Pakistan’s exports in the Information Technology industry witnessed a slight growth of 5 percent in the first four months of the current financial year 2018-19 compared the corresponding period of the previous year.
According to the State Bank of Pakistan (SBP), the export receipts of the highly potential sector of ICT could merely stretch to $355 million during the period of Jul-Oct as against of $337 million in the similar period last financial year.
The exports increased by only $18 million compared to FY 2017 which is much lower than recent predictions considering the incentives provided by the previous and the present government in terms of taxes and other facilities. The exports of ICT services might have improved in some foreign markets but the exports’ values grew slightly due to the impact of the exchange rate between the Rupee and US Dollar.
It is worth mentioning here that IT exports showed a double-digit growth of 13 percent in the last financial year crossing $1 billion mark for the first time.
Industry experts are of the view that export receipts through banking channels do not reflect the true potential of the IT sector, which a majority of experts believe, is as high as three times higher the reported figures of the central bank.
SBP introduced various measures to improve the export receipts of the IT sector through banking channels but the impact has not been realized, a concern for the central bank, the government and ICT stakeholders.
Recently, the central bank, on the directives of the government, directed commercial banks to ease payment options for freelancers of various services who are mainly specialist service providers in ICT related fields.
It is also working to introduce a renowned funds transfer service, Paypal, in Pakistan seemingly on a priority basis with active involvement from the Ministry of Finance and Asad Omar.
It is imperative that these measures translate into the desired targets, that is, the diversion of remittance inflows from unhidden sources to the banking channels and to the foreign exchange reserves of the country.
PM had compiled a Task Force on IT and Telecom to promote the ICT sector and its exports. Besides federal minister and secretary, notable figures of IT sector were taken onboard in the committee including Jehan Ara of Nest I/O, Nadeem A Malik, ex-country manager Microsoft, Syed Ahmed Chairman P@SHA, and Pervaiz Iftikhar CEO ICT Forum.
It is hoped the representatives from the IT sector will play a proactive in the newly-established task force and make great strides in grow ing the ICT sector by tapping its potential within the country and overseas.
The new think tank should not only work on a war-footing basis to address the concerns of IT industry but it should also devise a strategy to boost exports of the IT industry to increase the foreign exchange inflows in the country.
Developing industry-academia interaction for the skilled human resource; setting up IT parks to enhance the productivity of local companies and startups; establishing of training centers, exploration of new exporting markets; promoting outsourcing units, and bringing back local companies which shifted to different countries are some of the major areas to be focused upon.
The main reason of this slow down is Pakistan’s banking sector. Freelancer and many small software houses find it difficult to open bank account. Many foreign companies/clients pay through either PayPal or cheque. Even banks refuse to cash those cheques as they are in foreign currency and you need a foreign currency account that you can’t open due to size of your company.