Similar to the textile sector, Covid-19 proved to be a blessing in disguise for Pakistan’s technology exports as well given that IT exports soared 58% during March 2021 against the corresponding period of last year.
Information technology (IT) exports touched $213 million last month, stated a report from Arif Habib Limited.
Moreover, technology products worth $1.512 billion were exported during the first nine months of fiscal year 2020-21, contributing 35% to the overall services exports and reporting a 44% year-on-year jump, revealed the data.
“The government should focus on technology sector as it has massive potential for exports,” said Arif Habib Limited Head of Research Tahir Abbas in comments to The Express Tribune.
Insight Securities analyst Muhammad Ahmed attributed the increase in exports to Covid induced surge in freelancing activities.
According to him, fair value of rupee against the US dollar was a huge factor driving the surge 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 tax credit of around 80% of export revenue helped raise technology exports, he said.
Systems Limited, one of the largest IT services and products exporters listed on Pakistan Stock Exchange (PSX), recently posted all-time high yearly revenue of Rs10 billion and reported a profit of Rs2.1 billion.
“The firm surpassed our estimates for revenue by 2% and for profit by 8% which is mainly attributable to better receivables management,” said Ahmed.
Systems Limited sustained growth momentum by posting 22% revenue growth in dollar terms in calendar year 2020, he said.
The newly added European region contributes 8% to company’s revenue that jumped by 74% in a year.
Read more: Expanding narrow IT export base
The construction of planned Special Technology Zones (STZs) are expected to provide a conducive environment to IT companies as they will help enhancing quality competition, he said.
The pandemic has unleashed Pakistani companies’ ability to perform off-site jobs seamlessly.
Although 58% growth is huge growth 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 growth of 30-50%, experts say.
They highlighted that the government could invest in infrastructure as well as human development.
Industry sources say that out of the bulk of the IT graduates produced by Pakistani universities, only 40% are trained to serve the export industry.
Published in The Express Tribune, April 25th, 2021.