Research by the National Treasury shows that reducing the costs in the Information and Communications Technology (ICT) sector by half could increase GDP growth by 0.3 percentage points per a year – and create 200‚000 extra jobs over the next decade.
Finance Minister Nhlanhla Nene said this at The Director’s Event‚ a gathering of leaders from various sectors in Johannesburg which discussed how technology can be used to promote inclusive growth in South Africa.
Nene said to build the economy‚ people needed to have confidence in government.
“Confidence is indeed a step in the right direction‚ but not just confidence. Government also needs to deliver on reforms if we hope to allow that confidence to translate into jobs and investments for the private sector.”
Nene said both government and the private sector needed to leverage both technology and youth if they hoped to sustainably meet the growth target set out in the National Development Plan.
Nene said the country had structural challenges that it needed to address‚ including youth unemployment‚ which remained high at 55%.
“Our entrepreneurship levels are worryingly low; we rank only 27th out of 54 countries in Africa. We do not have enough small businesses in our country‚” he said.
Nene said that‚ for small businesses to flourish‚ costs had to come down.
“The cost structure of our economy remains too high from broadband‚ transportation and regulation making it very difficult for small firms to enter and compete against large players.”
Nene said the country also faced challenges in “upskilling” its people to meet the needs of business in the fourth industrial revolution
He said over 30 % of those who have not completed secondary education found themselves out of work.
“Once you have been excluded from the labour market‚ it is very difficult for you to get back in.”
Nene said it was not all doom and gloom as the country had the have talent and skills to resolve these challenges.
“Government understands that it must play its part to maintain fiscal to ensire a stable platform for growth.
“Government recognises that strengthening good governance and acting against corruption is crucial to rebuilding both the sustainability of and trust in state-owned entities that can … contribute to faster growth.”
He said government was aware of some of the key constraints to growth and was re-doubling its efforts to enact reforms that unlock productivity‚ increase competition and lower the cost of doing business.
“The National Treasury estimates that should the global environment remain supportive‚ the effective implementation of reforms in the areas such as agriculture‚ competition policy‚ telecoms‚ tourism and others will add up to three percentage points to real GDP growth.”
He ICT was important in promoting inclusive growth‚ improving service delivery and reducing poverty.
“Research that has been done by the department shows that 50% of reduction in ICT costs can increase GDP growth by 0.3 percentage points per a year to create 200 000 extra jobs over the next decade‚” Nene said.
-Ernest Mabuza -TimesLIVE