The Commonwealth Business Council (CBC), which works at stimulating investment flows in developing member countries, is in talks with Indian software service companies such as Tata Consulting Services, Satyam Computer Services, and Cognizant to set up their software, research and development units in a proposed tech park at Uganda’s capital Kampala.
In an ambitious effort to replicate India’s booming tech services story in Africa, CBC is lobbying ministers and business leaders in India to enable a private sector-led, government-facilitated growth that will provide Indian companies access to a large talent pool in Uganda and tax-cuts, and turn Africa into a destination for software investments.
“Uganda has a highly literate population, and a knowledgeable and skilled workforce which can be used like in India to turn Uganda into the Bangalore of Africa,” said Mohan Kaul, director-general of CBC, that was set up by the Commonwealth Heads of Government in 1997 and represents 53 countries.
TCS declined to divulge its plans. “We cannot comment on specific plans, but we are always open to new opportunities and markets that will help expand our operations,” said TCS spokesman Pradipta Bagchi.
Cognizant denied interest in Uganda as of now. “Africa is not the place that we are targeting now and our focus primarily is on the US, Europe, China and India. Our next expansion will be in Eastern Europe, not Africa,” said Ram Kumar, spokesperson for Cognizant India.
Satyam, which has operations in Cape Town, South Africa, also denied any plans. “Our centre in Egypt covers the business in Africa,” Virendra Agarwal, Satyam’s senior vice president for Asia Pacific, Middle East, India and Africa.
Uganda, with a total population of 28.3 million, has a 70% literacy rate; nearly 85% of its population speaks English. It has the potential for $200 million in annual exports of information technology and back office services and can employ about 12,000. While India has begun to charge a minimum alternate tax of 11.3% from software companies, Uganda is offering a 100% tax holiday to lure tech companies there.
The tech park will be spread across an area of 7,000 acres in Kampala and will cost about $20 million, Kaul said. He expects to have the park inaugurated in November.
Kaul, based in London, is in India to participate in Commonwealth Connects 2007, a two-day technology event focusing on increasing computer and telecom penetration in poor nations primarily through public-private cooperation, that begins in New Delhi on Friday.