Budget 2023
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Budget speech pays little attention to broadband

Cape Town - For the second year in a row, the National Budge has provided few details on a project to connect municipalities to broadband technology.

Finance Minister Pravin Gordhan delivered the 2016 National Budget Speech in Parliament on Wednesday in Cape Town.

But, like former minister Nhlanhla Nene, Gordhan’s speech also had little to say on broadband expenditure as he only briefly addressed government’s plan to connect eight municipalities to broadband.

Over the mini budget period "R1.6bn is allocated to the SA Connect broadband programme to support access in remote areas and of schools, healthcare facilities and government institutions”, said Gordhan.

In 2015, Nene said that “R1.1bn is allocated for broadband connectivity in government institutions and schools”.

Analysts react

The successive budget speeches have provided few details on SA Connect.

Adrian Schofield - director and vice-president of IITPSA (Institute of Information Technology Professionals South Africa) - told Fin24 that it’s no surprise government has paid little attention to broadband.

“In spite of the consistent input from policy advisers that IT in all its forms is an essential ingredient of a successful economy, the ANC government has never paid more than lip service to implementing technology to improve efficiency and service delivery,” said Schofield.

“Where the government does implement - or inhibit - the use of technology, it is usually as a control mechanism, rather than to facilitate growth and development.

“Such initiatives as have surfaced have generally done so in spite of policy rather than because of it,” he said.

Meanwhile, Mark Walker - who is the associate vice-president for the International Data Corporation in sub-Saharan Africa - told Fin24 that R1.6bn may not sufficiently cover SA Connect's cost requirements.

"The question that arises is the quantum of money that has been put aside to roll out broadband is very small," Walker told Fin24.

"Is government waiting for the private sector to take up these projects?" Walker asked.

Questions over SA Connect

Earlier this month, the Department of Telecommunications and Postal Services told Fin24 that a lead agent for the SA Connect project had not yet been chosen.

The department said this despite President Jacob Zuma having said in his State of the Nation Address last year that Telkom would be the lead agent for this project.

A Bloomberg report earlier this month also said that Telkom is close to winning the deal, prompting questions from critics about why an open tender process had not been launched. Telkom further declined to comment on the matter.

At the State of the Nation Address for 2016, Zuma said that South Africa planned to spend R740m on the first phase of SA Connect.

“Government will fast track the implementation of the first phase of broadband roll-out to connect more than 5 000 government facilities in eight district municipalities over a three-year period,” Zuma said.

* Visit our Budget Special for all the budget news and in-depth analysis.

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