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Public Private Dialogue supports ICT to sustain Somalia’s digital boom

When you think of Somalia, you rarely think of ICT expansion. Yet Somalia may actually be Africa’s best example of ICT’s transformational impact. The country offers the continent’s cheapest phone rates, full domestic mobile network coverage, an expanding 4G network, and more mobile money transfers than cash transactions. In Somalia 73 percent of the population over 16 years old use mobile money services as compared to 16 percent of the adult population in Sub-Saharan Africa and 2 percent of the global population.

If Somalia’s ICT successes are significant, both the country’s private ICT players and the Federal Government recognize the need to expand and to regulate the market. Somalia’s ICT businesses are eager to secure their investments and to roll out technological advancements, which require spectrum management agreements. The government on its part, aims to generate revenue for investments, to support businesses, as well as contribute towards security and sustainability. Somalia’s government currently collects only an estimated 2 to 3 percent of its GDP from revenues as compared to an average of 17 percent for other sub-Saharan African countries.

To provide the legal basis for this planned expansion, the Somali Public Private Sector Dialogue (SOMPPD), working with the Ministry of Post, Telecommunications and Technology brought leaders from Somalia’s ICT industry and Somalia’s Federal Government to work on the Communications Act in February 2017 and through a process of consultations over the following months, finalized the wording.

On 21st of August 2017, the Communications Act became the first act passed by the Upper House of this Somali parliament having unanimously passed through the third reading of the lower house of the Somali Parliament on August 9th. On Monday 2nd October 2017, the President signed it into law.  

“Frank and constructive discussion can help to remove blockages that are currently holding up the passing of the Communications Act and which can advance Somalia’s ICT industry as a whole.”

Director General of MPTT Mr. Ahmed Daljire (March 2017)

The significance of the new Act is that it establishes a new regulatory authority (National Communications Agency) and provides a legal basis for licensing the current operators and introducing new competition. The Act is critical for the finances of the Government, as ICT sector revenue is equivalent to around 11 per cent of GDP but has hitherto contributed very little in terms of taxation. The Act also provides a solid platform for the future development and stable regulation of mobile money.

The passage of the new Act was a textbook case in the power of constructive and systematic dialogue between Government and the Private Sector.

This process has been ongoing since 2012, with earlier versions of the Bill having been presented to the Parliament in 2012, 2014 and 2016. But previously they have failed to gain assent.

With the support of the World Bank, Government and Private Sector identified the passage of the Communications Act as an early win and it was identified as one of the key priorities in the agreement between Government and Private sector at the London Somalia conference in May 2016.

In March 29-31 2017, SOMPPD brought together key members of the ICT Sector and Government officials key to the passage of the Act under the leadership of the DG of the Ministry of Post and Telecommunications.  The meeting in Nairobi lasted 3 days, and included training/ information provision on the sector by technical experts from the World Bank ICT team (to provide a common knowledge base) as well as dialogues within and between the sectors.

The working group was set up under the leadership of the Director General of the Ministry of Post Telecommunications and Technology, in partnership with the Private Sector cochair  Mr. Farah Elmi from Somtel. 

Over the next 3 months, representatives from leading telcom firms (including Dalkom, Hormuud, Vivacom, Amtel, Golis) all worked together with dedicated officials from the government to finalise the wording of the Act (including Mr. Osman Guled from the State Attorney General’s office, Mr. Yusuf DG of Ministry of Information, Mr. Ahmed from the Office of the Prime Minister, Mr. Moalim from Finance,  Mr. Abdishakur from the Central Bank, and Mr. Hussein from MPTTT).    

Through the Somalia Investment Climate Reform program  (which is funded by the World Bank Multipartner Trust Fund with support from UKAID, Danida, USAID and the EU),  IFC supported the working groups with logistics and facilitation with technical support from the World Bank.  

Two more formal working groups were facilitated by the Somali PPD in April and May, with the planned Working Group meeting replaced by an announcement of the Minister of the draft of the Act on June 21st.      Outside the formal working groups the Private Sector worked together to comment and develop consensus on the draft, drawing in their own legal resources, and in fact producing their own amended draft of the Act. 

The Somali PPD aims to support ICT in Somalia to catalyse additional growth, and to formalize and deepen investments in the sector. Although mobile phone and mobile money usage in Somalia are among the highest in the region, internet use is still among the lowest Africa. Spectrum management and further deployment of fiber-optic infrastructure are examples of crucial actions that will make the internet more accessible and affordable.  The next step is the operationalization of the act, and the establishment of the Authority and regulations.  

The PPD will continue to work on these matters, and use the constructive Public-private collaboration can help to address these matters, and remove bottle necks, keeping the momentum going to build on Somalia’s ICT successes.

Dalmar H Kanyare is currently the Senior Policy​, Planning & Business Climate Reform advisor at the National Ministry of Commerce & Industry.

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