3 Reasons Why Africa Government Should Use Local Currency To Purchase Foreign Supplied E-Government Software Systems
African currency transactions reduces foreign debt, encourages foreign investment into your country and speeds up knowledge transfer.
Posted on 13 July 2021 at 09:27am
Africa software local currency payment
For over 30 years, Western governments have proved that having a well designed management software system contributes to the development of a countrys economy and political stability.
As a result, several counties on the African continent are now investigating how best to make use of software technology by implementing of a Digital Transformation Strategy.
Designing and developing E-Government software systems require Engineers with the advanced technical skills that are not usually available locally within many African countries.
African governments must therefore seek the assistance of foreign software companies to provide these government systems for them. These foreign companies will usually insist on being paid in US dollars, Euros or other foreign currencies through direct payment or debt.
As an alternative approach, this article highlight 3 reasons why African governments should insist that foreign software providers accept African local currencies as payment for software services.
1. Reduce the need for foreign currency loans
Implementing your countrys Digital Transformation Strategy requires a long term relationship between government and the software provider.
When your government enters into a contract with a foreign software provider who only bills in foreign currencies, your government will end up trapped in a situation which requires you to consistently take out foreign currency loans in order to progress with your EGov software projects.
Because software systems need to be maintained, enhanced and upgraded over many years, this inadvertently locks your government in to cycle of technical development on the one hand, counterbalanced by an increasing foreign currency debt burden on the other.
Your government can avoid this situation by simply insisting that your foreign software provider facilitates full or partial billing in your countrys local currency.
As a result, your government will be able to develop your countrys technology at a much faster pace, without the downside of excessive foreign currency borrowing.
2. Increased Foreign Investment
When a foreign software provider agrees to accept either full or partial payments in your local currency, this demonstrates their courage, commitment and confidence in building a long term relationship with your country.
There are several advantages to having a local currency relationship with your software provider.
Firstly, the foreign software provider is more likely to reinvest the local currency revenue back into your country to support, local communities, businesses and jobs..
Additionally, by observing the response of a software provider when asked to accept your local currency as payment, you can quickly identify if the provider is really committed to your country and its long term prosperity, or if the software company simply has a Cut and Run mentality.
The term "Cut and Run" in this context refers to foreign companies which will simply take all the revenue they generate from your country, and move it abroad to be invested elsewhere.
3. Faster knowledge transfer to your local citizens.
Foreign companies will usually offer your government a degree of knowledge transfer as part of any Project Proposal.
However, once the project has started, in many cases the rate of knowledge transfer provided to your local citizens can best be described as slow, limited, conditional or just symbolic.
Foreign software providers who accept payments in your local currency are more likely to utilise your countrys local software engineers, as these staff can be paid using the local currency that the software company receives from you as payment.
As a result, it is in the best interest of the foreign software provider that as much knowledge as possible is transferred to the local software engineers, quickly, completely and without limits, to facilitate the completion of a successful EGov software project.
CFTA Software is an Africa Diaspora EGov software company made up of European based Engineers of African descent.
We specialise in the design and development of Integrated Commercial, E-Government and E-Governance software systems to Western standards, for governments and companies in the AfCFTA region.
Our pricing is in line with African Digital Infrastructure budgets, and we accept full or partial payments in your Local currency for software development projects.
Contact us to find out how to get started.
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We Design and Build E-Government Software for Africa
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