PRETORIA, July 24 – Finance Minister Malusi Gigaba on Monday said the South African government want ED to probe the cost of data and its limitations to doing business in the country, particularly for small and medium-sized enterprises.
“We believe that further reforms in the telecommunications sector would be supportive of entrepreneurs and small businesses through reduction of costs to do business,” Gigaba said in Pretoria.
“Another key initiative is to direct the Competition Commission to investigate data prices. We are also taking steps to commence with the roll-out of the broadband programme. These would further reduce the cost of doing business, in line with our efforts to grow SMMEs.”
Gigaba made the remarks alongside the Organisation for Economic Co-operation and Development (OECD) secretary-general Angel Gurría who was presenting the latest OECD economic survey of South Africa at the National Treasury.
Gigaba said South Africa was of a strong belief that its own development was intrinsically linked to that of fellow African states.
“The government recognises that the sustainable South African economic growth is intricately linked to the growth of the SADC (Southern Africa Development Community) region. Slow growth and a rise in unemployment contribute to a decline in consumer demand,” said Gigaba.
“It is important for South Africa to play a leadership role in demonstrating the benefits of regional integration. Intra-trade in the SADC region remains constrained by the infrastructure bottlenecks. In this regard, we are working with the Multilateral Development Banks for co-financing of the cross-border infrastructure.”
Gigaba said the OECD economic survey has been launched at “an opportune time” at which South Africa was addressing the challenges of unemployment and inclusive growth.
Gurría said the OECD think-tank had numerous structural policy reform recommendations for South Africa, but the levels of inequality remained a major concern.
“South Africa remains a highly unequal society. The low employment rate, especially for black South Africans contributes to high income inequality. When inequalities are high, and where there remain unmet needs in education, health and infrastructure, when there is lack of transparency in the conduct of public affairs – this feeds to frustration and, of course, it also feeds perceptions of corruption and therefore a public reaction,” said Gurría.
“Looking ahead, more needs to be done to achieve growth that is both strong, but also inclusive, with a capital I, not just growth. It has to capture all the ones that have been left behind. At the OECD we have a dedicated initiative on inclusive growth that looks at how tackling high inequalities of opportunity.
He said the 2017 OECD survey on South Africa ultimately prescribed inclusive growth.
“[The OECD recommends] more access to higher education, more integrated labour market to reduce duality and informality, expanding regional markets, efforts to promote entrepreneurship and SMEs. This country is about SMEs. Low growth has kept unemployment high, at 27 percent. You can say it’s okay because you have a job, but now even for people with jobs, because they are paid very little, have this phenomenon of in-work poverty in South Africa,” he said.
Gurría said political and financial stability was a key ingredient of the economic goals South Africa yearned for. He, however, steered clear of political questions.
“Now why do we not talk about political issues? First of all, we don’t normally elaborate on political issues, maybe in some case we describe some of the things that have happened already that may have had an impact on the economics. Having been a minister of finance and foreign affairs for a long time, I can tell you, political things change so fast and it’s never what it looks like. Sometimes it’s not as complicated as it looks
“What we do not try is to basically look into issues which are, in this case, South African in nature. That is something we cannot bring to you as part of the mirror. We can bring you the mirror where you can see that other countries have done about taxes, education, fiscal consolidation, skills, regulation. Those things can be brought into the local expertise and experience. But the politics are quite unique and they change so fast.”