Study critical of SA govt ICT spend
The South African government’s budgeted spend on broadband and Internet access pales I comparison to the annual spend by private companies in the ICT sector, according to a report out this week.
According to the Estimates of National Expenditure 2011, published by the South African Government, a total of R2-billion was budgeted for the Department of Communications for 2010/11. Of this total, R1.289-billion was allocated to ICT enterprise development, the report: Internet Economic Impact Study, conducted by World Wide Worx, said.
The only indications of further breakdowns within this figure point to it being allocated to Broadband Infraco and Sentech for investment in broadband and fibre infrastructure.
World Wide Worx noted that the total budgeted on broadband and Internet access by government amounted to R1.2-billion.
“While there are doubtless many other areas of government spending on Internet infrastructure and access, these are the only figures that could be directly identified as such in the budgeting breakdown,” it said.
For private firms, total investment in data infrastructure totalled R15.5-billion in 2011, the research group said, adding that the data only took into account the investment made by the large telecommunications operators into major infrastructure projects. “As a result, it can be regarded as a conservative estimate,” it said.
Speaking in her budget vote for the DoC in May, communications minister Dina Pule said: “Given the strategic importance of this enabling infrastructure, the DoC, together with the ICT industry, have committed to delivering 100% broadband penetration and delivering a million jobs by 2020. Our partnership with the ICT industry gives us confidence to galvanize sufficient resources to deliver on this commitment. At this point I would like to extend my gratitude to the ICT industry and acknowledge their commitment to work with us.”
The minister highlighted an allocation of R1.7 billion to the department. “Most of this money will be transferred to the SOCs (state owned companies) for their operational requirements,” Pule said.
The study revealed that the Internet economy contributes 2% to South Africa’s gross domestic product (GDP). Moreover, this contribution is rising by around 0.1% a year, meaning it should reach 2.5% by 2016.
“The message to government is equally clear: invest more actively in the Internet economy, and the benefits will spill over directly into the overall economy,” Arthur Goldstuck, MD of World Wide Worx, and author of the report, said.
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