The Information Technology (IT) sector has gained prominence worldwide due to its colossal contribution to different sectors of the economy. However, despite its significance, Pakistan faces a shortfall in domestic investments. Therefore, it needs foreign direct investment (FDI) for the upgradation and development of IT infrastructure. Talking to WealthPK, Babur Majid, Chief Executive Officer of the National Information Technology Board (NITB), said that there existed immense potential for Pakistan to provide IT services to businesses around the globe. According to the growth figures of the Pakistan Bureau of Statistics (PBS), during the first seven months of the fiscal year 2022-23, Pakistan generated revenue of $1,523.280 million through the provision of diverse IT services to various countries. This indicates a growth rate of 2.38% when compared to the same period of the preceding fiscal year 2021-22.

Majid added that the slow pace of domestic investment impeded the upgrading of IT infrastructure in the country. “Amidst the policy rate of 22%, hoping for achieving a higher investment-to-GDP ratio is unrealistic.” While mentioning the immediate possible solution, he stressed the need for attracting foreign direct investment (FDI) in the sector. “FDI will bring in external capital, allowing for substantial financial investments in the IT sector. This infusion of funds will be instrumental in upgrading existing infrastructure, developing new technologies, and enhancing overall IT capabilities,” he underscored. Pakistan registered a cumulative FDI inflow of $3.2 billion during the fiscal year 2022-23. In contrast, India experienced a substantially higher FDI influx, amounting to $59.6 billion during the same period.

The IT sector in Pakistan attracted a relatively modest FDI inflow of $73.4 million in FY22, with the predominant share directed towards the IT services segment. “International investors often bring with them advanced technologies, expertise, and best practices. This transfer of knowledge can contribute to the adoption of cutting-edge technologies in Pakistan, improving the overall quality and efficiency of IT infrastructure,” asserted the NITB chief executive officer. Majid mentioned that given the current unfavourable fiscal conditions in Pakistan, the government lacked the capability to finance IT projects independently. “To foster sectoral growth, it is crucial for financial markets, particularly banks, to extend easy loans for the advancement of IT infrastructure in the country,” he said.

Credit: Independent News Pakistan (INP)