The South African ICT sector received limited attention in the Minister of Finance’s Budget Speech for 2013, as spending plans are cut citing global economic uncertainty and sub-par growth in South Africa.
Revealing spending plans for the year have been reduced by ZAR10.4 billion (US$1.2 billion), Minister of Finance Pravin Gordhan set out minimal plans for the ICT sector while seemingly shifting the onus for development to the private sector.
The speech stipulates allocations are to be made later in the year for some broadband initiatives, highlighting in particular the Dinaledi schools connectivity programme – although no specific pledges were made for broadband in the budget speech.
Near half the budget will go on the transport sector alone, and a number of energy projects will continue to be funded by the government. ZAR89 billion (US$9.9 billion) will be spent on transport, energy and communications. The Minister noted that ZAR599 million (US$66.8 million) would be provided to state-owned Sentech over the medium-term, for its role in the migration from analogue to digital television signal.
However, Gordhan seemed more concerned with garnering support from the private sector, calling for more engagement and investment by private players while also proposing to raise funds through taxing certain foreign businesses.
In order to provide an example and incentive to private entities, Gordhan revealed two telecommunications private investments will be made over the course of the year, to the tune of ZAR14 billion (US$1.6 billion).
Turning to a tax proposal as part of efforts to counter-balance below expectation revenue, the Minister said: “It is proposed that foreign businesses which sell e-books, music and other digital goods and services should be required to register as VAT vendors.”
The one technological development in South Africa to win special acclaim and funds through the Budget Speech was the Square Kilometre Array project, which has been awarded ZAR2 billion (US$223 million), up from last year’s budget of ZAR895 million (US$99.8 million).
