Towards a digital NepalNepal has embarked on an economic revolution to bring progress and prosperity after a successful transformation into a federal republic. Therefore, there is a great need for information communication and technology (ICT).
Nepal has embarked on an economic revolution to bring progress and prosperity after a successful transformation into a federal republic. Therefore, there is a great need for information communication and technology (ICT). ICT plays a significant role in education, health, tourism, employment, finance, agriculture and environmental conservation and promotion. The federal government and the private sector are yet to institutionalise and harness the tremendous benefits including competitive advantage of digital technology in terms of sustainable growth, objectivity and improved governance, and responsive service delivery.
Policymakers and planners need to eliminate information poverty and keep pace with the global digital revolution. Nepal has been grappling with policy planning and management, lack of facts and a strong database, disconnected enterprises, inefficient markets, poor service delivery, disempowerment and corruption. Digital transformation demands involvement of diverse stakeholders to meet specific socio-economic priorities. Historically speaking, the ICT revolution has been ignored in development thinking in Nepal due to poor vision. Only 21 percent of the total population of Nepal has access to the internet.
Digital transformation strategies including an inclusive information society requires substantial investment in organisational capabilities, process innovation and institutional learning. Best practices suggest that every dollar invested in ICT should be matched by a four-dollar investment in process improvement, training and change management. Rapid digitalisation is of critical need for an expeditious and sustainable socio-economic growth in Nepal. This makes the business economy very powerful and competitive.
According to a World Bank report, a 10 percent increase in high speed internet connections result in an economic growth of 13 percent. For Nepali youths migrating abroad in search of better education and job prospects, ICT aids in connecting them with the global networks of opportunities and services. Promoting digital government via better internet connection helps to produce greater transparency and efficiency at work. Also, digitalising rural communities promotes literacy and empowerment. It also helps to maintain good governance in the federal structure by curbing red tapism and ensuring transparency and efficiency at work.
Going for a digital Nepal opens the door to multifaceted opportunities for overall development. How to make the digital dream a reality by improving and expanding the national broadband infrastructure is a must for better connectivity. Going for digitisation as fast as we can is essential. As a report of the World Economic Forum pointed out, a 10 percent increase in the country’s digitisation score will lead to a 0.75 percent growth in its Gross Domestic Product (GDP) per capita. In China’s experience, a 10 percent increase in broadband penetration is associated with a 2.5 percent increase in GDP growth. A study carried out in Nepal shows that the government spends 0.69 paisa to collect taxes and utility bills worth Rs1,000. With the implementation of electronic payment, the government expects to bring it down to 0.3 paisa.
Similarly, e-commerce has been evolving through digitisation due to which Nepal is getting many opportunities in the business sector in terms of ICT related jobs such as computer and information system managers, computer system analysts, computer engineers, computer support specialists, database administrators, computer scientists and computer programmers which are in high demand. Online shopping has increased employment in the logistics sector. Digitalisation is expected to help Nepal correct the trade imbalance too. Trade balance is a major contributor to the GDP as use of the internet as an e-commerce portal and widened connectivity will lead to increased employment and exports. As per the budget for the fiscal year 2018-19, Nepal is aiming at 8 percent growth, up from 5 percent in the previous fiscal year. To this end, it has increased the budget for the ICT sector to Rs5.64 billion for this fiscal year from Rs4.98 billion before. The funds will be used to provide free broadband internet in all schools, which is remarkable.
Digitalising financial services plays a vital role in boosting the economy as it improves financial access. One example is Vodafone’s initiative named M-Pesa that started in 2007 in Kenya and Tanzania, and which was later expanded to Afghanistan, South Africa, Romania and Albania. Because of M-Pesa, 96 percent of the population was able to get financial access through their phones. There was an M-Pesa agent 1.4 km away from every user, which was 9.4 km previously. More than 40 percent of the total GDP is contributed through M-Pesa as per the World Economic Forum. This can be a significant lesson for the banking sector and Nepal’s economy.
Need for synergetic efforts
The 2018 E-Government Development Index places Nepal in the 117th position among 193 countries. Nepal is said to be the first country to bring 3G in the Asian continent. However, it is still at the crawling stage with regard to expansion compared to the rapid progress made by other Asian countries that started late, such as Bangladesh and Sri Lanka. India already has an advanced Long Term Evolution (LTE) network. Nepal is yet to follow this track. Strengthening the national broadband infrastructure should be the primary goal followed by improving infrastructure for connection and LTE coverage in every corner of Nepal. The digital Nepal dream will not be achieved by only bringing policies and programmes. There has to be synergetic efforts by the public and private sectors.
Dixit is pursuing a Master’s degree in Business Administration from the Ace Institute of Management.