Pakistan plans to launch startup fund, 5G internet by mid-2024

KARACHI: The caretaker government aims to establish a 'Pakistan Startup Fund to attract venture capital investment in the country and introduce the next generation 5G internet by mid 2024, the minister for information technology and telecommunication said on Thursday.

Dr Umar Saif said the interim administration has set aside over Rs2 billion to create the fund, which will be matched by private investors.

"We have also secured commitments from venture capitalists to provide another Rs8 billion in Series 'A' financing for startups that graduate from the fund," Saif said after attending a signing ceremony for a strategic partnership between Habib Bank Ltd (HBL) and the Pakistan Software Houses Association (P@SHA).

Saif said the government also plans to create co-working spaces for about half a million IT freelancers. The minister said "by June or July of 2024, the interim government has set a deadline to introduce the next generation of mobile internet, known as 5G. The officials are working hard on the project and are optimistic that they will finish the work before a newly elected administration takes office and can continue the 5G auction process".

The minister said the IT sector is playing a significant role in the stability of the country's economy, and the government is taking vigorous steps to provide all possible facilities to the IT industry.

Mentioning the role of the Special Investment Facilitation Council (SIFC), the minister said that all required facilities are being provided to boost the IT and telecom sectors. Saif highlighted the SIFC’s recent decision that IT companies have now been allowed to retain 50 percent of their revenue in US dollar accounts.

"These companies will also be provided with corporate debit cards by the banks, which can be freely used to make international payments," he said. "This step has been taken on the recommendation of the IT industry aimed to encourage the IT and IT-enabled services to boost export earnings and bring additional foreign exchange into the country."

According to Saleem Ullah, deputy governor of the State Bank of Pakistan, technological advancements in the country are revolutionising economic growth. "The IT exports are to boost Pakistan's balance of payments."

He said the financial sector is the biggest user of IT products. To reduce the import bill, he emphasised that IT companies should replace IT imports. Deputy governor said Pakistan is among the few 15-20 countries around the world that have their own instant payment system like Raast.

Muhammad Aurangzeb, President and CEO – HBL, said the IT industry has the potential to be a major driver of economic growth and job creation in Pakistan. “This collaboration is a testament to our commitment to becoming a ‘Technology Company with a Banking License’.”

“It will provide an opportunity for HBL to engage with key stakeholders in the IT, freelancer, software, and gaming industry and showcase its innovative financial solutions and services that can meet the specific needs of the IT sector.”