The ICT sector still represents a relatively small proportion of the Ivorian economy, with most growth over recent years achieved via the telecoms industry. Mobile services in particular have grown exponentially over the past decade, but areas such as software, hardware, cloud computing and IT service outsourcing remain a comparatively small part of the sector. “Despite advancements in cloud computing, prohibitive internet costs remain an impediment to the development of the sector.” Mohamed Sounkéré, CEO of VEONE/ Cloud4Africa, told OBG. “Encouraging the use of such solutions will help small and medium-sized enterprises compete in local, regional and even international markets.”
Overall, development has been hampered by the same conditions that make it difficult for the IT sector to grow in other countries in the region: inadequate infrastructure, poor training of human resources and high entry costs for users. Another challenge has been the development of lasting IT clusters. However, by aligning development with some of the country’s more important economic strengths – such as its diversified agricultural industry – both public and private sector players are hoping to expand existing technological capabilities. An ongoing project to establish country-wide backbone infrastructure, as well as progressive steps to improve the legislative environment will also determine the industry’s long-term success.
Sector Structure
In its entirety the ICT sector is estimated to account for roughly 8% of the country’s GDP, according to government estimates. However, this figure was dominated by telecommunication. “There were figures from 2012 pointing to the IT part of the market to be around 0.25% of the country’s GDP,” Patrick M’Bengue, president of the Group of ICT Sector Operators, told OBG. However, he added that by his organisation’s estimates the sector will account for 2.5% of Côte d’Ivoire’s GDP by 2025. “It is a credible goal, and the measures currently being implemented are positive steps towards it,” he said. While accumulating up-to-date figures about the segment remains a key challenge for policymakers, stakeholders are taking steps to establish an observatory for the IT sector to facilitate long term decision making and planning.
Growing Economy
Since returning to relative political stability in 2011, Côte d’Ivoire has experienced consecutive years of robust economic growth. GDP in 2017 reached an estimate CFA18.5trn ($27.8bn), representing growth of 7.6%, according to the IMF. While the continuation of this positive trend provides opportunities for job creation and entrepreneurship, a better-developed IT sector, integration of modern innovations into more industries and education in these areas is needed to take full advantage. Serges Kouakou, director of Orange Business, told OBG, “As was the case with mobile services, African countries – including Côte d’Ivoire – must look at the advent of new technologies as an opportunity to leapfrog over investment in capital intensive means of production and move into the fast-lane of the digital revolution. However, this will necessitate investment in education to prepare the youth for the jobs of tomorrow.”
Supporting Framework
Work on industry policy began to take shape right after the end of the civil war, and the country first established a plan for its IT sector in 2011, which was revised in 2013 and 2015. In tandem with the government’s development goals outlined in the National Development Plan 2016-20, the government has strengthened regulatory capacity in the IT sector and built a legal framework to support its goals in the sector. In 2012 Côte d’Ivoire launched the National Agency for the Universal Service of Telecommunications (Agence Nationale du Service Universel des Télécommunications, ANSUT). The agency is managed under the Ministry of Communication, Digital Economy and Post (Ministère de la Communication, de L’Economie Numerique, et de la Poste, MCENP) and has been charged with overseeing the country’s digitalisation measures and regulating industry players.
Sector regulation has striven to align governmental goals of increasing IT usage with the establishment of an overarching framework for the private sector to operate in. In mid-2013 the National Assembly passed laws to regulate e-commerce and electronic transactions, as well as to authorise the use of electronic signatures to streamline operation of online businesses and speed bureaucratic processes.
Providing Access
In line with a more complete regulatory environment, changing IT usage patterns will also rely on making hardware accessible. In early-2015 the MCENP launched the “Un Citoyen, Un Ordinateur + Une Connexion Internet” or the “One Citizen, One Computer, One Connection” programme, aimed at helping 500,000 families acquire portable computers or tablets, as well as 3G connections, over a five-year period. The initiative also helps provide financing for computers priced of up to CFA120,000 (€180) in price, with beneficiaries able to repay their loans via mobile money payments over a maximum period of six months. ANSUT reported a similar programme, launched in September 2015, had successfully provided affordable IT equipment to 7615 students.
In addition, authorities are working to expand access to hardware and reliable online connections to locations outside of major urban areas by developing a network of cyber access centres in rural locations across the country. The programme targets villages with over 500 inhabitants, with the goal of supporting the development of the education, health and agriculture sectors. Launched in 2016, the project is currently in its testing phase, with twelve cyber centres set up in communities such as Gagnoa, Kouto, Ferkessédougou, Daloa and Man. The pilot locations are helping authorities estimate costs: “Lack of infrastructure is a big challenge. We want to establish about 5000 cyber access centres across villages. Through the pilot programmes, we realised that this is very expensive, so now we are aiming to do it through private-public partnerships,” Georges M’Bra, deputy director at the National Bureau of Technical and Development Studies, told OBG.
Laying Lines
Perhaps the most significant project for the sector will be the establishment of a country-wide fibre-optic network. Launched in 2012, the National Broadband Project aims to install roughly 7000 km of fibre optics throughout the country. The initiative, budgeted at roughly CFA106.8bn (€160.2m), is being executed in three separate phases. In the east a 622-km stretch connecting Grand Bassam to Bouna was finalised in 2015, while 1400 km linking the southern city of San Pedro to the northern town of Ferkessé dougou was expected to be concluded before the end of 2017. A third and larger section, totalling around 5000 km in length, will link the country’s central areas and is scheduled to be finished in 2018. No updates have been announced regarding progress or completion of these latter two projects as of early 2018.
Financing Development
To finance the One Citizen, One Computer, One connection programme, the roll-out of the fibre-optic network and improve rural connectivity, CFA100bn (€150m) was approved in mid-2015 by a group of lenders comprising French bank PNB Paribas, Société General, Bank of Africa and Ecobank.
In July 2016 additional measures were taken when a financial support programme to provide funds to improve infrastructure and support IT firms and startups was announced. The Ivorian Innovation Fund, in partnership with the African Development Bank, set aside €200m for this cause, highlighting he government’s additional focus on creating a positive environment for new start-ups to emerge.
Vitib
In 2006 the Village of Information Technology and Biotechnology (Village des Technologies de l’ Information et de la Biotechnologie, VITIB) was established in Gran Bassam. Sited on 624-ha, only 30-ha are currently under operation, with an additional 180-ha to be opened by March 2018. The free-trade zone was first financed through a Banque Ouest Africaine de Développement loan for CFA131bn (€12.1bn), an Islamic Development Bank loan for CFA5bn (€463m) and a CFA10bn (€926m) loan from the government of India through its Export-Import Bank. VITIB’s shareholder structure is comprised of the state of Côte d’Ivoire at 8%, with the remainder consisting of various state corporations and other private investors from Côte d’Ivoire and India.
While companies initially established in the zone operate within the ICT sector, VITIB has recently opened its doors to companies in the biotechnology and pharmaceuticals sectors as well, such as Pharmanova, Strides Pharma and SAIPH. “The master plan for the development of the technological park has been finalised, which will include living units, hotels, restaurants, recreational facilities and other amenities. We seek to do this in collaboration with the private sector,“ Philippe Pango, director-general of VITIB, told OBG.
In preparation for future collaborations, February 2017 saw VITIB establish the Bureau de Contrôle et de Coordination Administrative, or the Office of Control and Administrative Coordination to operate as a one-stop shop for the facilitation of administrative procedures for the zone operators.
E-Commerce
The strengthening of the regulatory environment has gone in hand with the expansion of e-commerce activities in the country, however, obstacles still persist. “The government’s move to lower the VAT on the import of electronics from 44% to 7% has had positive impacts on sales,” René Yédiéti, CEO of Librairie de France, told OBG.
“However, the high cost of internet access and the resultant low penetration still limit access to e-commerce channels.” Furthermore, banking restrictions have sometimes prevented Ivorian customers from making credit card acquisitions on international websites, though this has opened the door for retailers with a local footing. Pan-African online retailer Jumia offers a wide product range, including accessories, electronics, clothes and appliances, and boasts over 400,000 products and 2m unique site visits a month. Other players in the segment in the country include regional-retailer CFAO and Hellofood.
Building Trust
In order for online transactions to grow in the sector, firms have had to work hard to overcome problems with perception. “Given Côte d’ Ivoire’s history of cybersecurity problems and fraud, the prevailing mentality was that everything on the internet is a fraud. Today we are no longer in this situation,” Françis Dufay, director general at Jumia Côte d’Ivoire, told OBG. Previously, distrust led to a lot of e-commerce occurring via cash on delivery. However, the use of mobile money, with its increasingly strong presence, can be a likely substitute over the medium-term.
Much has been done in the way of new regulations, to build strength in the e-commerce market. In 2012, the Ivorian government created the Platform for Fighting Cybercrime, which has a dedicated taskforce to prosecute digital illegal behaviour. A year later the government passed a law to strengthen punitive measures against cybercriminals, which can now be sanctioned with jail sentence of up to 20 years and fines ranging from CFA500,000 (€750) and CFA1m (€1,500), according to local media reports.
Digital Governance
Efforts to expand the country’s IT industry are being undertaken in parallel with the redesign and modernisation of government systems. Room for improvement in the latter was revealed in the latest UN E-Government Survey, which was published in 2016. In the report, which is published every two years, Côte d’Ivoire ranked 175th out of 193 countries for its digital government policies. This also represented a drop on its position in the 2014 iteration, when the nation was classified 171st.
One of the most significant obstacles to improvement has been delays in the training of public servants. “The goal is to train 36,000 government employees to better prepare them for the use of IT tools”, M’Bra told OBG. However, according to M’Bra, as of September 2017, only about 10,000 governmental workers had been trained. Implementation efforts are also expected to pick up once the fibre-optic network is completed towards the end of 2017, which will link government buildings across the country’s cities.
The e-government programme is based on several developmental ambitions, with a strong emphasis on improving the ways that the country’s administration is structured and facilitating smoother interactions between the state, citizens and firms.
“We have been working towards the dematerialisation of procedures and digitalisation of public sector archives since Côte d’Ivoire became independent in 1960,” Nongolougo Soro, director-general of Société Nationale de Développement Informatique, told OBG. “In parallel, projects concerning the digitalisation of government services and various other procedures are ongoing, with the aim of lowering paper usage, increasing transparency and boosting efficiency across all government departments.”
Training
As sustained economic growth and modernisation continues to open up new opportunities for the IT industry, the attention of the private and public sectors has turned towards improving human resources. To this end, since its inception in 2012, the African University for Information Technology and Communications in Abidjan has been expanding its reach as a training facility for the country’s IT students. The public university, which offers undergraduate and master’s-level programmes in several sector-related areas, started receiving students in 2012. Furthermore, the facility received a $1m investment from Chinese technology firm Huawei for the development of a training centre focused on mobile networks.
“The university is working quite well, with the first students graduating,” M’Bengue told OBG. “But at the moment it is only training about 25 people per year. Our economy needs to be training about 10,000 to 20,000 coders per year.”
The university is also developing programmes for other affiliated subjects such as an e-health master’s degrees, which was launched in 2017 and was designed in a coordinated effort between the Association of Private Clinics of Côte d’Ivoire, the Ministry of Health, and the Ministry of Digital Economy. “The goal is to select doctors and train them in e-health services. This could be an important advantage and help take diagnosis and care capabilities to the most remote areas of the country,” M’Bengue told OBG.
Outlook
Digitalisation of processes will be essential for Côte d’Ivoire’s economy to become more stable and competitive. By investing in infrastructure and programmes that improve access to technologies, the authorities have already lowered the cost of entry for the country’s lower-income segments.
However, these facilities will need to be backed by robust support, making IT literacy and training a leading priority moving forward.
“The government is putting in place the regulatory environment and providing incentives to attract private participation,” Kouakou, of Orange Business, told OBG. “Private operators should now come along with the right expertise and competencies to deploy and integrate technological solutions across the economy.”
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