SA data price probe looms
MINISTER: AIMS TO CUT COSTS FOR SMMES
As OECD report on SA presented to Treasury yesterday cites inclusive growth as primary need.
The government wants to probe the cost of data and how it limits doing business in the country, particularly for small and medium-sized enterprises, Finance Minister Malusi Gigaba says. “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 yesterday.
“Another key initiative is to direct the Competition Commission to investigate data prices. We are also taking steps to commence 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 was speaking alongside the Organisation for Economic Co-operation and Development (OECD) secretary-general, Angel Gurría, who presented the latest OECD economic survey of South Africa at the National Treasury.
Gigaba said South Africa’s development was intrinsically linked to that of other African states. “It is important for SA to play a leadership role in demonstrating the benefits of regional integration. Intra-trade in the Southern African Development Community region remains constrained by the infrastructure bottlenecks. In this regard, we are working with the multilateral development banks for co-financing of cross-border infrastructure,” he added.
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 leads 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 who have been left behind.
“At the OECD we have a dedicated initiative on inclusive growth that looks at tackling high inequalities of opportunity.”
The 2017 OECD survey on South Africa ultimately prescribed inclusive growth, he added. “[The OECD recommends] more access to higher education, a 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%.
“You can say it’s okay because you have a job, but now even for people with jobs, because they are paid very little, there is this phenomenon of in-work poverty in South Africa,” he said.
Gurría said political and financial stability was a key ingredient for SA’s economic goals. However, he steered clear of political questions. “We don’t normally elaborate on political issues. Maybe in some case we describe some of the things that have happened 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.
“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 what other countries have done about taxes, education, fiscal consolidation, skills, regulation. Those things can be brought into local expertise and experience. But the politics are quite unique and they change so fast.” – ANA