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Economic 360 for South Africa - Growth Prospects and Emerging Opportunities in the ICT Industry
Frost & Sullivan, Nov 2010, Pages: 91
South Africa is a democratic republic with a stable political system. The economic environment is forecast to remain stable, with policy focus on employment creation through growth and stability. The telecommunications networks in South Africa are most advanced in the region. Voice market penetration in mobile services has matured while broadband penetration is low and has high growth potential. Government development plans and a drive toward integrated e-Government projects are likely to be key drivers for the ICT market while reductions in the costs of communication, local loop unbundling and infrastructure projects expected to generate opportunities in fixed, mobile, broadband, and computer hardware and services markets.
Research Overview
After weathering the global economic downturn in 2008 and 2009, South Africa’s economy is on the mend and has shown modest recovery in early 2010. The country is expected to register gross domestic product (GDP) growth rates between 3 per cent and 4 per cent between 2011 and 2014. The sectors that are likely to grow the most are the manufacturing, finance, real estate and business services sectors. The economy will be shored up by the strengthening of the local manufacturing sector, due to the government’s commitment to development. It will also be bolstered by the relatively high levels of foreign direct investment (FDI) that has stimulated the finance, real estate and business services sectors as well as the recovery of the building and construction sector after the slowdown of 2009. The stable political climate bodes well for the South African economy, as does the Government’s development of fiscal and monetary policies to promote economic growth and reduce the high levels of unemployment.
The Government is looking to bolster the export sector, which has traditionally been a poor performer. There has been a significant change in the composition of exports and imports, as exports of the manufacturing sector are steadily eating into those of mining. This also indicates a decrease in the share of manufacturing imports and the strengthening of the manufacturing sector. The relatively high levels of FDI in the country have mitigated the effect of rising trade deficits on the current account. There has also been a shift in trading practices, with China emerging as the country’s major trading partner.
Meanwhile, new investments by key participants are anticipated to boost the information and communications technology (ICT) industry in 2010. Creation of and access to greater bandwidth will increase opportunities for ICT-related businesses, while policy intervention will enable a dip in the cost of communication and broadband. The broadband market in South Africa is still relatively small and there is significant potential for growth and market penetration. The ICT industry will get a leg up from the Government’s renewed commitment to e-government and various programmes, as they will create a plethora of opportunities for the ICT industry.
Frost & Sullivan’s Information and Communications Technology Country Industry Forecast service provides vital inputs for evaluating the attractiveness of a country and its ICT industry. Apart from enabling decision makers to assess the impact of non-market forces, it also helps in identifying new market opportunities. This service provides a strong base for preparing contingency plans. In addition, investors can assess industry-specific risk factors as well as conduct a more in-depth micro research.
Benefits
The following benefits are offered by this research:
Identifying New Market Opportunities
The future trends and developments in the South African ICT industry have been identified by taking into consideration the economic environment of the country. The analysis will prove greatly informative to industry participants and those with vested interests in the ICT industry in South Africa.
Understanding Future Industry Trends
This research service provides insights into economic developments and the trends in the ICT industry of South Africa. The economic climate, industry and infrastructure developments will give greater insights into the dynamics of the market in the forecast period.
Comprehending Policy and Economic Environment
An analysis of the dynamics of the economic growth in South Africa provides considerable insights into the economic parameters that will influence the ICT industry in the country. Industry performance is closely related to the level of economic growth and the structural dynamics of the economy are revealed to provide invaluable information.
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