Government and the private sector need to work together to get more South Africans connected to the Internet and facilitate greater participation in the formal economy, says finance minister Pravin Gordhan.
Gordhan says although SA now has access to international cables, and prices are coming down, Internet penetration is a challenge. He notes that government does have plans to increase penetration, but the country now needs to get down to execution.
The minister was speaking at a post-budget breakfast panel discussion, hosted by Business LIVE this morning, in Sandton.
Currently, about 10% of SA has access to the Internet, and about 2% of SA's population has access to broadband.
Government has targeted broadband penetration of 10% by the end of the 2013/14 financial year, according to National Treasury. Gordhan says the state will push harder over the “next year or so” to come up with concrete plans, and not only talk about improving access to communication.
Gordhan says increasing penetration will enable social benefits, and transform health and education. He says it will also bring more people into the formal economy through enabling better access to financial services, for example.
Get on with it
Government has clear targets, but the challenge is how to match execution to its strategy, comments Gordhan. He says people need to start making things happen “on the ground”.
“Stop talking and get on with doing things.”
SA is targeting the creation of five million jobs in the next decade, and economic growth of 7%. Gordhan says there is no formula to get the country to these targets, but “we've got to damn well try”.
SA is investing in areas of the economy that have the potential to create growth, notes Gordhan. He comments that government needs to make sure there is infrastructure, and remove red-tape to enable smaller businesses to succeed.
Structural imbalances
Although world economic growth is moving in the right direction, “there are structural issues in the global economy... that will result in one or other kind of tremor every now and then”. According to the International Monetary Fund, the global economy is growing at an average of 5% and is being led by emerging markets, says Gordhan.
SA must develop strategies that enable the country to survive in that environment. The finance minister says the country needs to be able to turn around quickly to take advantage of growth opportunities.
Although there are a few clouds on the horizon, as there are structural imbalances in the global economy, Gordhan is optimistic. “We must focus on the blue, not the grey clouds... we've got to look at the possibilities that exist.”
Gordhan says SA needs a growth-friendly fiscal policy, and government does not want to cut budgets to the point where the state cannot play a stimulation role. However, the private sector also has a role to play and cannot leave everything up to government as it accounts for about 70% of the economy, he adds.
Government wants value for money, and this is where the relationship between the private sector and government is important, Gordhan points out. He says too many tenders are built on greed, which allow a handful of people to benefit to the detriment of the rest of the country.
The private sector must change its behaviour, and not simply seek to benefit from government tenders, Gordhan says. There is enough money to do many of the things government wants to, but there needs to be a more serious focus on getting value for money, he adds.
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