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SA’s excessive communications costs stifle growth, says Treasury

Staff Writer's picture

This article was originally published on ITWeb Read more at source.

National Treasury has cited excessive communications costs in SA as one of the factors inhibiting the country’s competitiveness.

Finance minister Tito Mboweni has called on members of the public to comment on a paper published last night, titled: Economic transformation, inclusive growth and competitiveness: Towards an economic strategy for South Africa.

The paper, prepared by National Treasury, is an attempt to translate the broad outcomes of inclusive growth, economic transformation and competitiveness into specific programmes, and draw on a range of domestic and international literature to support these policy priorities.

This paper considers the contribution of specific growth reforms that can achieve the stated outcomes.

According to Treasury, weak growth over the last six years is a function of both cyclical and structural factors, although structural factors have dominated, including sharply declining competitiveness, which saw SA’s position in the global competitiveness rankings fall from 44th to 67th between 2007 and 2018.

“A series of cyclical once-off shocks, such as political turmoil, drought and most recently load-shedding by Eskom have further exacerbated the depth of the slowdown. Together, these have served to compound and prolong the effect of weaker confidence, leaving us with an economy that has almost 30% unemployment,” says Treasury.

It believes that modernising network industries such as transport, energy, water and communications can promote competitiveness and inclusive growth. These industries are the backbone of the South African economy and key for long-term growth and global competitiveness, it says.

A 10% increase in fixed broadband penetration leads to a 1.35% increase in GDP growth in developing countries and a 1.19% increase in developed economies, Treasury notes.

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