Opportunities for local software exporters to promote software in Middle East and Africa

Presently Sri Lankan software has been exported to regions such as North America, EU, Australasia and East Asia. With the recent global financial slow down, most of the matured software markets are not as vibrant as earlier for the software products and services.  Considering this fact, EDB has identified developing regions of the world as emerging markets for the Sri Lankan software.

“Since Sri Lankan software are successfully competing in several niche areas of the ICT markets in developed countries, Sri Lankan software exporters are better positioned to penetrate into less developed software markets in the under-developed countries as well,”   EDB Chairman and Chief Executive Janaka Ratnayake said.

“Moreover, these countries are comparatively at a higher growth rates than the developed countries and more receptive to high-tech software solutions in order to address their developmental problems in their path to development,” he added.

As an example, the ICT sector in the Middle East is expected to grow from 8% to 10% a year. According to World Information Technology and Services Alliance (WITSA), this growth, outperformed the global ICT sector growth which is being forecast to be in the region of around 3%.

The total amount of investment expected in this sector in GCC countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and UAE) is US$ 180 billion between 2010 and 2013. Saudi Arabia is a leading country in the region and projected spending in 2012 would be US$ 22 billion. UAE has spent US$ 12 billion on ICT in 2008 and having continuous steady growth.  Comparatively smaller countries such as Kuwait, Bahrain and Qatar also invested significant sum in comparison to their population sizes have ambitious plans to attract investments in ICT.

Economic growth expansion of oil and gas production, high oil prices and the booming real estate shape the overall economic situation in this region. The Middle East telecom markets have been buzzing with news of privatisation, expanded services and investment developments. IDC research indicates that certain markets in the region are nearing or exceeding 100% mobile phone penetration rate. Also rapid rise of internet use has translated directly into increased demand for special broadband infrastructure. Accordingly IT spending triggers the healthy rise in the regions, key vertical markets such as oil and gas, banking and financial services and governance. ICT performance in Middle East has been recorded in sectors such as mobile applications, gaming, security, banking, e-Commerce and mobile transactions and network infrastructure.

The value of Middle East mobile sector is estimated to be exceeded US$ 16 billion by 2013.  Around 60% of the region’s population is under 25 relatively enjoying good purchasing power and want to be connected in social networks, lifestyle and education.  

All in all there are various reasons why Sri Lankan ICT companies should consider diversifying their markets into the Middle Eastern region. One is, this region is investing huge sums of money in the ICT sector and sector growth will outpace the rest of the world for coming years. Also the markets in this region are not yet matured and provide opportunities for growing companies to gain market share. In addition, most of these countries have business friendly atmosphere and drive to build high quality IT infrastructure and advanced solutions in industry and consumer sector.

Finally this region is developing into a hub of transport, services, finance, trade and tourism benefiting some of the economic activities of BRICS countries and emerging economies.

The ICT has been the major economic drive in Africa over the past decade. As an example, annual compounded growth rate of 40% recorded in the ICT sector of the sub Saharan African countries. Even though mobile and internet penetration remain relatively low in Africa, today’s connectivity in this continent has never been before in the history. The expenditure in the ICT in the African continent could be over US$ 150 billion by 2016.

Even though the modernisation of Africa’s ICT has number of obstacles, there are technological advances which are favourable for the future of the African ICT. As an example, cloud computing provides important opportunities for region like Africa to acquire international technology in faster pace. Also some interesting projects such as one Laptop per child acts to reach ICT into rural community of the continent and to enhance the internet usability of the continent.

Sectors such as e-Government, e-Agrciulture, energy and health care are major growth centres of the African ICT space. Sri Lankan ICT exporters could be undoubtedly benefited by the development of African ICT markets.

SLEDB has identified GITEX Technology Week as one of the major ICT events in the Middle Eastern region and organising the participation of Sri Lankan ICT industry at this important event.  It comprises with opportunities for Sri Lankan software exporters to exhibit their capabilities in this market place. Even though GITEX is held in Dubai, UAE, it attracts business visitors not only from the Middle Eastern region but also from the African and Asian regions.

EDB is also focusing on South and East African ICT markets. Especially South Africa has been identified as a gateway to the Southern African region. In collaboration with the Department of Trade and Industry of South Africa and Joint Centre for Software Engineering, EDB will organise One-on-One Business Meetings and Networking Meetings for the Sri Lankan software exporters.

Launching pad to the East African software market has been identified as Kenya.  Nairobi, the capital city of Kenya, will host the AITEC Summit and Exhibition which could be used as an entry point for the Sri Lankan software companies to enter into this market space.

EDB is organising this integrated market promotion program with the assistance of the Sri Lankan foreign missions in Dubai, South Africa and Kenya.

Sri Lankan software exporters who are interested in this program are welcome to visit the link ‘Promotion of Sri Lankan Software Exports to Middle East and Africa’ in the EDB announcements of www.srilankabusiness.com or to contact Export Services Division of EDB through the e-mail address [email protected].