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TCT's and European development assistance

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Saturday, 08 October 2005

TCT's and European development assistance

The EU is the world’s largest donor. EU overseas development funding has been increasing since 2000 and in May 2005 the EU made a commitment to double its aid budget by 2010. An increasing proportion of aid goes to developing country governments directly to support their own development plans and budgets. They choose how much to allocate to ICT. Priorities are set locally and EU donors respond to these priorities.

How ICT contributes to development
ICT (new and old technologies – telephones and broadcasting as well as the internet) are an important element of development in many areas such as education, health, economic growth and governance. Most countries seek support for ICT as an integral part of development plans in these areas, while fewer seek support specifically for ICT. Most EU members support this approach, and ICT forms a significant part of many EU funded projects. ICT needs infrastructure, and the EU supports this as part of the new Infrastructure Partnership with Africa due to start this autumn. But hardware alone does not make an effective information system, and many other factors also receive increasing support – such as training, policy and planning, development of applications and content, and improvement of environmental conditions such as energy and education.

The private sector
ICT infrastructure has largely been funded by the private sector, since the 1990s. The private sector has proved itself more efficient than governments in telecommunications service provision: private providers are more flexible and able to keep up with technological change, and competition keeps costs and prices lower. One role of governments, with donor support, is therefore to attract private investment. This sometimes requires financial support such as low-interest loans or risk guarantees; and always requires creation of the right conditions of regulation, competition, and start-up costs.

Creating an enabling environment for investment
It is not enough for governments and aid donors simply to say “Leave it to the private sector”. Areas in which government action is still needed, often with donor support, include: creating an enabling legal and regulatory environment to attract investors; ensuring that the communication needs of the poorest and most marginalised people are met, often through innovative public-private partnerships; and introducing ICT into government functions and services. Donors also play a role in encouraging private operators to enter risky or less profitable areas, by supplying financial assistance and risk mitigation; and in international collaborations, for instance to build ‘backbone’ infrastructure linking countries and regions across Africa.