Software piracy hampers growth in Africa, IDC says

Rampant software piracy, weak legislation and poor regulatory enforcement has denied sub-Saharan African countries a chance to increase employment, tax benefits and GDP growth, according to a study issued this week by IDC and the Business Software Alliance (BSA).

Countries will continue to experience sustained economic growth over the next few years if the rate of piracy is reduced, according to the study.

"A reduction of 10 percentage points in software piracy can lead to substantial results in terms of new job creation, GDP contribution, increased local IT industry revenues, and increased tax revenues," the report said.

Microsoft, a BSA member, launched the report in Eastern and Southern Africa at a press event in Nairobi. Company officials said they hope to convince governments to work with the private sector to reinforce regulatory mechanisms and prosecute offenders.

"Reducing software piracy in Kenya by 10 percentage points over the next four years will directly create additional 977 IT jobs, contribute $73.6 million to the GDP and increase additional tax collected by $7.18," said Andrew Waititu, licensing and compliance manager, Microsoft Eastern and Southern Africa.

Microsoft products such as Windows and Office are the most pirated in sub-Saharan Africa.

Piracy rates are high throughout the region. The IDC study lists Kenya as having a piracy rate of 80 percent. Causes of piracy include insufficient legislative framework, poor regulatory compliance and lack of appreciation of intellectual property rights, IDC said.

The cost of software has also been advanced as a possible reason why people use pirated software although Microsoft says that its products are competitively priced and does not view cost as a major stumbling block for users.

Not everyone agrees.

"Very few firms can afford to buy software," said David Mugo, an independent technology consultant in East and Southern Africa.

"Most individuals use pirated software; most people only buy antivirus software."

Recently, Adobe launched CS5 in the Kenyan market through Elite Digital Solutions, a reseller company in East Africa, and some developers felt that the cost of products were prohibitive.

"Cost is an issue for developers," acknowledged Rahim Kara, a professional applications specialist at Elite Digital Solutions. He said, however, that companies are trying different pricing models. "There is a developer program from Adobe where users get to try out the development software on a free development platform, which has its own terms and conditions," he added.

Elite provides discounts but mostly on larger orders, and has different pricing models for NGOs, educational institutions and government.

"Price reduction is a likely possibility," for any software, Kara said. "In order to do that there will have to be a demand for the product and an actual market for thereto have a basis for an argument," Kara noted.

The IDC study found that awareness of possible problems with using pirated software generally helps reduce usage but the role of government was found to be vital. The study offered examples from Greece and Russia, where prosecution has worked as a deterrent.