Will the new $150m national backbone infrastructure loan lower cost of Internet?

by Christopher Kiiza
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In today’s digital world, internet has become an integral part of everyday life. It has revolutionarised work, access to information, and ways of doing business.

In academics, internet is very vital in conducting research, attending online classes, researching tutorials thus making learning more accessible and convenient for students of all ages, unlike in the past when students had to rely on books and libraries to gather information for their research projects.

On matters business, internet has leveled the playing field, allowing small businesses to compete with larger corporations since it provides businesses with valuable insights into market trends, consumer behavior, and competition in addition to advancing online commerce.

With the help of internet, businesses can gather data on website traffic, customer demographics, and user preferences, enabling them to make informed decisions and tailor their strategies accordingly.

However, the high cost of internet presents a significant hindrance to attaining these benefits.

In 2006, government conceived an idea of the National Data Transmission Backbone Infrastructure and e-Government Infrastructure Project (NBI/EGI) to develop high-speed internet connections in every major Ugandan town and to digitize the government services, connecting each Ministry to a single wide area network.

The NBI is an internet carrying optical fiber cable that runs across all the regions of the country.

The project was developed in response to the lack of a backbone network in the country at the time. Divided into four phases, the project aimed to provide connectivity to Government Ministries, Departments and Agencies, enabling E-Government by ensuring that all Government services are online, reduce the cost of internet among others.

Implemented by National Information Technology Authority Uganda (NITA-U), the Authority has completed the implementation of all the four Phases of the NBI/EGI Project.

In the four phases of implementation, however, 62 districts were not covered.

On December 6, 2023, Parliament passed a resolution to allow government borrow up to RMB Yuan 1 billion and 50 million equivalent to USD 150 million from the Export Import Bank of China to finance the supply, installation, commissioning and support of phase five of the national data transmission backbone infrastructure/ e-government infrastructure project.

“This loan is to secure resources to extend the national backbone infrastructure or the fiber internet. Government has been laying the fiber cable internet, and the project has so far covered half of the country. This loan is to enable us extend the backbone infrastructure to the rest of the country, covering the remaining districts. All the district which are not covered will now be covered in terms of this infrastructure, and in addition, it will also be used to do last mile connections where all district headquarters, health centers, schools, and other forms of government infrastructure will now be linked to the national backbone,” the Minister of ICT and National Guidance, Dr Chris Baryomunsi told Parliament.

“The benefit of this is that we are trying to ensure that the country is connected from corner to corner in order to ensure that all of us have access to internet,” he added.

Access And Affordable Use of Internet

According to the National Information Technology Survey Report 2022, a significant progress has been achieved in terms of the overall penetration and utilization of the ICT services.

The Survey, however, adds that the acquisition of such services across the country remains a challenge especially in rural, urban and gender divides.

The Report by the Parliament’s ICT Committee which scrutinized the loan request for NBI/EGI phase 5, indicates to the affordability of the services remains a challenge.

The Report indicates that although there has been progress in the sector, access to internet remains inadequate and highly priced for, by government and individual users.

“The Committee noted that the utilization of the national backbone infrastructure remains at less than 30% of its full capacity. This is attributed to the high cost, and this limits the number of users,” reads the report by Parliament’s ICT Committee.

Additionally, Government introduced ICT as a subject in all education institutions, and accordingly, the schools have to some extent been supplied with computers to aid learners study computer practical lessons.

However, the Committee report says, “some schools have failed to effectively utilize computers due to inadequate internet connectivity.”

“Further, majority of local governments are not connected with internet despite government policy to digitize most of the services. The committee was informed that some of the district local governments which are not connected with internet are those that came in place after the implementation of phase 1, 2, and 3 of the national back borne infrastructure.”

Baryomunsi said the implementation of the proposed National Data Transmission Backbone Infrastructure and e-Government Infrastructure project phase 5 will bring down the cost of internet since it is going to address the last mile connection to mitigate challenges which have been hindering the use of internet.

“As a Ministry, we have been promoting Business Process Outsourcing (BPOs), part of which is to create employment opportunities for our young people outside the country which they can do when they are physically in the country. So far, we have about 12,000 Ugandans who do jobs through that BPO arrangement. But one of the bottlenecks is that the internet is still high because you need cheap and accessible internet. Part of the solution to that is this project. Once we extend the backbone to the rest of the country, then the uptake and penetration will be higher. Once you have many users accessing the internet, then the cost will come down. With this project, we expect the cost to go down and create jobs,” Baryomunsi said.

He added, “through this NBI, the previous phases, the cost of the government provided internet now is at USD 35 per megabyte per second (Mbps) per month. The national average when you put in private sector, is [USD] 45. So, the one of government is lower. We will continue to lower it, and once this project plus UDAP (Uganda Digital Acceleration Project) are done, the internet must be much more affordable by Ugandans, and it will help us in job creation.”

On the issue of lack of computers in schools to aid ICT lessons, the Minister said, “the challenge has been the budget. We have been providing computers, but we have not covered all the schools. We want to commit that as resources become available, our target is to cover all schools so that our children can access computers and ICT services.”

Sheema South legislator, Prof Elijah Mushemeza remarked, “I dare say that ICT has not received the necessary attention it deserves. I would like to see ICT as a subject in primary schools or ICT as course in high education as a foundation course which is cross cutting, and that will compel us to even increase infrastructure because wherever you are, ICT is very critical.”

Committee Recommendations

The National Information Technology Authority Uganda (NITA-U) should fast-track extension of the internet services to the last served local governments and schools so as to enable the local governments to transact business as well bolstering the learning of ICT lessons by learners in schools. This will increase effective utilization of the national back borne infrastructure thus bringing the cost of internet down.

NITA-U in trying to enhance digital inclusion should ensure that all Ministries, Departments and Agencies (MDAs) that get connected to internet services do comply with the national IT standards.

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