JOHANNESBURG - A new study indicates Internet penetration in South Africa - Africa’s strongest economy - is low compared to other leading economies on the continent. A new study looks at why.
South Africa is the economic powerhouse on the African continent. Yet, Internet penetration here is not as high as it should be, because of the high cost of broadband and a lack of infrastructure.
With a population of around 50 million people, the country had just 8.5 million active Internet users in 2011. That is up from 6.8 million in the previous year. The growth - mainly attributed to smartphones - brings Internet penetration in South Africa to approximately 17 percent, according to a study commissioned by Google South Africa. It was carried out by Arthur Goldstuck, from World Wide Worx.
"The study that we conducted with Google was intended to measure the size of the Internet economy in South Africa," he said. "And, the figure we came up with was R59 billion [$7 billion ] as the value of that economy. And, we then equated it to a sector of the economy in terms of impact of GDP [gross domestic product]. And, the percentage we came up with, was 2 percent of GDP. So the Internet economy in SA represents 2 percent of South Africa’s GDP."
Despite the growth, South Africa lags behind other African countries, like Nigeria, which has the continent’s highest Internet penetration, at 29 percent. Goldstuck says Kenya and North African countries also are ahead of South Africa.
"There are two major differences between the countries that are ahead of South Africa and South Africa itself," he said. "The one is cell phone penetration and the use of the Internet on cell phones. So, if you look at Egypt and Nigeria in particular, it’s purely a function of their population size. So, as that population embraces cell phones and then the Internet on cell phones, it’s natural that their connectivity base would shoot ahead of SA’s. … The truth of the matter is that the quality of their Internet access is far poorer than your average South African user’s."
Goldstuck says governments’ attitudes towards the importance of Internet access, plays a big role.
"… particularly in countries like Morocco and Tunisia you see it at play, also Indian ocean islands like Mauritius, you see a far greater eagerness from regulators and government itself to have technologies rolled out, to bring communications to the widest possible range of people, as opposed to looking after vested interests. And, it’s those vested interests, or policy interests, that tend to hold us back. It becomes a political process, instead of a technology and licensing process," said Goldstuck.
Vital for small businesses
Goldstuck adds that one of the most significant findings of the study showed that 20 percent of formal, registered small and medium enterprises cannot exist without their websites.
"We measured the impact of Internet use on small businesses and we were able to show that something like 410,000 small businesses have got websites in SA. And, of those, 150,000 wouldn’t be able to exist as businesses, without those websites. So that gave us a very important insight into the impact of the Internet economy on small businesses and on employment in this country," he said.
With the importance of Internet access to small businesses highlighted, Goldstuck says a number of recommendations have been made to the South African government on how to possibly boost the country’s Internet economy.
"The single most important recommendation we’ve made to government is to speed up the regulatory process," he said.
Currently, just 9.6 percent of residents on the African continent are web-active, compared to 65 percent of those living in Europe.
The arrival of an undersea fiber-optic cable, which has about 11 landing points in Africa is expected to address some of Africans’ Internet access woes.