Even though SA’s power supply woes, sluggish economy and struggling state-owned enterprises (SOEs) will likely dominate the budget speech, some ICT sector experts have shared some “Tips for Tito”.
Finance minister Tito Mboweni will deliver what’s described as one of the most important South African budget speeches of the past 20 years toParliament on Wednesday.
Mboweni has already solicited advice from the public ahead of the much-anticipated meeting; however, ICT sector pundits have taken the time to highlight some key points for the minister.
The incumbent administration has, in the past, made sure to give much-needed attention to technology, innovation and digital skills. Mboweni’s economic blueprint released last year went as far as to identify the ICT sector among the industries believed to have the ability to fire up the country’s economy.
For market intelligence and advisory firm IDC, their tips for the finance minister echo those for the president on the occasion of the State of the Nation Address.
The IDC advises the minister to incentivise for growth – make it easier to do business in South Africa, remove unnecessary or burdensome regulation and implement tax and duty exemptions on ICT equipment and services.
In addition, the firm says the minister must enable public private partnerships to fast-track funding that enables ICT access in underserved areas, foster increased collaboration with global technology focused investors and development funds, as well as allocate and incentivise funds to skills development bursaries and investment in training institutions and apprenticeships.
Mark Walker, IDC associate VP for sub-Saharan Africa, explains: “Remove impediments to the use of technology to help drive economic growth in South Africa by reducing regulation, incentivising investment, enabling accessibility and encouraging innovation.
“Use the global rankings related to ease of doing business to see where South Africa can improve and learn from nations that are climbing in these rankings to do so locally.”
Working together
In an open letter, TransUnion Africa CEO Lee Naik says the nation is going to have to work together if it is to reach the target of R150 billion in savings.
Turning to Eskom, perhaps the biggest thorn in the minister’s side, Naik believes there are ways to mitigate the impact of power shortages without having to wait for new energy generation projects to go online.
The South African power utility has continued to roll out blackouts in the country, briefly introducing stage six load-shedding for the first time late last year. 2019 marked 12 years since the embattled Eskom introduced load-shedding.
Naik explains: “When Google started using DeepMind to manage its energy allocation, it was able to reduce energy usage by 40%, saving hundreds of millions of dollars over several years. What if we started using similar technologies to better manage how and where energy is used?
“Instead of plunging whole blocks into darkness for hours at a time, imagine if we had intelligent load-shedding that could respond to high demand in real-time and balance consumption so that no one has to suffer blackouts.
“In the UK, the national grid pays out companies that use smart energy platforms like Grid Edge to reduce their energy consumption during peak times. We know the manufacturing sector is one of the highest consumers of electricity in the country, so why not start with incentivising the use of smart energy management systems in high-consumption industries?” he asks.
Unemployment conundrum
In an effort to address skills gaps, government has made concerted efforts to increase skills development and equip citizens with the necessary skills to thrive in a digital society.
Naik acknowledges that government has put in place some impressive digitally powered initiatives.
He points out that programmes like the president Cyril Ramaphosa-initiated Youth Employment Service(YES), a digital jobs platform aimed at connecting one million work opportunities, are a good start.
However, what’s next is to understand why existing job and skills creation projects aren’t making a dent in our seemingly chronic unemployment.
“Embedding data analytics in youth development and entrepreneurship programmes can help improve the way they address the needs of both the beneficiaries and the larger job market. Overseas, digital tools like The Social Collective are being used to give civil societies insights into how well their skills development programmes are working, and where jobs must be created.”
Yolandi Esterhuizen, registered tax practitioner and compliance manager at Sage Africa & Middle East, says the country is running out of time to fix the unemployment rate.
Esterhuizen notes: “With unemployment at around 29% and youth unemployment of over 50%, joblessness is a major source of suffering and a threat to social stability in South Africa. The outlook is grim, with companies in sectors as diverse as financial services, retail, telecoms and technology announcing plans to retrench thousands of employees over the past few months.
“I am hoping to hear that government is taking drastic steps to address this crisis. A good place to start would be to streamline the administration of the Employment Tax Incentive. While well-intentioned, many small businesses find it so burdensome to administer this incentive that they prefer not to claim.”
She believes the YES programme should be better explained and marketed.
YES aims to create one million jobs for youth. In this process, firms can gain one or two levels on their B-BBEE scorecard, states Esterhuizen.
Open data, open business
Naik advises if local SOEs are to get the best chance of success, it’s crucial that new leaders are able to access the insights they need to make the right decisions and drive operational efficiency.
“Technology, combined with a culture of open data, can help us find the cronyism, corruption, wastage and irregular contracts that have been eating away at our SOEs from within.”
In addition, the minister must prioritise making sure SA is open for business, emphasises the TransUnion Africa CEO.
Naik commends the fact that processes that used to take months, such as registering a business or applying for UIF, can now be done in one day thanks to the Bizportal platform.
“I hope that this year brings many more projects aimed at streamlining South Africans’ ability to do business, whether it’s starting their own businesses or accessing the resources they need to be successful. Digitising government services will go a long way towards cutting the red tape that threatens to throttle SA businesses.”
Smarter data and digital technologies can drive success, concludes Naik. “If we want to make the most of a tighter budget, let’s invest in digital solutions that drive our efficiency and help us do more with less.”
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