I think this is a very myopic view point. Getting infrastructure for this sort of initiative will require cooperation of big business -- ISPs, Telcos etc and starting off from the get go as an illegal file sharing network immediately eliminates their participation

I'm in agreement with this. Does anyone expect Safaricom to come up with a torrent portal? What will they put up, the latest Tahidi High episodes available for download?

Why not focus on legal downloads? For example, a local mirror of the common Linux distributions would not only be extremely useful but also economically advantageous as it saves on outbound bandwidth and encourages more people to actually give it a try.

I'm sure that if this was actually presented in a coherent, logical fashion it may even be possible to get funding from industry (CISCO, etc).

IIRC there was an effort to achieve this locally, I'm not sure if its still around though.

Yes, there was such an initiative, it's still around. Additionally someone had suggested a localised app store along with freeware from local devs. This may be a good initiative to get local software in a central place. A CNet.com for the same. Anyone who has developed a CRM etc can sell it off in this portal, with pesapal etc, it's not so farfetched....