Address by Minister Alec Erwin at the October 2007 Imbizo, Ugu District Municipality

The Mayor of the Ugu District Council, Councillor Sthembiso Cele
The Deputy Mayor, Councillor Ruth Bhengu
Members of the Council
Members of the local chambers of business and industry

I would like to thank the District Council for the warm welcome we received to the Ugu District Municipality, for this opportunity to interact with the community and in partnership, to find ways in which we can make South Africa and this District in particular, a better place for all who live in it.

We are indeed living in challenging and interesting times for the South African economy. Our economy is growing at rates never before seen in this country. However, this growth remains inadequate for us to achieve the goals we have set for ourselves, those of halving unemployment and poverty by 2014. An economy growing sustainably at six percent and above will ensure that we lift South Africans such as those living in this area out of the poverty trap, that opportunities for skills development and job creation are there and that ultimately, we close the gap between the first and second economy.

As part of the Accelerated and Shared Growth Initiative for South Africa (AsgiSA), we have identified that the Information Communication Technology (ICT) sector is a key contributor to the growth and development of our economy. ICT is a catalyst for economic growth and can facilitate the sharing of this growth. This growth, Mayor Cele, if not shared by all South Africans, is meaningless.

The high cost of broadband in this country and the limited access of this technology to all South Africans, hampers South Africa's participation in the global economy. If nothing is done about this, our country will get left behind, and we may miss out on key investment opportunities which could further accelerate economic growth. A study undertaken by government in 2005 found that South Africa lagged behind its international counterparts in terms of information and telecommunications service penetration, as well as the rate of new technology adoption. Broadband penetration relative to international benchmarks was also found to be low, and cost significantly more than recognised benchmarks.

I am pleased that the InfraCo Bill, which was commended to the National Assembly last week, was unanimously approved by the House. Broadband InfraCo is an intervention that aims to address the cost of broadband by making infrastructure in the national backbone and international connectivity available at cost. Ubiquitous, affordable broadband access should no longer be seen as the privilege of a few, but a basic right for all South Africans.

Created out of infrastructure which was previously owned by Transnet and Eskom, and consolidated into an Eskom subsidiary, Infraco is a strategic asset which will allow Government to leverage communications infrastructure for economic growth. This is an investment intervention unlikely to have been made by the private sector, and will allow the State to address a glaring market failure, and bring broadband to the country's under-developed and under-serviced areas.

Areas such as the Ugu District Municipality, which have such low ICT penetration, have the most potential to benefit from the establishment of an entity such as InfraCo. With ICT the possibilities for education, training, skills development, job-creation, basic service delivery and broad-based black economic empowerment (BBBEE) are immense. ICT has the ability to brighten the prospects for the youth of our country, and offer to them opportunities which they would never have had access to before.

The majority of municipalities within this District are rural, with even more limited capacity and access to broadband than most urban areas. The development of the ICT sector in this region will positively impact on the agriculture and tourism sectors, which are the key industries for growth and development in the region. This is why we have decided that parts of the undersea cable will be constructed on this coast, in this area which was declared a Presidential poverty nodal point in 2001 and requires assistance to accelerate skills development, job creation and broader participation by all its inhabitants in accelerating economic growth and development.

To retain skilled labour in the region and limiting the migration of its educated workforce to the bigger cities by developing the ICT sector, is crucial as it will contribute to its economic development. We concede that for the ICT industry to fully thrive in this area, other issues and in particular the issue of energy supply, need to be addressed. The electrification of all households in South Africa, as well as schools and clinics, is a top priority. The restructuring of the electricity supply industry, through the establishment of the Regional Electricity Distributors (REDs), is a necessary intervention which will address this key challenge.

Eskom is working flat out to increase capacity across the country and the building of new power stations, as well as the increase of nuclear energy in the supply mix, are some of the ways through which we aim to ensure security of supply into the future, so that not only our urban areas are electrified, but so that local municipalities such as Umzumbe and Vulamehlo can also gain access to ICT infrastructure and use it to better the lives of the people in these areas.

Councillor Cele, I can assure you that the decisions taken at this Imbizo today will not just end here. It is not our intention my department will ensure that all pronouncements made here today, are followed up on, so that we can indeed live up to our promise of ensuring a better life for all South Africans.

I thank you.

Issued by: Government Communications (GCIS) on behalf of the Department of Public Enterprise
23 October 2007