Information and

communications technology
(ICT)
Key technologies for sustainable development

BMZ Strategy Paper 2 | 2013 e

 Dirk Niebel, MdB
Federal Minister for Economic Cooperation and Development

Gudrun Kopp, MdB

Parliamentary State Secretary to the Federal Minister for Economic Cooperation and Development

Hans-Jürgen Beerfeltz
State Secretary of the Federal Ministry for Economic Cooperation and Development
3 BMZ STRATEGY PAPER 2/2013e

Contents

Overview and summary 4

1. Status and relevance of information and communications technology (ICT)

in development policy 6

2. Leveraging the potential of ICT for development 9

2.1 ICT diffusion boosts economic growth 9
2.2 ICT plays a role in political participation and democratisation processes 10
2.3 ICT helps achieve socioeconomic and environmental development goals 11
Management information systems 11
E-Learning 12
Using the internet and digital knowledge resources 12
Mobile telecommunications 13
2.4 ICT applications increase the effectiveness of development cooperation 13

3. ICT for development – challenges 15

4. ICT in German development cooperation 16

4.1 International obligations 16
4.2 Strategic approach of German development cooperation in the field of ICT 17
4.2.1 Priority areas and principles 17
4.2.2 Strategic fields of action 18
An enabling environment for ICT 18
ICT sector development 20
Financing ICT infrastructure 20
IT sector development 21
> Strategy development 21
> Support for IT clusters and industry associations 21
> Capacity development for local IT companies 21
> Domestic market development 22
> Export promotion 23
Use of ICTs in German development cooperation’s projects and programmes 24
ICT and promoting good governance 24
ICT and rural development 24
Cooperation with the private sector in the ICT sector 25

Case Studies 26

Bibliography 29
4 BMZ STRATEGY PAPER 2/2013e
Overview and summary
German development cooperation advocates the dis-
semination and use of information and communica-
tions technology (ICT) in partner countries, in order
to leverage its potential to drive sustainable develop-
ment and bridge the digital divide. Modern ICT is a
key instrument in many projects and programmes
implemented across the many different sectors sup-
ported by German development cooperation.
This strategy paper lays down guidelines for sup-
porting the dissemination and use of ICT in partner
countries and for its effective use in the different
sectors addressed by German development coopera-
tion. It provides a reference framework for German
development organisations and serves as a basis
for dialogue with partner governments, non-gov-
ernmental organisations, the private sector as well
as other donors and international organisations. In
particular, the paper contributes to the following
objectives:
> Deploying ICT in projects and programmes:
ICT is playing an increasingly important role in
modern society, among other things as an instru-
ment in development cooperation and in driving
innovation and efficiency in many areas. For this
reason, it is used in a wide range of projects and pro-
grammes supported by German development coop-
eration. This strategy paper outlines key guidelines
for and approaches to courses of action, in order to
shape ICT activities systematically and efficiently,
and increase the extent to which it is used in other
measures.
> Supporting Germany’s contribution to ‘ICT
for development’:
Germany is one of the few donors currently actively
involved in ICT at the level of international coop-
eration. This paper outlines the approach pursued
by German development cooperation in a clear and
transparent manner and helps raise the international
profile of the German Government’s commitment
in this field. Within Germany too, public interest in
Germany’s work in ICT for development has grown.
This paper aims to provide information to the
general public and improve cooperation and infor-
mation sharing with institutions in the public and
private sector.
> Collaborating with German development
cooperation’s partners:
In many partner countries of German development
cooperation, ICT is regarded as a key subarea of the
economy (e.g. support to the IT sector) and of society
(use of modern technologies in all societal, private
and political domains). In this context, this strategy
paper can identify areas for collaborating with
partners of German development cooperation and
provide suggestions for meaningful measures (for
example, by describing several case studies).
The following basic principles form the basis of
German development cooperation’s contribution to
the field of ICT:
— liberalisation and regulation of tele-
communications markets
— compensation for market failure
— promotion of private-sector involvement
— demand-oriented deployment of ICT
— strengthening of local capacity
5 BMZ STRATEGY PAPER 2/2013e
— promotion of knowledge sharing and the
transfer of ICT know-how
— deployment of ICT across sectors to enhance
effectiveness and efficiency
— promotion of the local IT sector through the
deployment of ICT in projects
— coordination with measures implemented
by other donors
— consideration of aspects such as the local
context, interoperability, and the sustainability
of measures
Besides creating enabling frameworks for accessing
and using ICT, e.g. by promoting telecommunications
regulation in partner countries, the strategic fields
of action for ICT measures of German development
cooperation include: a comprehensive approach for
promoting local ICT sectors (among other things by
funding ICT infrastructure and IT sector develop-
ment in combination with strategic development,
promoting clusters, training and continuing train-
ing programmes for IT entrepreneurs, developing
domestic markets, and promoting exports) as well as
mainstreaming ICT into different areas of German
development cooperation, such as the promotion of
good governance and rural development.
This strategy paper contains a collection of case
studies from different areas of German development
cooperation. These examples demonstrate the degree
to which Germany is involved in the area of ICT for
development (ICT4D) and provide suggestions for
potential areas where there are opportunities for its
further deployment.
6 BMZ STRATEGY PAPER 2/2013e
1. Status and relevance of information
and communications technology (ICT)
in development policy
The rapid development and increasing global distri-
bution of modern information and communications
technologies such as PCs, the internet, email and
mobile phones have transformed the way economies
operate and the way individuals, societies and states
interact with each other. ICT is an essential instru-
ment when it comes to reducing poverty, driving
social and economic development and supporting
democracy and good governance, education and
health care. It enables better access to knowledge for
sustainable development and opens up new ways of
involving large swathes of the population in political
decision-making processes.
Information and communications technology
Information and communications technology (ICT)
encompasses all technical equipment and facilities
that convert, process, save and transfer various types
of information in digital form. It includes voice
telephony, data communications and computer,
radio, television and similar technologies. Copper
wires, fibre optics and a variety of wireless technolo-
gies can be used for communications and for the
exchange of data in this context.
There are any number of examples of how ICT can
help support sustainable development in partner
countries of German development cooperation. For
example, mobile phones open up access for farmers
and entrepreneurs to new sales and procurement
markets. Fast, comprehensive word processing pack-
ages can help considerably improve the availability
and quality of services provided by state institu-
tions and boost the productivity of companies. The
internet allows schools and hospitals, for example,
to access extensive data and a wide array of infor-
mation. In addition to solely web-based media, an
increasing number of traditional print media are
now also available online, and can be accessed via
the internet and mobile devices. This expands reach
particularly to population groups living in remote
areas that previously only had limited access to
information or could not actively engage in political
processes.
The conditions for using ICT in developing countries
have improved considerably over the last ten years.
The price of hardware, network infrastructure and
handheld devices has dropped significantly. Software
that corresponds to the specific needs of develop-
ing countries, and builds on free and open-source
licenses, is becoming increasingly available.
Mobile phone technology in particular has brought
about lasting change and has transformed ICT in
developing countries into a highly dynamic sector.
For example, the mobile phone penetration rate in
developing countries had reached 70.1 per cent in
2010.1 Needs-oriented, innovative business models
and technological solutions such as mobile financial
services are increasingly being developed to meet
growing demand among low-income users. 2 Also,
in developing countries in particular, it has been
observed that internet content is increasingly being
accessed on mobile phones. Although the rate of
technological progress has been rapid and developing
countries have been able to catch up in the area of
mobile technology in particular, the distribution and
use of ICT remains very unequal, and there is still a
‘digital divide’ at the global level.
1
International Telecommunication Union (2011): Measuring the
Information Society 2011. Geneva, p. 2.
2
UNCTAD (2010): Information Economy Report 2010, p. 7. BMZ/GIZ
(2011): The Transformative Role of Mobile Financial Services and the
Role of German Development Cooperation. Eschborn, 2011. Porteous,
D and N. Wishart (2006): m-Banking: A Knowledge Map. infoDev/
World Bank. Hughes, N. and S. Lonie (2007): M-PESA: Mobile Money
for the Unbanked. In: Innovations, Winter/Spring 2007, Vol. 2, No.
1 – 2 p. 63 – 81 Services such as the ngpay’s ‘mobile mall’ in India offer
access to a wide range of commercial products and services in any
number of sectors from standard mobile devices.
7 BMZ STRATEGY PAPER 2/2013e
Developing countries – particularly those in sub-
Saharan Africa – a long way behind industrial-
ised countries, despite the fact that ICT penetration
rates are on the rise. Although the success of mobile
phones has reduced the digital divide in terms of
voice communications, in 2009 there were only 25
mobile phone contracts per 100 inhabitants in least
developed countries, compared with 118.1 per 100
inhabitants in Germany. The gap is even wider when
it comes to internet connections. Whereas in 2010,
71 per cent of the population in industrialised coun-
tries used the internet according to the ITU, this fig-
ure was just 9.6 per cent in Africa. There is a serious
imbalance in terms of the affordability and availabil-
ity of high-speed broadband internet connections.3
In 2010, the broadband penetration rate (connections
per 100 inhabitants) in industrialised countries was
45 per cent, in contrast to less than 1 per cent in
Africa. Whereas in Germany, a broadband internet
connection cost about US-Dollar 40 or 1.1 per cent of
the monthly per capita income in 2010,4 in Malawi,
Ethiopia, Zimbabwe and Guinea it cost more than
ten times the average monthly per capita income to
access the internet.5 Broadband internet connections
are increasingly becoming the norm in industrialised
countries, and are therefore a prerequisite for access-
ing up-to-date applications and content on the web.
This new ‘broadband divide’ therefore increasingly
undermines development in partner countries.
In addition to the digital divide between developing
and industrialised countries, there is also a digital
divide between urban centres and rural areas within
developing countries. The provision of telecommuni-
3
The ITU defines broadband as internet speeds of 256 kbit/s or higher.
In 2007, the landline broadband penetration rate in Europe was 14
per cent, compared with 0.2 per cent in Africa. ITU (2009): The ICT
Development Index, p. 4.
4
ITU (2011): Measuring the Information Society 2011, p. 72.
5
Cf. ITU (2011): Measuring the Information Society 2011, p. 71.
cations infrastructure and associated services (such
as broadband internet connections) is usually more
profitable in towns and cities than in the country-
side. More cost-intensive and less financially attrac-
tive rural regions often lag behind and have no or
inadequate access to telecommunications infrastruc-
ture. The situation is even more dramatic as regards
the internet.
However, a lack of telecommunications infrastruc-
ture and exorbitant prices are not the only factors
that impact on the effective use of ICT. Among poor
population groups in particular, there is a serious
lack of the knowledge and expertise (literacy level,
language skills and specific ICT know-how) required
to maximise the potential of ICT. The growing com-
plexity of ICT applications increasingly exacerbates
this situation.
The ‘digital divide’ described above widens the gap in
knowledge and education that already exists between
developing and developed countries. This in turn
often results in a learning and innovation divide.
Access to knowledge and the capability of leveraging
this knowledge to develop innovative products, proc-
esses and services is increasingly becoming a key pre-
requisite for sustainable development. As a result of
insufficient access to modern ICT along with the lack
of expertise required to use it, a large number of peo-
ple in developing countries cannot participate in glo-
bal economic processes and in the knowledge society.
This means that developing countries are increas-
ingly trapped in a vicious circle. Inadequate access to
modern ICT and a lack of expertise in its effective use
mean that they cannot access knowledge and learn-
ing resources that are increasingly being provided
via modern ICT, particularly the internet, and that
enable people to acquire the required know-how in
the first place.
8 BMZ STRATEGY PAPER 2/2013e
German development cooperation recognises the
potential that ICT holds for development and is
aware of the digital divide that still exists. It sees ICT
as an area that can give people the ability to move
out of material hardship and to determine and take
on responsibility for their own lives. In this way, the
German Government’s development policy aims to
help leverage the opportunities created by globalisa-
tion for all.
9 BMZ STRATEGY PAPER 2/2013e

2. Leveraging the potential of ICT

for development

Modern ICT has drastically reduced the cost of Growth Effect of ICT in percentage points
communicating and interacting, and of obtaining,
processing and storing information. As a result, ICT 1.5
can play a major role in increasing the efficiency,
1.38
effectiveness and transparency of measures and proc- 1.21
1.0 1.12
ess flows. ICT also opens up new opportunities for
large sections of the population to participate at the 0.81 0.77
0.73
political, cultural and societal level. 0.5 0.60
0.43

Against the backdrop of the shift towards a globalised 0.0

and knowledge-based world economy, the use of fixed mobile Internet broadband
ICT has played a progressively more important role
in implementing development strategies to achieve Source: Qiang 2009, high-income-economies
development goals. Many of our partner countries also Worldbank
low- and middle-income-economies
acknowledge that ICT is key to their development and
have already devised strategies to support affordable Note: The y axis represents the percentage-point increase in
access to these technologies and their effective use.6 economic growth per 10-percentage-point increase in telecom-
munications penetration. All results are statistically significant
at the one per cent level except for the figures for broadband
in developing countries, which are significant at the 10-per
cent level.
2.1 ICT diffusion boosts economic growth

A study conducted by the World Bank7 shows that
increasing the diffusion and use of ICT significantly
boosts productivity and economic growth. The study
found that in low and medium-income countries, in-
creasing internet penetration by 10 percentage points
will boost economic growth by about 1.12 percentage
points.
The economic growth that can be generated by ICT is
due to a number of factors. For example, technologies
such as telecommunications, the internet and email
significantly reduce the cost of communications, and
stimulate lively exchange and interaction between
individual actors. This improves the flow of informa-
tion across economic sectors – from agriculture to
6
The majority of poverty reduction strategy papers in developing
countries emphasise the importance of using ICT to help achieve
development goals.
7
World Bank (2009): Information and Communications for
Development 2009 – Extending Reach and Increasing Impact.
production and service industries. ICT also stream-
lines processes and transactions. What is more, it
enables companies to tap into new procurement and
consumption markets.8
ICT also plays a key role in boosting the innovative
capacity of economies that are becoming increas-
ingly knowledge-based. Access to knowledge, the use
of new technologies and the faster processing of data
play a role here.
8
This has been proven by econometric studies such as: Röller, L.- H.
and L. Waverman (2001): Telecommunications Infrastructure and
Economic Development: A Simultaneous Approach. In: American
Economic Review 91 (4), 2001, 909 – 923. Sridhar, K.S. and V. Sridhar
(2007): Telecommunications Infrastructure and Economic Growth:
Evidence from Developing Countries. In: Applied Econometrics and
International Development, Vol. 7 – 2, 2007, 37 – 61. Torero, M., K. C.
Shyamal and S. B. Arjun (2006): Telecommunications Infrastructure
and Economic Growth: A Cross-Country Analysis. In: M. Torero and
J. von Braun (2006): Information and Communication Technologies
for Development and Poverty Reduction, Washington D. C., Johns
Hopkins University Press, 2006.
10 BMZ STRATEGY PAPER 2/2013e
The main prerequisites for sustainable economic
development are accessing knowledge and trans-
forming this knowledge into innovative products,
processes and services. Information and communica-
tions technologies, particularly the internet, can play
an important role in this context. In addition to the
aspect of the availability of knowledge, ICT, like elec-
tricity, is considered to be a general purpose technol-
ogy that permeates all sectors of the economy. This
means that the very use of ICT offers great potential
for advancing technology, increasing productivity
and reducing costs as well as stimulating product and
process innovation. Another aspect is the ease with
which data can be processed and distributed. As ICT
allows large quantities of data to be quickly analysed
and communicated over long distances, it can help
forge new partnerships and create new information
flows which in turn can lead to the development of
new product variants and innovative organisational
structures and workflows.
ICT can also open up new opportunities for certain
population groups that were previously excluded
from economic activity (for example, because of their
gender, income, a disability or their remote location).
2.2 ICT pLayS a rOLE IN pOLITICaL
parTICIpaTION aND
DEMOCraTISaTION prOCESSES
Democracy is a form of government that affords all
citizens political and civil freedom and the right to
political participation. A parliamentary democracy
is based on the principle of civil society being able to
gather information, articulate its needs, and actively
participate in the formation of political opinion and
political decision-making processes at all levels. The
media is part of a system of checks and balances and
plays a paramount role in this context. Freedom of
the press opens up access to information, fosters
­
Information and communications technologies,
in particular the internet, enable large swathes of
the population to access vast global knowledge and
information resources. Mobile communications,
internet portals, multimedia and online journal-
ism (online versions of traditional print media as
well as e-zines and blogs) offer new opportunities
for exchanging information, and therefore promote
the freedom of opinion and expression. 9 ICT-ena-
bled media open up scope for a free and pluralistic
media landscape, which can promote freedom of
the press. ’Social media’ (interactive, ICT-enabled
networks such as blogs, Facebook or Twitter) have
demonstrated in recent years that information and
communication technologies can play a vital role in
democratisation processes and societal change.
ICT can enhance the overall transparency of politi-
cal processes and play an active role in enabling the
population to demand greater accountability from
state institutions10 – even where there is censorship
and repression.
Civil society organisations (CSOs), as active media-
tors that represent society’s interests, are also par-
ticularly reliant on well-functioning information
and communications channels. An actively involved
and well-organised civil society must be informed
about political decisions, involved in decision-mak-
ing processes and be able to carry out critical control
functions. Modern ICT is therefore crucial to CSOs
achieving their objectives and offers vast potential
for a variety of different uses. It can enhance internal
9
UNESCO (2005): Towards knowledge societies. UNESCO World
Report, p. 36ff.
10
OECD-DAC-GOVNET (2011): Draft Discussion Paper International
Support to Media Development: Context, Evidence, Challenges and
Possible Strategic Principles. P. 4 point 14, Paris.
11 BMZ STRATEGY PAPER 2/2013e
CSO structures and improve their internal and exter-
nal communications.11
What is more, ICT also has the potential to promote
political participation particularly among popula-
tion groups (such as women, people with disabilities
and the poor) that have been excluded from politi-
cal processes in the past. For example, mobile phone
technologies – particularly when used together with
increasingly popular online media – allow access to
information in rural areas that previously could not be
reached by traditional media. At the same time, they
also enable population groups living in these areas to
‘find their voice’ at the national and even international
level. This means that ICT can play a key role in em-
powering the rural population who were previously
excluded from participating in the information society.
2.3 ICT HELpS aCHIEvE SOCIOECONOMIC
aND ENvIrONMENTaL DEvELOpMENT
GOaLS
ICT is an essential component of fundamental reform
and development programmes in the area of poverty
reduction. It is also vitally important for achieving so-
cioeconomic and environmental development goals in
least developed countries as well, for two main reasons:
1. ICT has significantly reduced the cost of access-
ing, exchanging and circulating information and
thereby plays a key role in communication and in-
teraction. It allows knowledge and information to be
exchanged efficiently and effectively, irrespective of
the distances involved.
11
Czornohus S., C. Friedland, S. Haffner, H. Ihne and W. Kandie (2006):
Die Bedeutung von IKT für zivilgesellschaftliches Engagement am
Beispiel von Nichtregierungsorganisationen (NRO) in Subsahara
Afrika. (The importance of ICT for civil society engagement, taking
NGOs in sub-Saharan Africa as an example). Study conducted on
behalf of the German Bundestag.
2. ICT is an efficient tool for collecting, processing
and storing information. ICT-generated, reliable data
are crucial for monitoring and evaluating the results
of political and development programmes. It also has
a key role to play in optimising management processes
in the public and private sector.
This means that in addition to providing knowledge
and information, which improves people’s standard
of living (for example by opening up access to and
participation in value-added processes or by tapping
into new ICT business areas), the different technolo-
gies can be used in a number of ways to help reduce
poverty and promote socioeconomic and environ-
mentally sustainable development. The outcome
document of the Rio+20 summit also refers to the
importance of ICT for sustainable development.
It specifically notes the role it plays in exchanging
knowledge within the context of technical coopera-
tion and capacity development. Special fields of ap-
plication highlighted in the document include rural
development, education, and improving the flow of
information between government and civil society.12
ICT applications can be broken down into three
main categories: management information systems,
e-learning applications and telecommunications
services (mainly the internet and mobile communi-
cation services), as described in greater detail below.
MaNaGEMENT INfOrMaTION SySTEMS
A management information system is a software or
database application that systematically processes
data. It can also be used to exchange and call up data.
Management information systems facilitate process
management and enable the fast and comprehensive
exchange of information within organisations and
12
Rio+20 (2012): The Future We Want: Rio+20 Outcome Document.
12 BMZ STRATEGY PAPER 2/2013e
between organisations and individuals. They can
therefore contribute in a variety of ways to achieving
development goals in different sectors. In these sys-
tems, ICT is used to collect and analyse data required
to understand and respond appropriately to new and
complex challenges in areas such as climate change
and increasing environmental degradation. Manage-
ment information systems provide data and analyses
that pave the way for managing scarce natural re-
sources such as rivers, lakes, forests and fish stocks
more effectively.
Moreover, they can also be used as an efficient
and effective tool in the area of good governance.
e-government applications provide citizens with
additional or improved services and information,
for example regarding the source and use of public
funds.
Health care and education are other sectors where
management information systems and software
applications already play an important role, and
will play an even greater role in future. Here, the
systems help significantly improve the delivery of
public services by providing the basis for using scarce
resources more efficiently, streamlining administra-
tive processes and improving the management of
public institutions such as hospitals and universities.
E-LEarNING
ICT opens up new avenues for learning and provides
valuable instruments for exchanging and manag-
ing knowledge. ICT-supported distance learning
approaches create new opportunities for further edu-
cation and training, in the form of fully ICT-based
applications (e-learning) and blended learning for-
mats (combination of distance and classroom learn-
ing). The main advantage of using ICT in this context
is that learning content can, for the most part, be
made available at any time and in any place. ICT can
play a significant role in improving basic education of
girls and boys, vocational training and higher educa-
tion. ICT-based distance learning university courses
reduce the cost of education and improve access to
lifelong learning. The use of e-learning instruments
is not by any means restricted solely to the education
sector. They can also be used to efficiently transfer
knowledge in other areas, for example to train medi-
cal professionals.
USING THE INTErNET aND DIGITaL KNOwLEDGE
rESOUrCES
Modern information and communication technolo-
gies, particularly the internet, are an efficient and
effective means of increasing transparency in inter-
action between government and the private sector.
They give citizens an effective means of holding
public representatives accountable for their actions.
Moreover, ICT also opens up new avenues for part-
ner countries in their fight to identify, reduce and
prevent corruption and mismanagement. In other
words, it is an important tool in systematically im-
plementing good governance.
The internet is increasingly becoming a key medium
for accessing knowledge resources. It allows the pub-
lic to access online databases of scientific research
results, digital media publications and free training
and learning resources. This makes the internet a
crucial resource for improving education, particu-
larly vocational and higher education and scientific
research.
The internet also opens up new avenues for the
private sector, particularly small and medium-sized
enterprises (SMEs), by allowing them to tap into new
procurement and sales markets and rapidly access in-
formation on market conditions (e.g. current market
13 BMZ STRATEGY PAPER 2/2013e
prices, trade standards and supply and demand for
specific goods and services).
MOBILE TELECOMMUNICaTIONS
Telecommunications technologies can bridge even
long distances quickly and cost-effectively. Mobile
communications are particularly relevant in this
context, as they offer enormous potential for im-
proving the connectivity of previously disadvan-
taged population groups or those living in rural
areas.
For example, mobile technologies can open up access
to education content (through mobile learning),
to financial services and to microinsurance. They
also enable expertise such as a medical diagnosis to
be made available in remote areas where services
through traditional channels are either inadequate
or not available.
In many countries, mobile technologies (such as GSM
and WiMax) are the key technologies used to access
the internet. An increasing number of internet appli-
cations are also being developed above all at the local
level, in order to cater for the limited bandwidth and
capacity of mobile phones.13 Landline connections
and PCs often play a secondary role in developing
countries.
13
World Bank (2012): Information and Communications for
Development 2012: Maximizing Mobile, p. 12f.
2.4 ICT appLICaTIONS INCrEaSE THE
EffECTIvENESS Of DEvELOpMENT
COOpEraTION
Aid Management Platform
The Development Gateway Foundation set up the
Aid Management Platform (AMP) together with the
Organisation for Economic Co-operation and Devel-
opment (OECD), the World Bank and the Ethiopian
Government. The AMP, which is partly funded by
German development cooperation, is a web-based
tool that helps map the project landscape, imple-
ment, manage and evaluate projects, draft reports,
and track the use of funds.
The AMP enables governments to:
— manage aid programmes and activities
— monitor and evaluate impacts
— harmonise aid activities with national planning
objectives
— coordinate events with donors
— manage documents electronically
— create reports and
— reduce transaction costs
According to Ranil Dissanayake, economist at the
Ministry of Finance in Malawi, the AMP has helped
to significantly improve the effectiveness of aid in
Malawi: ‘With the Aid Management Platform, this is
the first time we feel we are getting exactly what we
need and what we asked for.’ (Source: http://www.de-
velopmentgateway.org/programs/aid-management-
program/aid-management-platform)
ICT makes an important contribution to increasing
the effectiveness of development cooperation. In the
2008 Accra Agenda for Action, developing countries
and donors underline their commitment to improv-
14 BMZ STRATEGY PAPER 2/2013e

ing information systems in developing countries, in
order to improve results orientation (‘managing for
results’). Another area highlighted in the agenda is
that of improving the quality of political concepts
and their implementation.14 The 2011 Busan declara-
tion on aid effectiveness reaffirms these goals.15 ICT
is also a driving force in disseminating information
and using reliable data. Key objectives of the Busan
declaration include the establishment of common
open standards for the electronic publication of
comprehensive information on donor contributions.
Other objectives outlined in the Busan declaration
also stand to benefit from the potential that ICT can
unleash, for example, in strengthening structures
in partner countries in the areas of public financial
management systems, donor coordination and moni-
toring and evaluation activities.

14
3rd High Level Forum on Aid Effectiveness (2008): Accra Agenda for
Action, p. 5.

15
High Level Forum on Aid Effectiveness (2011): Busan Partnership For
Effective Development Co-Operation, p. 6f.
15 BMZ STRATEGY PAPER 2/2013e
3. ICT for development – challenges
Using ICT in development cooperation can play a
critical role in driving sustainable development and
help reduce poverty. However, the following chal-
lenges must be taken into account in order to ensure
that the full potential of ICT can be unleashed:
> The availability and price level of telecommuni-
cations services depend to a large degree on statu-
tory provisions and other regulatory conditions.
The effectiveness of these regulations for the tele-
communications sector depends to a large degree
on the HR capacity of the responsible public insti-
tutions (such as national regulatory authorities)
and on the corresponding national institutional
frameworks (for example, actual enforcement of
legislation and contracts and corruption). Regula-
tory frameworks and measures are usually not
universally applicable and must therefore be
tailored to the specific country context.
> The use of ICT requires a reliable electricity sup-
ply, which is often not the case in many coun-
tries, particularly in rural and remote areas.
> Investment in making ICT sustainably available
to previously excluded groups (e.g. telecentres in
rural regions) must be based on a sound business
strategy or have a long-term source of funding.
> Given the high demand for ICT specialists in-
ternationally, ICT professionals – from telecom-
munications regulation experts to experts in IT
processes, programmers and technicians – have
a high market value. ICT specialists in develop-
ing countries are therefore often drawn to work
for leading, city-based companies in the private
sector or to migrate to countries with higher
wage levels. Local ICT experts who are trained
for development cooperation projects therefore
tend to have high occupational mobility and are
difficult to replace.
> Sophisticated ICT applications such as
e-government solutions should be planned as
an integral part of a comprehensive reform
project rather than as a purely technological
project. Otherwise they are prone to failure
despite meeting technical requirements. For
example, they may not fulfil institutional
conditions (due to resistance from staff mem-
bers or unsuitable institutional structures).
> In many countries, maintenance standards are
low and there is a lack of financial resources to
protect ICT applications from malware such as
viruses and worms. A lack of investment in IT
security can significantly reduce the sustain-
ability and effectiveness of ICT measures.
> As the availability of ICT widens, so too does
the problem of disposing of e-waste. To date,
e-waste has played a minor role in ICT projects.
However, to prevent it from escalating, ICT
measures should consider the end-of-life of
technical equipment and develop suitable
solutions.
> Finally, there is a risk that ICT applications will
be used for ethically or morally questionable
purposes. Repressive and undemocratic gov-
ernments could use ICT as an effective means
of controlling and repressing civil society and
suppressing democratic debate. Furthermore,
authoritarian regimes can use ICT to monitor
the expression of political opinions and identify
the people responsible. User-specific data can
easily be collected if security measures have
not been implemented or if indeed the state is
responsible for the misuse.
The challenges outlined above must be faced head-
on, if development policy measures to support the
use of ICT are to be sustainable in the long term.
16 BMZ STRATEGY PAPER 2/2013e
4. ICT in German development cooperation
Together with the United Kingdom, Germany is the
third-largest ICT market, after the USA and Japan.
The German ICT industry employs more than
800,000 people with a further 650,000 experts work-
ing in user industries. ICT is the main driver of inno-
vation. Germany is one of the world’s leading export
nations for hi-tech products and over the years it has
developed numerous pioneering innovations in the
field of ICT. The first fax network was set up in 1910
in Berlin, where the precursor to the first PC was also
developed in the 1930s. German companies played a
key role in developing the Global System for Mobile
Communications (GSM) and the Universal Mobile
Telecommunications System (UMTS), and indeed in
drafting the MP3 standard.
In 2010, the German Government also developed
the ICT strategy ‘Digital Germany 2015’16 in order to
further leverage the potential ICT offers for growth
and employment in Germany.
As ICT impacts on a wide range of sectors that drive
development, German development cooperation
aims to provide the required resources and build
relevant capacities in partner countries to fully lever-
age the potential offered by ICT.
4.1 INTErNaTIONaL OBLIGaTIONS
International agreements such as the Millennium
Development Goals (MDGs) provide a guideline for
German development cooperation in the field of ICT,
as do the objectives outlined at both of the UN World
Summits on the Information Society and by the Accra
Agenda for Action.
16
German Federal Ministry of Economics and Technology
(BMWi – 2010); ‘ICT Strategy of the German Federal Government:
Digital Germany 2015’.
> Millennium Development Goal 8 (MDG 8) aims
to develop a global partnership for develop-
ment, among other things to:
‘In cooperation with the private sector, make
available the benefits of new technologies,
especially information and communications’.
> Among other things, the Tunis Commitment
and the Tunis Agenda for the Information
Society adopted at the second World Summit on
the Information Society in 2005 highlight the
following:
‘We recognize the scale of the problem in
bridging the digital divide, which will require
adequate and sustainable investments in ICT
infrastructure and services, and capacity build-
ing, and transfer of technology over many years
to come.’17
‘We reaffirm our desire to build ICT networks
and develop applications, in partnership with
the private sector, based on open or interoper-
able standards that are affordable and accessible
to all, available anywhere and anytime, to any-
one and on any device, leading to a ubiquitous
network.’18
In the Accra Agenda for Action from 2008 and the
Busan Partnership Agreement from 2011, develop-
ing countries and donors committed to improving
developing countries’ information systems, in order
to improve results orientation (‘managing for results’).
Other areas highlighted in the agenda include im-
proving the quality of policy design, implementation
17
Tunis Agenda for the Information Society, paragraph 8.
See http://www.itu.int/wsis/docs2/tunis/off/6rev1.html
18
Tunis Commitment, paragraph 28.
See http://www.itu.int/wsis/docs2/tunis/off/7.pdf
17 BMZ STRATEGY PAPER 2/2013e
and assessments.19 The Accra Agenda for Action also
calls for country-specific systems to be strengthened,
including systems for public financial management,
procurement, auditing, monitoring and evaluation
and social and environmental impact assessments.
The Busan Partnership also agreed the establishment
of a common open standard for the electronic publi-
cation of timely, comprehensive and forward-looking
information on resources provided through develop-
ment cooperation.20
4.2 STraTEGIC apprOaCH Of GErMaN
DEvELOpMENT COOpEraTION IN THE
fIELD Of ICT
4.2.1 prIOrITy arEaS aND prINCIpLES
In view of the importance of ICT for driving sustaina-
ble development in general and for achieving existing
international commitments, German development
cooperation supports ICT in developing countries
within the scope of both bilateral and multilateral
cooperation.
Overall, the activities pursued by multilateral
organisations such as the EU, the World Bank or
multilateral development banks to establish struc-
tural and institutional conditions for using ICT (e.g.
expanding electricity networks, education) and to
provide information and knowledge as a global public
good are held in high regard. Through its contribu-
tions to the EU budget and to the budgets of multilat-
eral development banks and UN organisations such
as the International Telecommunication Union (ITU)
or the United Nations Educational, Scientific and
19
3rd High Level Forum on Aid Effectiveness (2008): Accra Agenda for
Action, p. 5. High Level Forum on Aid Effectiveness (2011): Busan Part-
nership For Effective Development Co-Operation, p. 5.
20
High Level Forum on Aid Effectiveness (2011): Busan Partnership For
Effective Development Co-Operation, p. 6f.
Cultural Organization (UNESCO), German develop-
ment cooperation provides funding for actors that
play a key role in opening up access to ICT and bridg-
ing the digital divide internationally.
For many years, German development cooperation
has supported multinational initiatives in the field of
ICT. Up to 2011 for example, it provided more than
Euro 1.8 million to the World Bank’s Information for
Development Program (InfoDev), which develops
comprehensive knowledge resources on ICT and
makes them available as a public good. BMZ is also a
founding member and long-term proponent of the
Development Gateway (DG), which offers internet-
based solutions such as the Aid Management Plat-
form and AidData Mapping. These solutions build the
administrative capacity of partner governments and
help harmonise the activities of the donor commu-
nity with national policies.
Access to and the use of telecommunications (such as
communications services and the internet) is effective
and sustainable provided that telecommunications
markets are liberalised, yet adequately regulated.
Within the scope of bilateral cooperation with part-
ner countries, German development cooperation
therefore focuses on supporting partner countries,
particularly in sub-Saharan Africa, in their efforts to
establish well-regulated telecommunications, which
in turn will create an enabling environment for the
use of ICT.
In addition, German development cooperation sup-
ports its partner countries in developing institutional
capacity in a targeted and needs-oriented manner.
The German Federal Government also supports ICT
sector development and provides financial and tech-
nical assistance for using ICT solutions to achieve en-
vironmental and socioeconomic development goals.
18 BMZ STRATEGY PAPER 2/2013e
The underlying principles of German development
cooperation’s bilateral contribution in the field of
ICT are:
1. Open, yet adequately regulated ICT markets can
provide effective and sustainable access to and
use of ICT.
2. Development cooperation supports partner
countries’ efforts to compensate for ICT mar-
ket failure and to maximise the social and
economic benefits of ICT.
3. Development cooperation supports part-
ner countries’ efforts to provide an enabling
environment and to extend private sector
involvement in the ICT markets of developing
countries.
4. Development cooperation promotes the
development of demand-driven local ICT-based
innovations in partner countries.
5. Development cooperation strengthens local
capacity to successfully use ICT in order to
achieve long-term development goals across
sectors.
6. Development cooperation supports the
exchange of knowledge between different
countries and sectors as well as the exchange
of ICT know-how.
7. Development cooperation supports the use of
ICT in different sectors, in order to improve the
efficiency of measures and boost the effective-
ness of development cooperation in general.
8. Incorporating ICT into development coopera-
tion measures is an effective way of building
local ICT capacity, establishing ICT sectors in
partner countries and sustainably strengthen-
ing countries’ own systems.
9. Bilateral support for ICT complements national
ICT programmes implemented by partner
countries and bolsters the commitment of other
donors in this area.
10. ICT applications supported by development
cooperation must be geared to the local context,
meet the relevant interoperability criteria and
be sustainable.
4.2.2 STraTEGIC fIELDS Of aCTION
An
Permanent access to telecommunications infrastruc-
ture and services should be possible for all sections of
the population at affordable prices. This applies above
all for poor and disadvantaged population groups and
people living in rural and remote regions. Universal
access/service policies must also take special needs
into consideration (for example, ICT services must
meet specific requirements to cater for people with
disabilities). It has become clear that liberalised and
privatised markets can play a major role in supply-
ing the population with ICT. Above all, the success of
mobile communications in Africa has proven that the
diffusion of telecommunications is particularly effec-
tive and sustainable when it is driven by private in-
vestment in liberalised telecommunications markets
with a solid legal and regulatory framework.21
21
World Bank (2008): Global Economic Prospects 2008: Technology
Diffusion in the Developing World. p. 53, 71.
19 BMZ STRATEGY PAPER 2/2013e
Although telecommunications markets in most
developing countries are already liberalised and
privatised to some degree,22 a general lack of well-
functioning competition can be observed here,
mainly for two reasons: Firstly, the telecommunica-
tions sector usually requires large-scale infrastructure
investment. Secondly, the availability of the frequen-
cies that mobile communications services need to
operate is limited. As a result, only a limited number
of companies can operate in the market, and this in
turn restricts competition. Individual providers may
then abuse their market power by demanding exorbi-
tant prices or driving competitors from the market.
It has also been observed that even in competitive
markets, it is not always guaranteed that all sections
of the population have universal and affordable
access to telecommunications. This is particularly the
case in low-income rural areas with low population
density where high costs mean that these services are
not profitable for telecommunications providers. As
a result, service providers tend to focus on the more
profitable urban centres, at the expense of rural areas.
State intervention in the form of adequate regulation
of the telecommunications sector is required, in order
to optimise the potential of a liberalised, privatised
market. The general conditions for a well-functioning
market must also be in place and incentives must be
created for private-sector investment, in order to im-
prove access to modern telecommunications services
(such as voice communications, the internet and
email). Improving access to high-speed broadband
internet connections is particularly important in this
context.
22
ITU (2011): Trends in Telecoms – ICT Market Overview.
Link: http://www.itu.int/net/itunews/issues/2011/03/04.aspx
Regulating telecommunications markets requires
expertise and capacities that many governments in
developing countries have not yet acquired to a suf-
ficient degree. The ICT sector is also very dynamic,
innovative and fast-paced. Therefore, the regulatory
framework must constantly be adapted to new devel-
opments.
Transposing a regional framework into national
legislation and regulating telecommunications
in Sierra Leone and Benin
In cooperation with the International Telecommu-
nication Union (ITU), German development
cooperation supported the Governments of Benin
and Sierra Leone in integrating the ‘ECOWAS
Supplementary Acts on the Harmonization of
Policies and of the Regulatory Framework for the
ICT Sector’ into national legislation.
This legal framework aims to create a harmonised
ICT market in ECOWAS member states. Local and
international experts assisted the institutions re-
sponsible for ICT policy and regulation in Benin and
Sierra Leone in transposing the complex system of
rules and standards into national legislation.
Against this backdrop, German development coop-
eration supports partner countries’ efforts to create
an enabling environment for the telecommunications
sector. The German contribution includes instru-
ments of financial and technical cooperation. Inputs
range from policy and legal advice to the develop-
ment of institutional capacity and training courses
for staff at regulatory authorities. Support is also
provided for south-south dialogue between partner
countries on regulating the telecommunications
sector.
20 BMZ STRATEGY PAPER 2/2013e
The German contribution is demand-oriented and
complements other development cooperation meas-
ures. It is also coordinated with ongoing projects sup-
ported by UN organisations, development banks and
other bilateral donors.
BMZ provides support to partner countries in:
> creating an enabling policy, legal and regulatory
environment for a transnational and regional
telecommunications infrastructure;
> developing regulatory measures to safeguard
affordable access to telecommunications in-
frastructure for population groups that were
previously excluded from these services;
> adjusting the regulatory framework to new
challenges posed by latest technology develop-
ments (e.g. mobile banking, broadband mobile
technologies, and convergence of TV, the inter-
net and voice telephony);
> ensuring that ICT infrastructure,
IT applications and data are secure.
ICT SECTOr DEvELOpMENT
German development cooperation supports partner
countries in creating a local ICT sector that is private-
sector oriented. It aims to help these countries build
the local ICT sector, enabling it to offer ICT services
and drive innovative ICT-based solutions for state
institutions, private-sector companies and consumers
in developing countries. German development coop-
eration also works with international organisations
in this context. The United Nations Conference on
Trade and Development (UNCTAD), for example, has
in recent years placed greater emphasis on the private
sector and ICT in its annual Information Economy
Reports and has expanded its cooperation with BMZ
and with German implementing organisations in
this area.23
To promote the IT sector, German development
cooperation offers equity and borrowed capital to
telecommunications infrastructure providers for their
start-up phase, paving the way for increased availabil-
ity of ICT. It also helps establish a local IT sector that
can offer ICT services by supporting the drafting of
cross-cutting sector development strategies to expand
the sector, developing industry associations and local
IT clusters, providing further education and training
to IT specialists and IT companies, and promoting
the development of a domestic market as well as the
expansion of export markets.
Financial support for a mobile operator in Ghana
German development cooperation helped expand
the telecommunications network in Ghana through
equity financing. Thanks to the investment, the
operator has been able to expand the existing
telecommunications network, and to invest in the
hauling of a new fibre-optic cable network that
allows increased use of the internet. The project
directly created about 1,700 jobs in Ghana and gener-
ated about Euro 15 million tax revenues per annum.
Financing ICT infrastructure
Demand for private investment in infrastructure
in developing countries is high, and is partly met
by private-sector investors providing equity and
borrowed capital. This affects telecommunications
23
UNCTAD (2010): Information Economy Report 2010 – ICTs,
Enterprises and Poverty Alleviation and UNCTAD (2011): Information
Economy Report 2011 – ICT as an Enabler for Private Sector
Development.
21 BMZ STRATEGY PAPER 2/2013e
infrastructure providers during the critical start-up
phase in particular. To meet this demand, German
development cooperation offers long-term financing
(in the form of loans and equity) to telecommunica-
tions infrastructure and service providers. This makes
an important contribution to generating added eco-
nomic value at the local level, which in turn increases
government revenue and creates and safeguards jobs.
Through its development finance institutions,
German development cooperation provides the
following inputs:
> funds for private-sector investment in partner
countries and mobilisation of additional part-
ners and capital for investment projects
> long-term equity and loans with matching
maturities to protect cofinanced investment
projects against instability and crises
> support for pioneer investors in new countries
and regions.
IT sector development
> Strategy development
Partner countries are assisted in drawing up IT sec-
tor development strategies. Strategy development
brings together all relevant stakeholders, in order to
define policies, measures and activities to strengthen
the (international) competitiveness of the local IT
industry.
However, many partner countries lack well-estab-
lished structures to develop strategies as well as com-
petent institutions/organisations to implement them,
and German development cooperation can offer the
expertise and support needed.
> Support for IT clusters and industry
associations
German development cooperation sees the estab-
lishment of industry associations and clusters as
a key component of a well-functioning IT sector.
Associations and clusters allow IT companies, many
of whom are micro-enterprises, to cooperate with
each other, consolidate their market power and
defend their interests.
Promoting the international competitiveness of
the Macedonian IT/software industry
Since 2008, German development cooperation has
helped Macedonia to develop exports in the IT/soft-
ware industry. In addition to drafting a comprehen-
sive export development strategy in the IT industry,
efforts have focussed above all on further developing
the Macedonian IT cluster through the Macedonian
Association of Information Technology (MASIT). In
this context, specific export-oriented services were
anchored in MASIT and a training academy offering
export-oriented training courses to IT enterprises
was set up.
Support provided to set up, further develop and
globally connect these IT clusters and IT industry
associations enhances the overall competitiveness
of SMEs in the IT sector. This promotes cooperation
between the individual enterprises and with state
and scientific institutions. German development
cooperation also advises on organisational structures,
business management and service portfolios
of clusters/associations.
> Capacity development for local IT companies
It is becoming increasingly important for IT com-
panies to develop solutions and offer services that
are tailored to local needs, and these solutions and
22 BMZ STRATEGY PAPER 2/2013e
services are becoming a growing component of
sustainable development. Having software and dig-
ital content in local languages deserves particular
mention here as this is a crucial factor if ICT solu-
tions and services are also to meet the needs of
the poorest sections of the population (‘base of the
pyramid’), which are increasingly regarded as an
unserved market. 24
Creating business and learning opportunities
with free and open source software in Africa
In cooperation with the Free Software and Open
Source Foundation for Africa (FOSSFA), German
development cooperation develops the capacity of
SMEs working in the field of ICT, to enable them to
use free and open source software (FOSS). It aims
to encourage the growth of African IT companies,
particularly in southern and eastern Africa through
activities in three areas: disseminating FOSS-based
business models, promoting FOSS certification and
supporting innovative local FOSS applications for
social and economic development.
Local experts play a key role in operating, upgrad-
ing and troubleshooting complex ICT applications
to safeguard their long-term sustainability. Free and
open source software (FOSS) is available to users with-
out paying licence fees and grants them the right to
use, change, localise and improve the software. FOSS
24
Three billion people live on less than US-Dollar 2 a day; one billion
have up to US-Dollar 8. Together, these two groups form the base of
the global income pyramid. They use most of their income to buy
food, clothing and fuel and have little left over for other expendi-
ture. They only buy small quantities and can rarely choose between
providers, which means that they pay higher prices than wealthier
customers – a phenomenon known as the ‘poverty penalty’. Together
however, these four billion people have purchasing power that is
estimated at US-Dollar 5 trillion (‘The Next Four Billion’, International
Finance Corporation / World Resources Institute 2007;
Link: http://www.wri.org/publication/the-next-4-billion).
is becoming increasingly important in developing
countries, where it opens up new business opportuni-
ties for IT entrepreneurs. Together with the global
‘open source movement’ which is currently gaining
momentum, FOSS offers new long-term resources for
local ICT-based processes and product innovations.
German development cooperation offers comprehen-
sive capacity development measures for SMEs work-
ing in the field of ICT. These include:
> Courses to train entrepreneurs to leverage to a
greater degree the potential that FOSS offers as
a key medium for local innovations and low-
cost solutions for sustainable development.
Inputs include advanced training on FOSS
programming, FOSS business development
training and measures to support continu-
ous exchange of experience at the national
and regional level and to promote south-south
dialogue.
> Training courses use freely accessible, localised
training material, e-learning and twinning
elements as well as support from local centres
of excellence for multipliers and cooperation
networks. Capacity development in the area of
ICT is a critical pillar of a future-oriented strat-
egy to promote innovation and technology in
development cooperation.
> Domestic market development
Domestic markets represent a business opportunity
that has not yet been sufficiently exploited by IT
companies in developing countries.
On the one hand, ICT applications can be provided
as a service for many other economic sectors. Local
IT companies are tuned into their customers’ needs
much more than large international companies, for
23 BMZ STRATEGY PAPER 2/2013e
example, and have a better understanding of the local
language, culture and customs. Local providers are
also usually more cost effective and more customer-
oriented. Developing, maintaining and operating
localised IT products offers great potential for the
IT industry and a number of benefits for end-user
sectors.
On the other hand, the public sector is also a potential
large-scale client. In developing countries, large-scale
ICT contracts are primarily awarded by the state.
Better integration into public procurement processes
can also offer local SMEs a myriad of opportunities.
However, these processes must be designed so that
they can be accessed by local SMEs working in the
field of IT. Transparent criteria and standards for pub-
lic procurement and the certification of the SMEs’ IT
expertise are important prerequisites.
German development cooperation assists state insti-
tutions in partner countries in drafting public tenders
for IT products and services so that local SMEs can
participate successfully. In its ICT strategy ‘Digital
Germany 2015’, the German Government stresses the
importance of open standards and interoperability,25
two aspects that also play a key role in German de-
velopment cooperation with partner countries in the
area of ICT. German development cooperation also
helps local SMEs operating in the field of IT to iden-
tify business opportunities in the public sector and in
other areas (‘matchmaking’).
> Export promotion
The export of IT services offers great business poten-
tial for SMEs in partner countries that specialise in
the area of IT. This means that export promotion is
an important area in IT sector development. Export
25
Cf. BMWi (2011): ICT-Strategy of the Federal Government:
Digital Germany 2015. p.7.
promotion is a key driver of the IT industry and can
safeguard income and create employment. Through
increased technology exchange at international level,
it can also boost the innovativeness of local SMEs that
specialise in IT. Promoting IT exports can also accel-
erate the integration of developing countries into glo-
bal markets and value chains. German development
cooperation supports export promotion for example
by conducting potential and market analyses to im-
prove the baseline data available to policy-makers
and by advising on the development and implemen-
tation of comprehensive export strategies.
e-government in Ghana: Transparency of payment
flows in the extractive industries
As part of the Extractive Industries Transparency
Initiative (EITI), German development cooperation
supports the process of making sure that state revenue
from the extractive sector in Ghana is transparent.
Through a development partnership, the programme
was complemented by setting up an IT-based
solution to collect data and monitor payment flows
of extractive commodities. The IT solution was in-
troduced in order to accelerate data collection and
simplify reporting. Since reports will be available to
the administration, politicians and the general public
faster than before, open debates on public revenue
streams will be facilitated.
The new system also allows reasons to be identified
if extractive companies fail to make payments or if
any other irregularities occur. This increases trans-
parency and improves the investment environment,
because transparent publications on money flows
send out the signal to potential investors that the
Ghanaian Government is committed to accountability.
24 BMZ STRATEGY PAPER 2/2013e
USE Of ICTS IN GErMaN DEvELOpMENT
COOpEraTION prOJECTS aND prOGraMMES
ICT can play an important role in achieving devel-
opment goals in the different sectors supported by
German development cooperation. These include
good governance, education, health care, environ-
mental protection, financial systems development
and economic and private sector development. The
following section describes two examples of ICT
deployment in greater detail.
ICT and promoting good governance
Promoting access to ICT is an important field of activ-
ity within the scope of promoting good governance,
for example.26 e-government applications increase the
transparency of government actions, improve commu-
nication between individual institutions and facilitate
communication between the government and citizens.
Thus, they advance constructive relations between the
state and society. German development cooperation
assists partner countries in developing and implement-
ing e-government strategies. ICT can also play a key role
in increasing the transparency of public revenue and
mobilising endogenous resources.
‘New’ or ‘social’ media enable people to publish their
own documents, images, sound and video clips inde-
pendently of traditional media, which can often be con-
trolled by the government. It allows people who were
previously excluded from political debate to participate
and to form their own opinion.
26
BMZ Strategies 178 Promotion of Good Governance in German
Development Policy, 2009.
ICT and rural development
Using ICT in different areas of rural development is
yet another example of how it can be incorporated
into development cooperation. Market information
systems that can be accessed online or via text mes-
sage enable farmers to choose better sales outlets
and delivery times or shape negotiations with inter-
mediaries.
Text messaging services, hotlines and websites in
local languages can circulate information about new
cultivation methods (which could be combined with
measures to address climate change adaptation) or
about pest control. Electronic data collection on
harvests at all levels of processing ensures that agri-
cultural produce is traceable. It sets the stage for the
certification of organic foods, for example, which in
turn generates higher prices for farmers. In general,
the use of ICT to communicate and collect data in-
creases market transparency, optimises value and
supply chains and facilitates quality control.
German development cooperation enables partner
institutions in developing countries to introduce
and use ICT applications, in order to effectively im-
plement reforms and achieve development goals.
Through technical cooperation organisations and
institutions, German development cooperation sup-
ports know-how transfer in the field of ICT capacity
development at the international and regional levels
and across sectors.
Measures to develop capacity for using ICT are in-
corporated into programmes where ICT is seen to
offer potential for achieving targeted development
goals in the priority areas of German development
cooperation. As a result, the development of institu-
tional capacity is an integral component of technical
cooperation projects and programmes in partner
countries. In this context, capacity development in
25 BMZ STRATEGY PAPER 2/2013e
the ICT sector is viewed as a comprehensive approach
that encompasses technological aspects (hardware,
software, IT security, maintenance etc.) and non-
technological aspects such as shaping an enabling
environment and organisational development meas-
ures (covering the legal and institutional framework,
training for managers, professionals and users, and
modification of information flows and administra-
tive processes etc.) This includes support for buying
equipment such as PCs and servers as well as HR
development measures in areas like using, maintain-
ing and developing ICT solutions.
Using ICT to promote the integration of cashew
farmers in Ghana into the value chain
As part of a development partnership, cashew farmer
cooperatives were provided with ICT applications and
trained in how to use them. The measure aimed to
enable small-scale farmers to increase their produc-
tivity and work together transparently and profes-
sionally with established companies.
An electronic registration system for cashew nut
deliveries also ensures traceability of the commodity
(which could lead to organic or Fairtrade certification
in the future) and provides individual delivery records
(which could increase farmers’ credit-worthiness).
COOpEraTION wITH THE prIvaTE SECTOr IN
THE ICT SECTOr
The ICT sector is dynamic, innovative and character-
ised by rapidly changing products. It crucially builds
on the expertise and commitment of the private
sector. The private sector plays a key role in providing
telecommunications services to the general public, as
already described in greater detail in the section on
telecommunications regulation (see above). Develop-
ment cooperation measures also offer a great deal of
potential for involving local and international players
from the private sector.
Within the scope of IT sector development, it is vital
that private-sector actors be involved at an early stage,
in order to ensure that projects and programmes are
geared to the needs of local enterprises, and ensure
long-term success. Public-private dialogue forums
are a tried-and-tested method in this context. Here
with support from German development cooperation,
representatives from the public and private sector, but
also from universities, research institutions and civil
society, can create new solutions together.
Development partnerships with the private sector are
another instrument that BMZ uses to support business
initiatives by European-based companies that work
towards achieving development goals. Introducing
and promoting technology innovations (including
ICT-based applications) in partner countries form a
key part of these efforts. Thus, technological innova-
tions or procedural improvements through ICT, in col-
laboration between development cooperation and the
private sector, can be sustainably leveraged for people
in our partner countries.
26 BMZ STRATEGY PAPER 2/2013e
CaSE STUDIES
e-health in Nepal
BMZ supports Nepal in improving its pharmaceutical
drug supply. As part of this initiative, the programme
on basic health care provision sets up a demand-
oriented Health Management Information System
(HMIS) that includes automatic drug ordering and
a constantly updated inventory. This helps ensure
that hospitals have sufficient drug supplies and that
medical equipment is well maintained. The HMIS is
flanked by management software (PLAMAHS) which
monitors the awarding of contracts for the preventa-
tive maintenance of medical equipment to companies
in the private sector. Measures include staff training
on using and customising PLAMAHS.
e-government in Tanzania: Tax collection and
administration
The integrated Tax Administration System (iTAX) is
a computerised software application that assists tax
authorities in collecting and managing taxes. It was
developed together with the Tanzanian tax author-
ity as part of a German development cooperation
project. iTAX helps ensure that taxes are collected
and managed transparently, efficiently and fairly.
It cuts through red tape and simplifies administra-
tive processes for tax payers. This in turn improves
tax compliance and increases tax returns. Increased
transparency also boosts the legitimacy of the gov-
ernment’s taxation system. Implementing iTAX
helped increase Tanzania’s monthly tax intake from
US-Dollar 25 million in 1996 to US-Dollar 300 million
in 2007.
Water sector reform in Zambia
The introduction of an ICT-based water supply and
sanitation information system by the National Water
Supply and Sanitation Council, with the support of
German development cooperation, showed that the
water supply rate estimated in urban areas was too
high. Accurate figures allowed the strategy for achiev-
ing the Millennium Development Goal relating to
water supply and sanitation to be adjusted, making it
possible to use funds more effectively.
ICT and e-learning management in vocational
training in Arab countries
In Arab countries, vocational education and train-
ing (VET) institutions face a number of challenges.
They must satisfy demand in the private sector for a
wide range of industry-specific IT expertise and also
integrate ICT into their organisational structures and
pedagogical approaches. The programme ‘ICT and
e-learning management in vocational training’ assists
in building the capacity required to develop ICT-
based training content. It gives equal consideration
to both aspects – technological expertise (hardware
infrastructure, software) and methodological and
pedagogical know-how.
27 BMZ STRATEGY PAPER 2/2013e
e-government in Ghana: Transparency of payment
flows in the extractive industries
(example also provided in document)
As part of the Extractive Industries Transparency
Initiative (EITI), German development cooperation
supports the process of making sure that state
revenue from the extractive sector in Ghana is
transparent.
Through a development partnership, the programme
was complemented by setting up an IT-based solution
to collect data and monitor payment flows of extrac-
tive commodities. The IT solution was introduced
in order to accelerate data collection and simplify
reporting. Since reports will be available to the ad-
ministration, politicians and the general public faster
than before, open debates on public revenue streams
will be facilitated.
The new system also allows reasons to be identified
if extractive companies fail to make payments or
if any other irregularities occur. This increases
transparency and improves the investment environ-
ment, because transparent publications on money
flows send out the signal to potential investors
that the Ghanaian Government is committed to
accountability.
Transposing a regional framework into national
legislation and regulating telecommunications in
Sierra Leone and Benin
(example also provided in document) anchored in MASIT and a training academy offering
In cooperation with the International Telecom-
munication Union (ITU), German development
cooperation supported the Governments of Benin
and Sierra Leone in integrating the ‘ECOWAS Supple-
mentary Acts on the Harmonization of Policies and
of the Regulatory Framework for the ICT Sector’ into
national legislation.
This legal framework aims to create a harmonised ICT
market in ECOWAS member states. Local and inter-
national experts assisted the institutions responsible
for ICT policy and regulation in Benin and Sierra
Leone in transposing the complex system of rules and
standards into national legislation.
Financial support for a mobile operator in Ghana
(example also provided in document)
German development cooperation helped expand
the telecommunications network in Ghana through
equity financing. Thanks to the investment, the
operator has been able to expand the existing tel-
ecommunications network, and to invest in the haul-
ing of a new fibre-optic cable network that allows
increased use of the internet. The project directly cre-
ated about 1,700 jobs in Ghana and generated about
Euro 15 million tax revenues per annum.
Promoting the international competitiveness of
the Macedonian IT/software industry
(example also provided in document)
Since 2008, German development cooperation has
helped Macedonia to develop exports in the IT/soft-
ware industry. In addition to drafting a comprehen-
sive export development strategy in the IT industry,
efforts have focussed above all on further developing
the Macedonian IT cluster through the Macedonian
Association of Information Technology (MASIT). In
this context, specific export-oriented services were
export-oriented training courses to IT enterprises was
set up.
28 BMZ STRATEGY PAPER 2/2013e
Creating business and learning opportunities with
free and open source software in Africa
(example also provided in document)
In cooperation with the Free Software and Open
Source Foundation for Africa (FOSSFA), German
development cooperation develops the capacity of
SMEs working in the field of ICT, to enable them to
use free and open source software (FOSS). It aims
to encourage the growth of African IT companies,
particularly in southern and eastern Africa through
activities in three areas: disseminating FOSS-based
business models, promoting FOSS certification and
supporting innovative local FOSS applications for
social and economic development.
Using ICT to promote the integration of cashew
farmers in Ghana into the value chain
(example also provided in document)
As part of a development partnership, cashew farmer
cooperatives were provided with ICT applications and
trained in how to use them. The measure aimed to
enable small-scale farmers to increase their produc-
tivity and work together transparently and profes-
sionally with established companies.
An electronic registration system for cashew nut
deliveries also ensures traceability of the commodity
(which could lead to organic or Fairtrade certification
in the future) and provides individual delivery records
(which could increase farmers’ credit-worthiness).
29 BMZ STRATEGY PAPER 2/2013e
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