IT sector good for 2010

Johannesburg, 12 Sept 2007

Not only have many jobs been created in the IT sector, but it remains the number one growth sector in the country, says Econometrix.

"This is largely due to the move to value-added services," explained Dr Azar Jammine, director and chief economist at Econometrix. He cited a 3.1% growth in employment in transport and communication services from June 2006 to March 2007.

Dr Jammine spoke at the ITWeb Enterprise Risk Management Conference, at Gallagher Estate, yesterday.

The tertiary sector, which includes IT, is responsible for 66.4% of total gross value-added services in the country, which is up from 55.3% in 1990. The other sectors such as primary (10.6%) and secondary (36%) are not doing as well, he explained.

He also demonstrated how fixed investment growth, which includes the IT sector, has been growing healthily over the past few years, from 7.2% in 2001-2005 to 12.8% in 2006.

Leading up to 2010, Jammine assured SA there is very little to worry about financially, especially in the IT sector. Econometrix has predicted a 30% probability of a dramatically weakening rand, and a 60% probability that the rand will remain stable, between R6.80 and R8 to the US dollar.

The other 10% probability is of the rand strengthening to R6 against the US dollar.

According to Mervyn King, Unisa professor, author of the King Committee Report on corporate governance and former judge of the Supreme Court of SA, a lot of the capital gains in the IT sector are due to good governance.

"We certainly have the best corporate governance among emerging markets," he explained, and added that SA probably ranks among the top first-world nations in the world when it comes to good corporate governance.