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Services And Infrastructure In South Africa Economics Essay

From twenty years there's been tremendous growth in the field of IT known as Information Revolution. The Information Revolution is changing the speed of which information is communicated. There are many facilities IT provides like:

Calculations can be conducted instantly,

The costs and speed of observation of physical phenomena.

Applications than it in transportation mean that folks and goods can be moved better;

Applications to the production process imply that goods and services can be produced better.

Africa's information and communications has been not fulfilled. In 1990's there's been less than two percent of world investment in telecommunications in Africa. Moreover, the It really is sweeping even faster throughout the rest of the world. Although the Internet is not the only technology of the info Revolution, this can be a clear indicator of trends and developments. By 2000, Africa had only 0. 22 percent of the world's Internet sites, which was less than 3 years before.

There remain many countries in Africa with policies that restrict the full development of IT. The main element to IT success in Africa is to discover a way to overcome relevant policy issues and find out what you can do to regulate them. Four factors have been considered would have to be overcome:




How do these factors influence who uses IT, and for what purposes, in the economic, social and political systems in these countries?

What will be the economic, social, and political implications of the several patterns useful of IT that will be expected to emerge in these regions?

Economic, Social and Political Impact of Information Technology in South Africa:

The Social Impact

Education is the instrument of any country's development. Information technology depends on the option of the ease information. Within a country such as South Africa one finds that poor education infrastructure can be significantly corrected with tele education. Indeed, in the urban areas of South Africa, students get access to television programs on math, physics, and chemistry. In rural South Africa, you have to truly have a satellite dish to gain access to the same programs. This suggests a larger trend, rural Africans do not have access to the same information technology benefits that urban Africans have as Africa is normally a rural continent. It isn't a surprise the particular one sees a comparatively strong correlation between low tele densities. For instance, with a lack of social development.

The Economic Impact

The it has a positive development on the economy of African countries. South Africa's economy has grown over time, even during the difficult days factories operated with telephone service, electricity, and water, throughout the country's recent history. Communication is helpful for the productive sectors like the ability to send first a telex, and then a fax, now an e-mail has helped monetary growth.

Today in South Africa, industry complains most about having less bandwidt affordability for today's it network. Here the task that ISPs face is the fact that the federal government, greatly fears competition from the private sector. Foreign investors end up as lower partners with the government intervention running a business.

One of the success stories in South Africa is the city telephone kiosk. In rural and semi-urban areas these take the form of containers one ordinarily sees on ocean-going cargo ships. For wireless service, they have a cellular antenna and cellular pay telephones inside.

The Political

The leadership here is autocratic type means that they does not wish to see the it infrastructure developed. The avoidance to start to see the growth of the IT infrastructure among some African leaders is based upon a concern with its political impact. Leaders worry that informed citizens could have higher expectations with their governments.

Some questions were raised like;

Why South Africa has been such fertile ground for modern IT growth?

What helped South Africa to go as fast as it did?

Was IT a driver for the changes in South Africa condition?

How does South Africa directly control IT use and diffusion?

How does this direct control impact South Africa's ability make decisions, which determine future options for this as well for other countries?

Will technology discover a way around government systems despite their finest efforts to impede diffusion?

Will governments be considered a significant obstacle to IT diffusion?

Will governments be realistic and see the private sector as an ally?

Answers to such question will provide summary of IT role and scope in South Africa. There's been tremendous opportunities and scope than it business in South Africa.

With respect to AIDS, leadership was raised as an important issue. South African President Mbeki himself surfs the Internet, and appears to have gotten "bad" information about AIDS from it, and appears to have set national AIDS policy based on this "bad" information. South Africa's work force is comparatively well educated but nonetheless susceptible to AIDS because the available information about how to regulate AIDS has yet to be fully effective in changing risky behavior.

First, it was proposed that traditional sources of information normally controlled by the state of hawaii have been eroded as a result of increased Internet connectivity. Second, increased IT diffusion was deemed likely to increase immigration and the influence of the Diaspora. These two trends may pose a complex dynamic between an outflow of human resources and an inflow of knowledge and capital, which together can bring about both monetary and political benefits and vulnerabilities.

Applications from it:

There are several application provided by the IT use good for both business and country:

Governance Applications (PC usage, finance and ministry customs)

Business Applications (Central bank transfer)

Social Welfare Applications (AIDS awareness)


In short, IT is important to both politics and policy. Decentralization offers a good exemplory case of a situation where assistance in It offers a low-cost, highly leveraged approach to simultaneously achieving several purposes of the United States. Similarly, the Leland II program of USAID provides a low-cost method of building capacity important to numerous US objectives in Africa. These were to the developed world;

Provide support for the Association of Telecommunications Regulators.

Work to assure African ownership of the development content put on the Internet.

Recognize and support African universities as sustainable delivery mechanisms for this development.

The biggest change in Africa is the coming old, to both influence and power, of a new, globally-oriented generation. This generation includes the natural allies of america, our natural financial and political partners. IT is the ideal vector to support and empower these future leaders.

There are several companies' Indian companies employed in South Africa developing a potential for others companies to invade their business in South Africa. Examples are:

Premier Infosys Pty Ltd

Sahara Computers (Pty) Ltd.

Sterlite Technologies Limited

Wipro Technologies - Africa IT Testing


South Africa's 2010 Trade Policy and Strategy Framework (TPSF) document contains 'strategic tariff policy' consistent with government's major development objectives, main included in this are employment creation and industrial development and restructuring. The TPSF explains policy of 'strategic integration with global economy' designed to participate in the globe economy while preserving sufficient policy space to attain domestic objectives. This policy shows the need to create a trade strategy on the new generation trade issues, including trade in services. The dependence for a work of trade in services rests on the high share of services in domestic and global value added, increases in services trade and the significant proportion of FDI for services sectors.

Pressure on developing countries to liberalise their services trade at multilateral, regional and bilateral levels can be an important concern. The paper shows debates explaining the role of the services sector in development and its requirement in South Africa's employment creation and professional policy achievement of goals. The questions are been considered about the feasibility and desirability of services trade liberalisation at the regional, bilateral and multilateral levels, as well as in North-South versus South-South relations. The paper depicts a focus on the services sector to the neglection of manufacturing will be insufficient in development strategy. Research on the distributional activities and employment effects services trade liberalisation at the sub sectoral level is highly needed to show the linkages between manufacturing and services sectors.

The service concludes that, although efficient and reliable services are needed for industrialisation, generalised services trade liberalisation is not the correct strategy for the assistance sector either in South Africa or in developing countries more generally.

Services trade liberal in GATS or in North-South trade agreements such as the Economic Partnership Agreements is also not the best way to improve services sector efficiency and exploit the sector's growth and employment potential. The assistance stresses the importance of services in trade policy formulation, however, as envisaged in South Africa's TPSF document, and outlines research needed on the assistance sector in view of South Africa's employment creation and professional policy goals.

In alignment with the global trends, Indian service sector has witnessed a significant booming recent times it is one of the major contributors to both employment and national income. The activities under the heading of the service sector are very varied. Trading, financial, healthcare and business services, community, social and hotel and tourism come within the gambit of the service industry. One of the key service industries in India is health insurance and tourism. They are essential for the country's monetary stability. A robust healthcare system really helps to create a solid and diligent human resource, which in turn can contribute productively to the nation's growth. Service sector is the lifeline for the social financial growth of a country. In recent time it is the largest and most effective growing sector globally contributing more to the global output and employing more folks than every other sector.

The real reason for the growth of the service sector is due to the increase in urbanization, privatization and more demand for intermediate and final consumer services. Quality services are essential for the wellness of the economy. Globally outsourcing industry would continue to grow in India. Following success folks and UK, more countries in europe are preparing to outsource their business. Technological power shift from the West to the East as India and South Africa emerge as major players. Political backlash over outsourcing would drop as companies reap the advantage of outsourcing.


Current Scenario of India:

Infrastructure contains 8 major industries in India, which include crude oil, petroleum refineries, coal, electricity, cement, steel, fertilizers and gas which involves incorporate weight of 37. 90 percent in the Index of Industrial Production (IIP) stood at 139. 5 in September 2012, in line with the data released by the Union Ministry of Commerce and Industry.

Developing Infrastructure in India:

By 2025, India is expected to be the world's most populous country, surpassing China. More of this growth will occur in the country's developing cities, where almost another of the world's population will eventually live. The aim to develop essential infrastructure for India includes drinking water treatment, transmission and distribution systems; wastewater collection and treatment systems; stormwater management and drainage; solid waste removal; landfills; and building and modernizing roads. These improvements are expected to boost living conditions, strengthen local economies and offer a cleaner environment for residents.

The development program in north-eastern region states of Nagaland and Sikkim will benefit approximately 3 million people. Residents in these areas will be provided with adequate usage of clean, safe normal water and improved sewage and sanitation, drainage and solid waste management. You will see improved road and transportation networks.

Meanwhile, 2. 6 million residents in the south-western state of Kerala will reap the benefits of reliable water supplies, improved sewerage and solid waste management. In addition to these services, work in Kerala will include construction of roads and civic amenities.

Following are some of the major sectors:

Power Sector

Generation capacity of 122 GW; 590 billion units produced (1 unit = 1kwh)

CAGR of 4. 6% over the last four years.

India has the fifth greatest electricity generation capacity in the world

Low per capita consumption at 606 units; less than half of China

Coal-fired plants constitute 57% of the installed generation capacity, accompanied by 25% from hydel power, 10% gas based, 3% from nuclear energy and 5% from renewable sources

Major structure of power sector:

Majority of Generation, Transmission and Distribution capacities are with either public sector companies or with State Electricity Boards (SEBs).


India has second most significant Road network, on earth.

Total length is 33 lakh kms.

Carry 65% of fright & 80% passengers

National highway constitute only one 1. 7% of roads but carries about 40% of traffic

Annual projected growth is 12-15% for passenger traffic & 15-18% for cargo traffic


About 64000 km of rail network

Connects 7083 stations

Carry 2. 20 crores passengers & 2. 50 million tones of goods everyday

About 1. 5 an incredible number of workforce

In 1947 rail network around 53000 km

Added only 11000 km of network in last 65 years


3rd largest on the planet & 2nd greatest in Asia.

Mobile subscriber base-936. 12 million.

Overall Tele- density 77. 57%

Broadband Subscriber 13. 42 million

Current Scenario of South Africa:

The current scenario of South Africa's infrastructure mainly emphasis on transport. The role of Science, Technology, as well as Research in supporting the development of sustainable infrastructure for South Africa is discussed. There is an increased importance and focus given towards development of current poor state of infrastructure in South Africa and having less skilled professionals knowledge, engineering technologies and skilled human resources.

There has been the common concern on ageing status of infrastructure all around the globe. Lot of expenditure has been incurred in enhancing the entire infrastructure of South Africa. Some $40 billion in investment is carried on, which $8 billion is necessary for electricity. South Africa aims to invest R409 billion in building and refurbishing infrastructure i. e. power, roads, rail, housing, and bulk infrastructure.

South Africa is on the multibillion-rand development drive to treatment the skewed implementation of infrastructure during the apartheid years, also to meet up with the demands of an evergrowing economy and population. The country also hosted the 2010 Fifa Football World Cup, for which the government invested heavily in building and upgrading 10 world-class stadiums, and on the vitality, transport and telecoms infrastructure for massive event.

Following are a few of the major sectors:


In 2007 the National Energy Regulator of South Africa (Nersa) released the findings of any audit into 11 major electricity distributors in the country; this recommended that the federal government spend more than R400-million on refurbishing of infrastructure. The power regulator was forced to intervene carrying out a spate of power outages across the country in 2005, blamed mainly on the poor state of the country's electricity distribution infrastructure. Earlier in 2007, Eskom received a licence to create the first new coal-fired power station in the united states for more than 20 years, with a R66-billion project in Limpopo.

Coal and Carbon

Coal accounts for 75% of primary energy consumption in South Africa. The majority of this is employed to generate electricity, while a significant amount is channelled to synthetic fuel and petrochemical operations. Because of its dependence on coal-fired electricity, South Africa is among the top 15 emitters of greenhouse gases in the world. As the united states is a signatory to the Kyoto Protocol, there is a commitment to reducing its emissions. To the end Eskom is diversifying its energy sources, in conjunction with other parastatals such as the Central Energy Fund.


The current energy crunch may also be alleviated with a US$600-million (about R4-billion) diesel and petrol pipeline linking the Mozambican capital, Maputo, with South Africa. Operated by the firm Petroline, which is manipulated with a South African-Mozambican consortium, the pipeline is likely to be in operation by the finish of 2009.


In addition, the Department of Transport is to invest R2. 3-billion on the country's bus system, including the creation of the bus rapid transit system. Money is also being channelled into the South African National Roads Agency (R430-million), the South African Rail and Commuter Corporation (R1 316-million) and the Cross Border Road Transport Agency (R1-million). The department is also to spend some R65-million on monitoring and analysis specialists.


National operator Telkom has met and exceeded its roll-out targets of over 1. 6-million lines over the country's large transmission infrastructure, necessitated by the country's vast geographical area, and covering about 156-million circuit-kilometres. Digital microwave and optical fibre serve as the main transmission media. Although Telkom's monopoly has expired, its to provide basic services has simply been extended to include the next network operator, Neotel, and, in some instances, signal carrier.

Mobile communications operators Virgin Mobile, Vodacom, MTN and Cell C, donate to making the united states the fourth-fastest growing cellphone market in the world, a market that is expanding at a rate of 50% yearly. In September 2007, MTN announced plans to build a 5000km fibre-optic network covering the country's major centres within the next two years in order to cope with the increasing demand for bandwidth from its customers.



Africa is expiring great economical growth.

The African government is keen to facilitate private sector participation in infrastructure

Proliferating domestic and offshore infrastructure funds target the African infrastructure market


Chances of Natural disadvantage are there.

Distance between construction projects reduces business efficiency.

Lack of evidently defined processes and procedures for construction and its own management.


Population growth and a growing economy is raising the demand for an improved infrastructure

The government is seeking to attract private companies to invest in the infrastructure through public-private partnerships

Opportunities for greenfield projects across all infrastructure sub-sectors


Africa may end up being unable to deal with the raising population, posing a threat to economy

Bureaucracy and lack of transparency can be a threat to the five-year plan implementation

Projects delays due to slow approval processes and an inadequate system for compensation



Strengths employment and training opportunities in the field of construction.

Good structured national network facilitates the boom of construction industry.

Real estate development is on high which is attracting the focus of the industry towards construction.


A high degree of bureaucracy delays the absorption of funds and discourages projects

A insufficient domestic expertise

Shortage of skilled labor

Limited use of modern technological equipment

Limited long-term borrowing capability on the domestic banking sector


More flexible training delivery techniques are now available.

Historical cultural heritages like the TAZ MAHAL encourage and offer an innovative platform for the industry.

Financial supports like loan and insurance and growth in income of individuals is in support of construction industry.

Public sector projects through Public Private Partnerships provides further opportunities.


Threat Long-term market instability and uncertainty may damage the opportunities preventing the expansion of training and development facilities.

Current financial situation may have a detrimental effect on construction industry.

Political and security conditions in the region and Late legislative enforcement measures are always threats to any industry in India.


We overwhelmed in every humbleness and gratefulness to acknowledge our depth to all those people who have helped us to place these ideas, well above the amount of simplicity and into something concrete. We have tried our level best to complete the research up to the expectations.

Our overriding debt also goes to Lecturer Ms. Muneza Kagzi who often helped us and gave us support at critical junctures during this research.

We would also like to thank our Institute for providing us with this possibility to gain some practical knowledge and experience about various aspects required in carrying out this research. Finally yet importantly, we are thankful to the almighty our family that has provided us with the inspiration, courage and confidence to complete the study.

Tajinder Rewri

Jainisa Shah

Monaz Sathvawala

Kamini yadav

Krisha shah

Yash shukla



Sr. No.


Page Number


Information Technology In South Africa



Services In South Africa



Infrastructure In South Africa



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