Ghana’s plan to remove import duties on smartphones, a move other African nations have contemplated, will help indigenous companies that are “playing by the rules,” according to a top executive for RLG, a Ghanaian firm that makes laptops, desktops and mobile phones.
Ghana’s government stated in its 2015 budget plan that it will remove import duties on smartphones to increase its penetration and boost policy to bridge the digital divide gap.
The budget statement also noted that while mobile phone penetration is high in Ghana, smartphones form only 15% of the total number devices.
“We believe it is a very positive move for the industry in general as it will make smartphones more affordable to all and help increase the smartphone penetration level in the country,” Prakash Somasundaram, RLG’s global CFO, told IDG.
“This is also expected to discourage grey market imports of devices — a move that will benefit players like RLG who have been playing by the rules,” he continued.
“With our recent launches of new smart devices, we expect higher volumes and higher capacity utilisation at our assembly plant in Ghana.”
The move could also encourage other countries to pass similar legislation if Ghana’s plan achieves its expected outcome, and could result in a multiplier effect, boosting producers and consuming markets across the region.
In its long term predictions, the government noted: “Communication is shifting from voice to data and mobile data is projected to grow 6.3 times between 2013 and 2018.”
It added: “It is expected that the increase in smartphone penetration will increase revenue from Communication Service Tax, VAT and corporate taxes.”
For RLG, it is a bonus but not a necessity, as the company has already extended its reach to Nigeria and Gambia over the last few years through the training it offers in computer and phone repairs, and the company is already bent on moving beyond West Africa.