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South Africa

South Africa. An IT Profile. The Rainbow Nation. The People. Census figures are widely believed to be inflated; latest figure is 44,000,000 and falling because of HIV-AIDS. Median age is about 24 . (US=36) The death rate is 22/1000 (US=8/1000) 79% classified themselves as African

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South Africa

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  1. South Africa An IT Profile

  2. The Rainbow Nation

  3. The People Census figures are widely believed to be inflated; latest figure is 44,000,000 and falling because of HIV-AIDS. Median age is about 24. (US=36) The death rate is 22/1000 (US=8/1000) • 79% classified themselves as African • 10% as white • 9% as coloured, and • 2.5% as Indian/Asian. White and coloured population proportions are falling and have been since 1990.

  4. Ethnic Groups (High heterogenity implies potential for conflict) • Nguni people (2/3 of population) • Sotho-Tswana people, who include the Southern, Northern and Western Sotho (Tswana); • Tsonga; • the Venda (far northeast) • Two white tribes: Afrikaners; English • Khoe and San (collectively the Khoisan), the original inhabitants

  5. Languages • Over 30 languages are spoken commonly in South Africa • 11 Official languages; English WIDELY spoken and used for business, gov’t. Regionally languages are usually English+ (Afrikaans+) local African language Afrikaans (13%), English (8%), IsiNdebele, IsiXhosa (18%), IsiZulu (24%), Sepedi, Sesotho, Setswana, SiSwati, Tshivenda and Xitsonga.

  6. Geography • Half the population is urbanized; large country • Capitals are Cape Town (legislative), Pretoria (executive) and Blumfontein (judicial). • Major ports are Durban, Port Elizabeth and Cape Town • Good road network linking major centres (50,000 miles); many rural areas are quite isolated. • Largest city is Johannesburg (5 Million)

  7. Geography Africa Botswana Zimbabwe Namibia Pretoria Equator Mozambique Johannesburg Swazi land =Texas x 2 Tropic of Capricorn Atlantic Ocean Indian Ocean Leso- tu Cape Town CIA Factbook

  8. History (much longer than you need to do) • Inhabited by Khoi (hunter-gatherers) and San (herders) people for thousands of years until 1500s • First Europeans landed on west coast were Portugese sailors; British put the flag up first; Dutch had first permanent settlement Kaapstad in early 1600s. • By 1700 Cape Town was a thriving way-station between Holland and “Dutch” east Indies

  9. History-2 • Dutch and later English settlers decimated Khoisan people, reducing them to slavery* • Nguni (Zulu) people under leader Shaka created military state in north and east in early 1700s and put pressure on others living nearby to join or leave. • At same time, Dutch were leaving Cape Colony for freer locales northeast * Along with other slaves brought in from Indonesia and Madagascar, this mass of people formed what was called the “Cape Coloured” group, ancestors of today’s “Coloured” people.

  10. History-3 • This created inevitable and incessant conflict not unlike American experience between “Indians” and settlers. • Many wars were fought between Dutch/English and indigenous people; Europeans eventually conquered all. • By 1800s, English took over Cape Colony and formed new colony of Natal around Durban.

  11. History-4 • This also created conflict with Dutch-speaking settlers (“Afrikaners”) who left to form two new states in north and east (Orange Free State and Transvaal) • When diamonds and gold were discovered at Cape/OFS/Transvaal border, the English, under John Cecil Rhodes, attempted to annex the Afrikaner republics

  12. History-5 • This resulted in the Boer wars (1900). • The English won and established a unified country (Union of South Africa) in 1910. • In 1948, Afrikaner party (Nationals or “Nats”) won a majority and began installing Apartheid • Under Apartheid, all non-whites lost almost all citizenship privileges and rights • This culminated in the establishment of bantustans in the 1970s and 1980s.

  13. Government • Apartheid ended around 1990 and a fully democratic government was elected in 1994 and reelected in 1999 and 2004. • Current parties: • ANC: 70% of voters (mostly, but not exclusively African) support this party • DP: 12% of voters (mostly white, but not exclusively) support this party • IFP: 7% of voters (mostly Zulu)

  14. Government • Country is organized into provinces: Western Cape, Northern, Northwest, Northern Cape, Free State, Kwa Zulu Natal, Mpumalanga, Eastern Cape, Gauteng • ANC controls all provinces and national gov’t • National party appoints provincial leaders • Constitution is a model of democracy • Government is advised by Canadian gov’t and tends to look a bit like Canada

  15. Politics • ANC is a coalition of three groups, including SACP, COSATU and ANC proper • Government tends to be neo-liberal recently, but also interventionist • IT is high on the agenda, but government has little money and a weak taxation system. • ZA sees itself as a political, cultural and social leader of Africa. • VERY free press.

  16. Natural Resources • CIA Fact Book: gold, chromium, antimony, coal, iron ore, manganese, nickel, phosphates, tin, uranium, gem diamonds, platinum, copper, vanadium, salt, natural gas • SA sits atop one of the richest lodes of mineral resources in the world.

  17. Challenges • AIDS. Life expectancy is about 43 years; in places HIV infection rate is 20-25%. (US<1%) Population is actually shrinking by 0.5% pa (US increasing by 1% pa) • Literacy is officially about 87%, but effective literacy rate is less than 50%. Many speak, read and write a language with limited usefulness outside ethnic areas.

  18. Economy • Country is “organized” along economic lines. Whites control 90% of wealth, but non-whites (90% of population) have 50% of spending power. GDP/capita is $12,000 (US=$24,000). Gini is 59* Inflation runs at about 5% annually. Currency (Rand) is about 6.55 to the USD. The poor are VERY poor. • Industry is European in nature, with strong export orientation. UK, US are major markets. Malaysia is strong partner, owning many businesses. • Strongest sectors are agriculture and mining * 1995 data. This might still be an accurate figure, though

  19. Economy • Unemployment is reported at 26% but is really much higher, approaching 50%, mostly among Africans. Serious under-education and access problems. • Affirmative Action (Employment Equity) laws are strong, but are not uniformly enforced • There is evidence of overregulation and little chance for innovation. • Electricity, gasoline are among cheapest on earth. • Main trading partners are EU, US, and Japan • Growth in GDPPC is about 4% annually.

  20. IT • Weak IT source sector, but IT used extensively in business • Most IT is imported and tailored • No indigenous IT design industry • ZA has 90% of African telephone lines • Telephone is monopoly. Gov’t even owns minority interest in two of three cellular providers and 38% of the major phone company (AT&T owns 15%), which owns in turn 50% of the major cell-phone provider. • IT and telcoms costs are very high. ALL charges are by-the-second; there are NO flat-rate charges*. All cell calls are long distance. A flat-rate charge is R8 (about $1.25) for unlimited calling at night. But if line drops, as it frequently does, the charge to set it up again is again R8.

  21. IT-2 • English is first language to only 8% of population, understood by maybe 30%. • No computer components are locally manufactured; all items are ultimately imported • Current cost of a notebook PC is about R10,000 or about $1600 for entry-level • IT is taught in most universities, but demand for skills is very high. There is lots of emigration of skills from ZA, especially among whites and middle class blacks. • Strongest user sector is financial services. Banks are very much up to date, but insurance firms and major businesses are moving off-shore.

  22. IT-3 • E-commerce infrastructure is well supplied: good banking, excellent communications, good laws in place, well-developed stock market, strong private sector. • Historically the government intervenes in everything; strong interest in IT. • Brain drain is immense.

  23. Communication • At least 25,000,000 phones; most new growth is in cellular technology (approx 20 million cellphones). • Extensive radio, television coverage; mixed public/private model (a la Canada) • 200 ISPs • 500,000 Internet Hosts and growing • At least 4,000,000 internet users and growing • Internet in school is highly touted, but poorly supported, as are schools in general.

  24. Infrastructure • First class road networks • Pipelines, rail, air are modern and available • World-class harbors, airports • IT thoroughly integrated into all aspects of infrastructure. • Some parts of the country, like the US, are relatively inaccessible. Urban areas are well served.

  25. Education • Literacy rates are highest in Africa • First-class public universities, available officially to all, but serving elites; approx. 30 universities and technikons (technical universities and colleges); national planning. Some private Univs. • Public education in large cities is world class, exceeds private school standards in US • University system modeled on British one • Information systems curricula are modern • Access to university is by merit with some affirmative action policies. Among Africans, post-secondary education rates are very low.

  26. Links and Predictions http://www.gov.za/sa_overview/index.html http://www.southafrica.co.za/ http://www.ananzi.co.za E-commerce lags the US; penetration is less than 5% of population doing e-commerce as consumers. Businesses struggle for skills. There are many gov’t studies, but until costs come down, it is unlikely that e-commerce will benefit many entrepreneurs.

  27. Investment Opportunities and Challenges • Universities are not sources of IT excellence but could be • Labor costs are relatively high for third world, because trained labor pool is highly skilled and the remainder have few skills at all. • Brain drain means that staffing could be a problem. • IT sourcing is not going to be profitable in the short term. • Heavy usage of IT means that this is a good market for IT goods and services. Financial services sector is one of the world’s strongest, but participation rates are low.

  28. Specific Proposals • Teleservices: Call centers, help desks, advice lines, homework. While labor rates are higher than the rest of Africa, the education of those who have education is very good. • African tourism applications: An ideal place to begin African tours

  29. Some ZA Websites • Standard Bank • Telkom • One-stop Internet Shopping • E-Commerce Advice Magazine

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