FY2015: Software board forecasts $500m in IT exports

Hopes to double the number to $1 billion by 2020.

KARACHI:

Islamabad is expecting to earn $500 million in Information Technology (IT) remittances in fiscal year (FY) 2015, Pakistan Software Export Board (PSEB) said in a post on its website earlier this week. The country hopes to double its IT exports to $1 billion during the next five years, according to PSEB’s chief.

The apex government body, which has the mandate to promote the country’s IT industry locally and internationally, revealed its FY2015 forecast for IT exports in a recent meeting of its board of directors (BoD). The expectations were based on a 35% growth in IT exports over last year.

Pakistan earns revenue through export of IT services, which includes software and helpline facilities outsourced to the country.

In his report to the board, PSEB Managing Director Asim Shahryar Husain said the number of software houses and call centres registered with them has increased by 12% during the first eight months of FY15.

“Our goal is to cross $500 million in SBP-reported export figures by 2016 and to increase it to $1 billion by 2020. We want to become the second largest IT exporter in South Asia,” Husain had told Business Recorder in an interview.

While the forecasts are based on official numbers, the country’s actual IT exports may be higher as some IT remittances remain off the radar.

The country’s IT exports were $370 million or Rs37 billion in FY14, according to State Bank of Pakistan (SBP). However, PSEB says it is working to ascertain the actual size of Pakistan’s IT exports.

The central bank has categorised IT exports under six categories, but sometimes banks don’t properly report IT exports to the SBP so some of the IT exports may not show on the radar, according to PSEB. In most, companies are transferring only the cost of their operations to Pakistan and keeping the remaining earnings abroad, it says.

In order to enhance the remittances of export revenue to Pakistan, PSEB is holding discussions and closely interacting with the IT industry. The IT export board wants companies to remit more of their foreign earnings to Pakistan to improve the country’s exports and reserves.

“We are planning new incentives such as awards for top IT exporters and tax benefits to motivate these remittances to Pakistan,” Husain told the newspaper – to lower the cost of operations, the bandwidth tariffs for IT companies have been reduced by 35%.

In 2000, the MD added there were virtually no companies with revenues exceeding $1 million but, at present more than 50 IT companies have reported exports in excess of that amount. “With consistent efforts of the PSEB and the industry, Pakistan should be able to more than double its exports by 2020.”

Talking about the PSEB’s efforts, Husain informed the BoD that they had setup a ‘Pakistan Pavilion’ for the first time in the history of Mobile World Congress 2015 in Barcelona. It helped mobile apps companies of Pakistan demonstrate their expertise in design and development of mobile apps and games.

The MD further stated that a Saudi group is exploring the option of acquiring different IT companies of Pakistan and then taking them public through initial public offerings. The PSEB is their strategic partner and road shows will be organised in Islamabad, Lahore, and Karachi at the end of April for this purpose, it said.

Published in The Express Tribune, April 4^th, 2015.

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