Working Group: Attracting Private Sector Investment for Connectivity: Domestic, Regional and Global, Session 1
The group identified three fundamentals necessary for attracting the private sector:
- First, governments that hesitate in embracing the global communication revolution would erode national competitiveness and miss development opportunities. As it was, Africa was already at the margins of the telecommunications revolution even relative to other developing regions.
- Telephone lines per 100 inhabitants were 0.5 in sub-Saharan Africa countries (excluding South Africa) compared with 4.5 in emerging economies and 52.6 in industrialized countries
- Data terminals per 100,00 inhabitants were 0.6 in sub-Saharan countries compared with 6 in emerging economies and 111 in industrialized countries
- Internet hosts per 100,000 inhabitants were 0.1 in sub-Saharan countries compared with 5 in merging countries and 1014 in industrialized countries.
- Massive investment was required in telecommunications alone, for example, investment totaling at least $50 billion would be required to achieve a minimum teledensity of 5 per cent or 5 lines per 100 inhabitants in sub-Saharan Africa. This by far exceeded public sector financing and managerial capacity, making large-scale private investment and operations a necessity.
- Second, governments were urged to recognize that the private sector was a critical player in global communications revolution. If governments continued to monopolize telecommunications and information technology, access to capital, markets and technology and the exploitation of new opportunities and the benefits of competition would be handicapped. An appropriate information technology development strategy for Africa could therefore be based on:
- A public-private partnership based upon greater outsourcing of public sector requirements for information technology services wherever possible to local private entrepreneurs, and
- A foreign-local private sector partnership based upon encouraging and facilitating collaboration and competition between foreign and local private supplies of information technology services.
- Third was the realization by governments that mitigation of actual and perceived risks was critical to attracting private investment. If governments failed to effectively manage the factors that affect these risks, then private investment would be stifled. In Africa, private sector confidence in pro-competitive regulatory frameworks would initially require strong high-level commitment to a simple set of rules ensuring a level playing field and counter-balancing the monopolist mindset of incumbent state telecommunication firms, while technically capable regulatory institutions were built in the medium term.