To promote digital and financial inclusion, government needs to reduce import duty on mobile phones to make them affordable for more Ghanaians, Dickson Oduro-Nyaning, former CEO of Ghana Telecom now Vodafone Ghana, has said.
If not checked, the relatively high cost of mobile phones resulting from high import duties could derail efforts at increasing digital and financial inclusion, he warned.
“One of the major problems facing Ghanaians is the cost of handsets; it is quite expensive to get a quality smartphone. To the average Ghanaian, it is not easy to come by, so people are forced to buy second hand phones or inferior ones, which is not the best.
Some of these people, when the phone is not functioning well, put the blame on the service operator, but the problem, sometimes, comes from the phone,” he told the B&FT in Accra.
Mr. Oduro-Nyaning, who oversaw the transition of Ghana Telecom to Vodafone, after government sold a 70 percent stake to the latter, explained that a friendly import tax on mobile phones will also promote e-commerce and mobile-related innovations in the country.
Currently, mobile phone importers pay 20 percent as import duty, compared to other countries in the region where importers pay less.
There are those who believe there should be a zero or a less-burdensome tax on imported phones, especially smartphones, to reduce smuggling and help in the growth of the communications sector, especially e-commerce.
When it comes to mobile phone penetration in the country, industry figures estimate it at over 128 percent, with the number of mobile device users expected to reach 40 million by 2020, according to Jumia’s Annual Mobile report.
However, most experts believe that a good percentage of the mobile devices in use in the country are either of low quality, or have outlived their usefulness.
But given the power of phone as a communication and information access channel, Mr. Oduro-Nyanning explained that making it accessible would also help improve access to information, education and knowledge sharing, thus contributing to an informed citizenry.
Cost of 4G spectrum
“The other problem facing the industry has to do with the cost of the 4G spectrum. It is quite expensive. The government has said it is looking into it. So, if the prices go down, I think it will make the services affordable to citizens.
Asked what he thinks will be drivers of growth of Ghana’s telco sector going forward, Mr. Oduro-Nyaning singled out data as being key.
“Data penetration now is not adequate; it is only in the big cities; it is not available in most rural areas,” he added.
On whether the cost of the 4G spectrum is a contributory factor to the low data penetration in the country, Mr. Oduro-Nyaning said it is part, but not totally.
He therefore urged operators to extend their infrastructure to rural areas in order to help rural residents have access to digital content.
This, he further indicated, will help improve digital and financial inclusion, which he described as very key to the development of the industry and the country at large.