Currency Concerns and the GITEX Factor Cause Decline in East Africa's PC Market
January 7, 2016 | IDCEstimated reading time: 3 minutes
The East Africa PC market – comprising Kenya, Uganda, Tanzania, and Ethiopia – suffered a year-on-year decline of 24.8% in Q3 2015, with shipments slipping to 108,088 units, according to the latest figures released by global research and consulting firm International Data Corporation (IDC). Given the region's reliance on imports, the ongoing depreciation of local currencies is driving greater inflationary risks and subsequently depressing consumer sentiment and purchasing power.
Each of the four countries monitored by IDC recorded double-digit declines year on year in Q3 2015, with Ethiopia suffering the steepest drop at 36.7%. Uganda saw its shipments fall 23.2%, while Tanzania and Kenya posted year-on-year declines of 22.3% and 19.7%, respectively.
"The monetary tightening policies undertaken by the region's governments have been a partial success," says James Mutua, a senior research analyst at IDC East Africa. "However, these measures have not been able to reverse the ongoing currency declines, largely because this weakness is being driven by external factors such as the strong U.S. dollar, expectations of U.S. monetary tightening, uncertainties in the euro zone, and slower growth in China."
Commercial shipments in the region fell 4.6% year on year in Q3 2015 as some ICT projects were delayed due to various financial, technical, and political obstacles. But it was the consumer market that was hardest hit during the quarter, with shipments to that segment falling 18.8% year on year. This was largely due to the flood of gray imports coming from the UAE ahead of the annual GITEX technology trade show in Dubai. As GITEX approaches, UAE distributors and partners try to clear as much of their older, less-appealing stock as possible, dumping much of it into Africa, even if it means incurring losses.
"The inevitable result," says Mutua, "is that local, official channel players are unable to sell their inventories as off-channel stocks from the UAE are being sold at much cheaper prices due to the lack of VAT and other taxes. This is particularly prevalent in Kenya's vast consumer market, and it's high time the government there revised its taxation policy for PCs or at least sealed the loopholes that exist at the various points of entry. Rather than bringing in the much-touted additional revenues, the taxes on PCs appear to be promoting off-channel business and strangling the revenue-generating potential of official channels."
Page 1 of 2
Suggested Items
Warm Windows and Streamlined Skin Patches – IDTechEx Explores Flexible and Printed Electronics
04/26/2024 | IDTechExFlexible and printed electronics can be integrated into cars and homes to create modern aesthetics that are beneficial and easy to use. From luminous car controls to food labels that communicate the quality of food, the uses of this technology are endless and can upgrade many areas of everyday life.
iNEMI Packaging Tech Topic Series: Role of EDA in Advanced Semiconductor Packaging
04/26/2024 | iNEMIAdvanced semiconductor packaging with heterogenous integration has made on-package integration of multiple chips a crucial part of finding alternatives to transistor scaling. Historically, EDA tools for front-end and back-end design have evolved separately; however, design complexity and the increased number of die-to-die or die-to-substrate interconnections has led to the need for EDA tools that can support integration of overall design planning, implementation, and system analysis in a single cockpit.
Koh Young Showcases Award-winning Inspection Solutions at SMTconnect with SmartRep in Hall 4A.225
04/25/2024 | Koh Young TechnologyKoh Young Technology, the industry leader in True 3D measurement-based inspection solutions, will showcase an array of award-winning inspection and measurement solutions at SMTconnect alongside its sales partner, SmartRep, in booth 4A.225 at NürnbergMesse from June 11-13, 2023. The following offers a glimpse into what Koh Young will present at the tradeshow:
Real Time with… IPC APEX EXPO 2024: Plasmatreat: Innovative Surface Preparation Solutions
04/25/2024 | Real Time with...IPC APEX EXPOIn this interview, Editor Nolan Johnson speaks with Hardev Grewal, CEO and president of Plasmatreat, a developer of atmospheric plasma solutions. Plasmatreat uses clean compressed air and electricity to create plasma, offering environmentally friendly methods for surface preparation. Their technology measures plasma density for process optimization and can remove organic micro-contamination. Nolan and Hardev also discuss REDOX-Tool, a new technology for removing metal oxides.
Nanotechnology Market to Surpass $53.51 Billion by 2031
04/25/2024 | PRNewswireSkyQuest projects that the nanotechnology market will attain a value of USD 53.51 billion by 2031, with a CAGR of 36.4% over the forecast period (2024-2031).