Rwanda

- Health Management Information Systems (HMIS) – systems that integrate data collection processing, reporting, and use of the information for programmatic decision-making.

E-Government

- Fiber optic Installation, connectivity of a good number of schools, hospitals and other public institutions

- Public Access Channels (12 Tele centers- Desks are already operational)

- Kigali ICT Center

- Smart National Cards, ID, E-business

E-Government

- Fiber optic Installation, connectivity of a good number of schools, hospitals and other public institutions

- Public Access Channels (12 Tele centers- Desks are already operational)

- Kigali ICT Center

- Smart National Cards, ID, E-business

E-Agriculture

- Agricultural Management Information System (AMIS) is an exchange platform for all stakeholders of the agricultural and livestock sector

- E-soko project seeks to empower farmers to enable them make more informed market pricing decisions and ultimately more successful farming

Through NICI program, most of activities are now based on E- Sector (Cont’d)

Ministry in Charge of Science, Technology and Research

RDB/RITA RURA

Ministry of Infrastructure

Institutional arrangement

The development of ICT sector needs cooperation of these institutions.

Although the country witnesses a good number of challenges, the opportunities are also considerable and the future is promising

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STRENGTHStrong political will in support of ICT Existing of National ICT Policy, NICIICT sector budget is on par with OECD countries at 1.6 percent, far above the African average Smallness of the countries would facilitate ICT Network infrastructureStrong Institutional organization (RDB/RITA, MINISTR, RURA, etc.ICT is the most attractive in terms of Investment E-Government and E-Governance

THREAT

Existing of strong competition in the region. Each EAC member is aiming to become in ICT hub in the region.Potential ICT crime and difficult to control itLoss of job due to ICT application

OPPORTUNITIESRegional Communication Infrastructure Project (RCIP) Kalisimbi ProjectKigali Metropolitan Network and Wibro Mobile Wimax Technology Rwanda National Backbone ProjectRwanda is integrated to the EASSY Project National Data CenterRegional interconnectivity (MTN Rwanda, MTN Uganda, Safaricom, Vodacom, Com Burundi

WEAKNESSESLack of necessary technical and professional level of human resourcesInsufficient of electricity which is a prerequisite to the ICT accessibilityInadequate financial resourcesHigh cost of communication in comparison with neighboring countriesLack of awareness about ICT and the benefits of e-government in both urban and rural areas Weak private sector Existing of high rate of illiteracy

ICT SWOT Analysis

The implementation of the program requests a particular attention of certain measures.

Capacity building and training: ICT Skills, Training and Awareness

Capacity building and training: ICT Skills, Training and Awareness

Basic infrastructure needs a rapid improvement as a prerequisite to ICT development

Basic infrastructure needs a rapid improvement as a prerequisite to ICT development

Development of Network infrastructure technologies especially in rural area

Development of Network infrastructure technologies especially in rural area

Investment in terms of softwares production and their commercialisation

Investment in terms of softwares production and their commercialisation

More Cooperation with stakeholders including Public-private Partnerships in ICT development

More Cooperation with stakeholders including Public-private Partnerships in ICT development

Retention policy for trained staff with high skills in ICT

Retention policy for trained staff with high skills in ICT

Dissemination of information and research related to ICT in order to share experiences and to avoid duplication and waste of time.

Dissemination of information and research related to ICT in order to share experiences and to avoid duplication and waste of time.

“It is expensive to built a road, but not to built it is

more expensive”

Italian Proverb

Thank you for your Attention