Minister of Information and Communications Technology Shadric Namalomba has called for increased access to the internet while addressing the cost of smartphones, digital literacy and access to foreign currency to maximise digital economy gains.
The minister, who spoke at the Digital Africa Summit in Lilongwe where findings on Malawi’s digital economy were unveiled and government, said digitalisation currently contributes about 6.5 percent to Malawi’s gross domestic product (GDP), but that figure could rise to about 13 percent by 2030 if more Malawians gain meaningful access to the internet.
“Government will work with the industry to develop an action plan addressing taxation, mobile-money levies, access to foreign exchange, digital literacy and innovation,” said Namalomba.
He highlighted foreign exchange shortages as a constraint on investment, saying mobile network operators need to regularly upgrade equipment but face difficulties accessing foreign currency.
The remarks come despite extensive mobile broadband coverage in the country. According to the GSMA, about 87 percent of Malawi’s population is covered by 4G networks and 92 percent by 3G, yet only about 12.5 percent use internet services.
The figures suggest that the country’s digital divide is increasingly being driven not by network availability, but by barriers such as the affordability of devices and services, limited digital literacy and lack of access to relevant content.
The GSMA has proposed that telecommunications be designated as critical national infrastructure to facilitate access to foreign exchange. It has also called for a spectrum roadmap and longer-term licences to provide greater certainty for investors.
In her remarks, GSMA Africa Office senior director of public policy and communications Caroline Mbugua said affordability of services and smart devices was the biggest barrier to internet adoption in the region, followed by digital literacy, relevant content, trust and online safety.
“Affordability of service and smart devices is the main barrier in the region, followed by digital literacy,” she said.
Mbugua said value-added tax (VAT) and excise duties can account for up to 27 percent of the cost of such devices, urging government to remove excise duty on data and mobile services, reconsider mobile-money levies and reduce taxes on entry-level smartphones.
The recommendations, however, have raised questions about the balance between increasing digital adoption and maintaining government revenues from telecommunications and devices.
Minister of Finance, Economic Planning and Decentralisation Joseph Mwanamvekha cautioned against viewing taxation as the only obstacle to digitalisation.
“It’s not like once you remove the taxes, then you will achieve digitalisation,” he said, pointing to infrastructure, network availability, digital literacy, education and service tariffs as other constraints.
Mwanamvekha, nevertheless, said some tax measures were temporary and could be reviewed once economic conditions stabilise.
The Summit brought together government ministries, the Malawi Communications Regulatory Authority, Airtel Malawi plc, TNM plc and other stakeholders.
During the summit, regulators, mobile network operators and other stakeholders discussed investment, regulation and digital adoption.
