Pakistan’s COVID-19-induced economic boom is not just about a jump in its traditionally largest textile exporting base. Technology exports are also leaping ahead with a sizzling momentum.
For a country confronted with many longstanding economic challenges, exports in the two sectors – from agriculturally-driven textiles to technological expertise – have raised hopes for a quick rebound in the next couple of years.
In March this year, Pakistan posted a 58 percent increase in its information technology (IT) exports. A report by research organization Arif Habib Limited puts the IT exports at $213 million in March.
Pakistan’s technology exports soared to $1.512 billion during the first nine months of the fiscal year 2020-21, contributing 35% to the overall services exports and reporting a 44% year-on-year jump, according to ABL’s research data.
Systems Limited, one of the largest IT services and products exporters listed on the Pakistan Stock Exchange (PSX), recently posted an all-time high yearly revenue of Rs10 billion and reported a profit of Rs2.1 billion.
Still, experts say though 58% growth is a huge expansion for a Pakistani enterprise, global technology companies manifest growth amounting to 100%, 200%, or 300% therefore, there is a lot of room for improvement.
In the last five years, technology companies in Pakistan have witnessed a growth of 30-50%. Citing this tremendous growth trajectory, experts say increased government investment in infrastructure as well as human development, could open much bigger gates for the country’s technology manufacturing and exports.
Muhammad Ahmed, an analyst working for Insight Securities recently said the growth in the IT exports are a result of increased freelancing activities during the COVID-19 pandemic.
Pakistan’s ICT industry export remittances, including telecom, computer & info services have risen to US $1.298bn at a growth of 41.43% during Jul-Feb of FY 2020-21, in comparison to US $917.840mn during Jul-Feb of FY 2019-20.
InshAllah, our target’s to reach US $5bn till 2023. pic.twitter.com/tGgUuaGiA8
— Syed Aminul Haque (@SyedAminulHaque) April 22, 2021
Ahmed says a fair value of the Pakistani rupee against the US dollar was a huge contributor to jump in exports alongside divergence of inflows through legal channels following suspensions of flights over the globe.
“The efforts of the government to document the IT sector by offering a tax credit of around 80 percent of export revenue helped raise technology exports,” he told the Pakistani media.
Pakistan’s Information Technology Ministry says IT remains one of the fastest-growing sectors of the economy, contributing about 1% of GDP of Pakistan at about 3.5 billion USD.
Significantly, the IT exports have shown a consistent rise, having doubled in the past four years. Now experts say exports could grow a further 100% in the next few years.
The hopeful scenario has strengthened the country’s prospects of taking the IT exports to $ 7 billion sooner than initially targeted.
IT Industry of Pakistan
"World Economic Forum ranked #Pakistan among the best countries in terms of affordability of #ICT services"
Pakistan's IT industry is among the top 5 net exporters with the highest net exports in the services industries.#PakistanMovingForward pic.twitter.com/UwThmuotFf
— Ministry of IT & Telecom (@MoitOfficial) May 4, 2021
Minister of Information Technology, Syed Amin Ul Haq last month hailed the news that Pakistan’s information communication technology exports – ranging from telecom, computer to information services – rose to the US $1.298bn in the quarter.
The trend compares gainfully to the US $917.840 million during July-Feb of FY 2019-20.
Traders and experts say the ICT exports could hit $2 billion by the end of the year, and that the $5 billion looks within grasp by 2023.
