According to the latest Malawi Economic Monitor by the World Bank, high taxation as one of the major factors behind exorbitant internet charges in the country. The Economic Monitor says Malawi’s entry-level broadband packages at 19% of per capita GDP are exorbitant than the 5.2% of per capita GDP in Uganda and two percent in Kenya.

The report says growth of internet usage is slacking in Malawi due to the above, hence the country needs to undertake significant policy, regulatory and fiscal reforms in order to realise digital dividends. Barely a week ago, a draft report by the United Nations Conference on Trade and Development (Unctad) highlighted challenges and recommendations for Malawi to make progress on e-trade. According to the report, Malawi is far from competing with countries in the world on e-trade due to poor infrastructure, high Internet costs and connectivity challenges.

Back to the recent report, it says most internet services are provided by only two operators, which lead to high levels of market concentration. By comparison, lower market concentration in Uganda has led to lower end-user prices. By encouraging higher competition and new investments in the ICT sector, Malawi will be able to benefit from lower costs and increase in services. The report therefore places Malawi on the 167th position out of 176 countries in the International Telecommunications Union (ITU) ICT Development Index.