ISLAMABAD: The country’s information technology and IT-enabled services (ITeS) export remittances comprising computer services and call centre services registered around 30 percent growth during the first two months of the current fiscal year (July-August) as it remained $584 million compared to $449 million during the same period of last fiscal year.
According to official data, IT exports remittances increased by around 26.8 percent on a year-on-year basis in August 2024 and stood at $298 million when compared to $235 million in August 2023. On a month-on-month (MoM) basis, IT exports remittances registered around four percent growth when compared to $286 million in July 2024.
The IT exports remittances reached an all-time high of $3.223 billion in the fiscal year 2023-24 while registering 24 percent growth when compared to $2.596 billion in 2022-23.
Minister of State for IT and Telecommunication Shaza Fatima Khawaja shared that YoY jump in IT exports is due to: (i) IT export companies growing client base globally, especially in GCC region,(ii) relaxation in the permissible retention limit by the State Bank of Pakistan, increasing it from 35 percent to 50 percent in the Exporters’ Specialized Foreign Currency Accounts, and (iii) stability in PKR encouraging IT exporters to bring higher portion of profits back to Pakistan.
A major development in July 2024 was Prime Minister Shehbaz Sharif ensuring that the SBP added a new category of Equity Investment Abroad (EIA), specifically for export-oriented IT companies, said the minister, adding that IT exporters can now acquire interest (shareholding) in entities abroad utilising up to 50 percent proceeds from specialised foreign currency accounts. This development will further boost confidence of IT exporters to remit proceeds back to Pakistan.
According to Pakistan Software Houses Association (P@SHA) survey 62 percent of IT companies are maintaining specialised foreign currency accounts.
A major development in July 2024 was SBP adding a new category of EIA, specifically for export-oriented IT companies. IT exporters can now acquire interest (shareholding) in entities abroad utilizing up to 50 percent proceeds from specialised foreign currency accounts. This development will further boost confidence of IT exporters to remit proceeds back to Pakistan.
Net IT Exports (Exports-Imports) displayed monthly number of $257million and increased by 26 percent YoY in August-2024. These net IT exports numbers in Aug-2024 are also higher than last 12-month average of $241 million.
Experts estimated that IT sector will continue its growth trajectory and momentum with likely growth of 10-15 percent for fiscal year 2025 to $3.5-3.7 billion.
The IT ministry has identified several constraints including inconsistency in policies, taxation issues and banking hurdles which are hampering the country’s information technology sector’s export potential of around $15 billion.
The Economic Survey says that the IT industry in Pakistan currently generates an annual export of around $2.6 billion.
However, to achieve the ambitious target of yearly exports of $15 billion in the next five years, adding at least 200,000 proficient and specialised IT professionals is necessary. Pakistan’s ICT industry caters to the world’s largest entities among its regular clients.
Copyright Business Recorder, 2024