Address delivered by GCIS Acting Director-General Phumla Williams on behalf of the Minister of Communications Ms Ayanda Dlodlo at the Durban Business Fair – Business Indaba in Umlazi, 23 June 2017
Programme Director,
Executive Mayor, Cllr Ms Zandile Gumede
Representative from various business organisations
Representative from various youth organisations
Chairpersons of Entities,
CEO’s of Entities,
Ladies and Gentlemen,
Sanibonani,
Thank you for inviting me to address the Business Fair – Business Indaba under the theme “Radical Economic Transformation and its Implication for Small Businesses in the Townships”. It is also significant that this event is hosted in the township closer to the people.
I think this platform, which I am reliably told attracted 16 110 people last year, is necessary in, encouraging the revival of the township economy as well as entrepreneurs at large to showcase their products and create awareness for their businesses.
As government, we can only tackle many of the inequities in society such as those in education, unemployment, and healthcare by bringing together a diverse set of stakeholders.
I am raising this because we all know that there are still areas in the country not just in KwaZulu-Natal province, where certain sections of our people remain unconnected, underserved and under-serviced in ICT including broadcasting. There are still significant opportunities for further social improvement and economic growth in those areas which must be explored by SMMEs.
I know that before 1994, the total television coverage in the country was at 60%. Since the democratic government took over, we have increased this to about 93% of the population.
- We know that just over 80% of Mobile Phone Repair outlets and Internet Cafes are not owned by township entrepreneurs and SMMEs;
- We are aware that the lack of online presence by SMMEs deprives them of growth opportunities due to the fact that life is now digital. The absence of a community B&B or air-B&B in Mtubatuba or Inanda limits the options for travellers and opportunities for small B&B owners in the area to benefit.
- We also know that whilst millions of South Africans are on various Social Media platforms (such as Facebook, WhatsApp, YouTube), however, only Mxit and WeChat have local content ownership.
Programme Director
Everyday around the world, people are facing difficult challenges: poverty, unemployment, lack of access to quality education, and climate change, to name but a few.
Whilst we know that governments cannot resolve these challenges alone, we have provided a road map for the country’s direction through the National Development Plan (NDP) Vision 2030 which focuses on three key elements of inclusive growth and these are:
- Our country needs to grow in a way that creates employment
- Social services and wage goods should be affordable and accessible so that majority can achieve decent standard of living
- There should be platforms created as catalyst to drive development and citizens well being
ICTs plays a crucial role in all these three areas and this is important because communication is the foundation and an essential link for an inclusive market economy. ICT – access thereto- is increasingly an equaliser between those that can readily access services and those that are marginalised.
During the Department of Communications budget vote in May this year, I noted with concern that, one of the biggest problems in South Africa is the high cost of connectivity (data) and lack of ICT infrastructure particularly in peri-urban and rural areas where the majority of our people reside.
To this end, I committed to work together with Minister Cwele of Telecommunications and Postal Services to ensure that the Independent Communications Authority of South Africa (ICASA) meets the target of making South Africa a connected country, at the same time, it must also reduce both voice and data costs in the country.
We are embarking on this action because South Africa has been developed in an uneven manner: the urban areas and mainly the affluent areas have the latest modern technologies while the rural areas are underdeveloped with little of the infrastructure, such as electricity and telephone lines, broadcasting services that are needed to thrive in today’s knowledge economy.
As a general-purpose technology, the impact of ICTs, extends well beyond productivity gains. ICTs act as a vector of social development and transformation by improving access to basic services, enhancing connectivity, and creating employment opportunities. For instance, technology has incredible power to improve people’s lives, foster economic growth, and create opportunities for individuals, companies, and nations around the globe.
It is for this reason that many governments across the globe have learned that technology such as the Internet of Everything (OIT), Artificial Intelligence (Ai), Robotics, offers countries around the world the opportunity to provide better, richer lives for their citizens and create new ways for companies to do business.
Various studies highlight the fact that the high growth rate in the United States (US) economy during the 1990s, which saw productivity and employment rise, was due to the early and fast adoption of ICT. Therefore ICTs are the foundation on which the knowledge economy is based.
Distinguished Guests,
Not so long ago, our government through National Treasury reflected on the recent announcements by the three major ratings agencies that our economy that has gone into recession. We have also noted that all three ratings agencies have raised similar issues and one of those is the slow pace of growth.
These issues were discussed extensively at the last Cabinet and President Zuma recently convened an urgent meeting with several Ministers to discuss a way forward. Another meeting has been planned to ensure a coordinated response and to agree on timelines.
As government we have also met with the business organisations such as Business Unity SA (BUSA), the Black Business Council, the Black Management Forum, the Association of Black Securities and Investment Professionals (ABSIP), and the Black Investment Managers Business Forum to assess the state of the economy and measures that should be taken to advance our national development.
It is however, not all doom and gloom as the foundation for a higher growth path and socio-economic development has already been laid. The National Development Plan anchors all policies of government, and is the foundation for a higher growth path and socio-economic development. The Nine-Point Plan and Industrial Policy Action Plan are catalysts for growth and focusses on improving investor and consumer confidence through fast-tracking the implementation of the structural reforms for economic growth.
The successful implementation of the Nine-Point Plan will draw more South Africans into the economy and pave the way for a higher economic growth.
Initiatives such as the Industrial Policy Action Plan will further deepen the stimulation of growth, employment and the re-industrialisation of the South African economy. It will also assist in overcoming persistent structural hurdles to development, industrialisation and help transform our country’s economy.
However, growing our economy and creating much needed jobs is not the sole responsibility of government. It requires all of you present today to work together with government and create an economy that works for everyone. As government we are confident that we have the right polices and frameworks in place to grow the economy, but we need people such as you to take up entrepreneurship, and create the new jobs, services and industries necessary to move South Africa forward.
As government we are already providing the necessary support especially for the youth that want to build careers as entrepreneurs through the Industrial Development Corporation, National Youth Development Agency and the Small Enterprise Finance Agency. R 2, 7 billion has already been set aside by these agencies for the next five years for young people to take up opportunities in business. However we remain concerned about the onerous conditions imposed by some of these FDI’s which tend to impede access for young entrepreneurs and this conversation is on-going in government. In addition, the Ministers of Trade and Industry and Economic Development have also announced a merger between the National Empowerment Fund (NEF) and the Industrial Development Corporation (IDC). The merger will go a long way in meeting the considerable demand for funding by black entrepreneurs.
Government and private sector have established a fund for Small Business Support with equal contributions from both partners. It provides venture capital-type funding and mentoring to target groups, especially black entrepreneurs.
Ladies and Gentlemen,
A lot has been said about Radical Socio-Economic Transformation versus inclusive growth. The former is viewed by some as an indication of a policy shift in government, while the latter is seen as staying the course and ensuring prudent fiscal and economic policy. But are they really different or mutually exclusive?
In both cases the underlying rationale is to achieve meaningful growth that creates jobs, grows and diversifies our economy, and leads to more people - and not just a small segment of our population - sharing in our nation’s resources and wealth. According to the World Bank, “Inclusive growth refers both to the pace and pattern of growth, which are interlinked and must be addressed together. Rapid growth is unquestionably necessary for substantial poverty reduction, but for this growth to be sustainable, it should be broad-based across sectors, and inclusive of the country’s labour force.
The Finance Minister Malusi Gigaba captures these imperatives more succinctly when he states: “The vast inequalities and levels of poverty in SA should be at the heart of debates about government policies, whether they are called radical economic transformation, inclusive growth or anything else.”
It is unacceptable that 23 years into our democracy Blacks in general and Africans in particular who are the majority in this country still do not have a bigger stake in the economy. For instance, only 10% of the top 100 companies on the JSE are owned by Black people directly while Statistics South Africa shows that white households earn at least five times more than black households.
As part of this initiative to achieve inclusive growth, government will use its R500 billion procurement budget and R900 billion infrastructure spend to influence the behaviour of the private sector to advance transformation in the economy. As a start, new regulations making it compulsory for big contractors to subcontract 30 percent of business to black owned enterprises have been gazetted. I am certain that government will push this percentage further up and will ensure rigorous implementation and monitoring of this program.
Through such regulations and programmes we aim to empower small enterprises, rural and township enterprises, as well as designated groups, while also promoting local industrial development because government is committed to ensure that the township economy contributes to our GDP and that radical economic transformation benefits small businesses in townships. Government is confident that as more black businesses are established and became productive we will be able to get more South Africans, especially our young people becoming active participants in the economy.
The freedom that many South Africans had fought so hard for remains incomplete without the corresponding economic emancipation. Our work going forward is inspired by our hero Oliver Tambo, who proclaimed: “The objective of our struggle in South Africa, as set out in the Freedom Charter, encompasses economic emancipation. It is inconceivable for liberation to have meaning without a return of the wealth of the country to the people as a whole.” Strategy and Tactics, Morogorro, 1969.
Every sector of our society is duty bound to contribute to building a better nation where we all can prosper. The Ministry of Communications which I lead plays a pivotal role in broadcasting digital migration and the rollout of Digital Terrestrial Television.
The migration will also create new business opportunities and bring more players in the market, thus contributing towards creating entrepreneurs and jobs in the broadcasting and digital content-generation field. It is important for SMME’s to take advantage of these opportunities and create a niche for themselves in the entire value chain.
Opportunities in the Digital Migration and the Rise of Creative Industries
In the DTT environment, we will require more local content and downstream industries which SMMEs must take up. The availability of more television channels on digital means more access potentially for smaller and greenfields players within the broadcasting sector.
Whilst I am aware that the SABC dominates the commissioning of local content, commercial broadcasters will also require the supply of local content in the DTT environment to support our creative industry.
The Department of Trade and Industry has identified the manufacturing of STBs as an area to drive local procurement and SMME, at the same time, we want to encourage young township entrepreneurs and SMMEs to ensure that they reposition themselves for the manufacture of entry- level Integrated Digital Television (IDTVs) to accelerate South Africa’s transition to the digital television coupled with the strengthening of economic growth in the country.
Opportunities for Job Creation and Employment in the ICT as per the NDP
Programme Director,
We are raising these opportunities in my sector because, more than 70% of employment created is in service and services account for rising share of global trade.
We therefore, need to give more attention to stimulating ICT related sectors, investing in R&D and in e-enablement, to create right complement of job opportunities.
It is important to also note that, the NDP gives attention to industrial promotion of services due to its role in job creation. For instance, it is suggested that as a country, South Africa should aim to stimulate the creation of 700,000 jobs in Information Technology (IT) enabled services over the period of the plan (NDP) to 2030.
We have also realised that our country does not take advantage of global trade in services as compared to Malaysia, Korea, Indonesia, Turkey etc and we are hoping that platforms like the Durban Business Fair, will encourage our SMMEs to ensure the diffusion of ICTs well as to position their business for the Fourth Industrial Revolution.
In conclusion, I would like to quote French poet, novelist, and dramatist of the Romantic Movement, Victor Hugo, who was considered to be one of the greatest and best-known French writers of all time. I quote” “There is nothing as powerful as an idea whose time has come.”
Siyabonga!
