CASE STUDIES FROM AFRICA

promote more coherent efforts in supporting firms to succeed. Providing for effective public-private
dialogues, as well as intra-industry dialogues, can also be essential for supporting these objectives.
Ensure Supportive Trade, Investment, and Related Policies
Irrespective of the policy instrument used to achieve it (e.g., through autonomous reforms or
negotiated liberalisation, including in the context of regional integration), using trade policies to
secure competitive domestic outcomes in basic and value-added telecommunications services is key
for underpinning competitive and vibrant ITS and BPO sectors. Possible pre-commitments in trade
agreements can also be useful in providing firm signals to existing operators of the intention to
entice additional entrants (if that is the case), thereby allowing the operators some time to adjust
(and potentially moving towards relatively more competitive market outcomes ahead of time).
Of similar importance is ensuring that service providers can competitively access needed hardware
inputs—for example, by reducing import-related taxes on equipment such as computers, servers,
and networking equipment. Where necessary, adjustments to labour laws may also be important, in
particular for ensuring that service providers can send staff abroad to provide services as needed
(which is often a function of offering reciprocal incoming arrangements).
In terms of market destinations for these exports, a number of barriers have tended to persist,
especially among regional trading partners on the continent. In this instance, trade policy can play
an important role through negotiations to secure the reduction of these barriers abroad. This could
be implemented via bilateral, multilateral, or even continental negotiations.
Taking account of potential trade dimensions of key sectoral policies can also play a role in
supporting these sectors. For example, in telecommunications policy, making sure BPO and ITS
providers are able to directly access telecommunications networks through interconnection with
operators, as opposed to retaining access exclusively for operators.
Pursue Proactive Policies to Promote Exports
While notoriously difficult to ‘get right’, targeted proactive policies to promote ITS and BPO exports
have proved essential, both in Senegal and elsewhere.
With respect to investment and tax incentives, the first component is ensuring that ICT and BPO
services are included on the list of sectors eligible for preferential treatment. This should be not only
for large megaprojects, recalling that many of the most innovative services firms are micro and
small enterprises. Preferences may include post-establishment rights to protect investors, as well as
exemptions from corporate and payroll taxes, and other taxes charged against income and/or
imports. In the absence of technology parks or similarly geographically situated infrastructure
facilities, it may also prove useful to avoid requiring physical establishment of premises in any
given geographical location.
Making adequate provision for telecommunications services—including specifically BPO and ICT
services—in development plans and export strategies is also essential for ensuring a whole-ofgovernment
focus in addressing constraints that may impede the flourishing of these sectors.
Similarly, including these sectors in discussions with donors and other development partners—such
as the Action Matrix of the EIF for LDCs—helps to signal that a country is prioritising these sectors,
ensuring that aid can be focused on their specific challenges.
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