Creating a vibrant SA economy

In my earlier posts I explored the key things that the South African government must excel at in order to make our country a success story in Africa, on sustainable basis. I explored what President Zuma’s government should consider improving as this relates to the delivery of education, housing, water and electricity services.

Assuming that the above basic services are addressed adequately, government still needs to put measures in place to facilitate for a vibrant and fact-growing economy. Conventional wisdom says that any vibrant economy requires the following things to be delivered at “world-class” standard, in order to facilitate for economic success:

a) An Integrated Transportation Infrastructure

b) Reliable Energy Supply

c) An Excellent Health System

d) A liberal financial regime

e) Widespread availability of ICT Services

In my next posts, I shall be exploring each of the above in more details, in an attempt to identify ideas which the SA government should explore to help make our economy more, vibrant. To be sure, SA’s economy is the biggest on the African continent, accounting for 30% of Africa’s GDP in nominal terms. More can and must be done to make South Africa more productive.

Our Politicians must show willingness to create effective government!!

Government for the People: access to Housing

According to the Department of Human Settlements, 2,3 million low-cost houses have been built since 1994 thereby providing housing for more than 11 million people. While this figure is impressive, the challenge remains daunting, given that there are still at least 12 million more people in need of housing. Many of these people currently live in informal settlements (make-shift structures or shacks)

According to Stats SA’s General Household Study, 13% of households live in informal settlements, this the same number as 2002. The year 2005 saw the number of households living in informal settlements at it’s highest since 2002, at 15.7%. Interestingly, it is the highly urbanized provinces of Western Cape, North West and Gauteng which have the highest informal dwellings, above the national average of 13%. During the time of the study, 18.9% of all households were living in state-subsidized house.

Problem

More and more people are migrating to major cities to seek employment and for those who do not have relatives, many of them who come seeking employment end up living in informal settlements, some temporarily and others permanently. Our government continues to rely on traditional methods of building houses for the poor, and these brick-and-mortar methods are not the easiest and quickest to build. The high rate of unemployment means that more and more people find themselves homeless and so as the unemployment rate increases, so too does the proportion of informal settlements. SA’s unemployment rate as at Q3 of 2011 was an alarming 25%.

The Ideas: Solutions

The thing about housing is that, executed correctly it could serve as a silver bullet to resolve broad social challenges. A good house should have piped water, electricity either on or off grid. A house turned into a home could also provide necessary stability for a child to have a balanced up-bringing. 

a) Find cheaper and environmentally-friendly alternative methods of building state-subsidised houses. SA is one of the biggest steel-producing countries in the world and steel is strong, stable and relative cheap. Government should invest money in the development of a building methods which incorporates steel a amin compoment of the building structure. A company in the US has developed a steel panel buidling methods, with great success.

b) Build houses that cost no more than 50% of GDP per capita to build. In South Africa's case, this would be a house costing no more than R49,000 to build.

Our Politicians must show willingness to create effective government!!

Cabinet holds January Lekgotla (English)

Cabinet holds January Lekgotla (English):

'via Blog this'

The Dark Continent

Africa at Night: Photo courtesy of Next Nature.net

Government for the People: access to Electricity

Power and electricity make the world go round and those without it are doomed to live in “darkness”. According to the International Energy Agency (IEA) as at 2008, more than 1.5 billion (or 21%) of the world population did not have access to reliable and consistent supply to electricity, in whatever form. Of the 1.5 billion people without electricity, 40% are in Sub-Sahara Africa. This puts the electrification rate in Sub-Sahara Africa at a shocking 29%, with those in rural Africa being the worst hit. When it comes to South Africa, the picture is a lot brighter (pun intended).

According to the most recent General Household Survey as carried out by Stats SA in 2010, 71.1% of households in South Africa had access to electricity from the Eskom grid. For those households with no access to electricity, wood and paraffin was their main source of energy. Limpopo Province is the province with the lowest rate of access to electricity, at 47.1%, with 46.6% of households in that province using wood as their main source of energy. The Stats SA survey clearly reveals that, those provinces with a majority of the population living in rural or peri-urban areas have lower access to electricity. Provinces with the highest number of households situated in urban areas such as, Gauteng, Free State and the Western Cape, have an electrification rate in excess of 80%. Limited access to electricity means that those without electricity people, have to go to great lengths to perform basic tasks and functions such as, boiling of water, cooking of food and charging of cellphones. South Africa’s electrification rate of 71.1% is just below the global rate of 78.2%.

Problem

Wind Energy Farm

In many parts of Africa, poor access to electricity, according to a study by the World Bank, is due to factors such as: shortage of electricity generation capacity; lack of incentives to supply electricity to rural and peri-urban households; relatively higher costs of supplying to rural and peri-ruban areas due to low population density in those areas and weak implementation capacity, especially as this relates to rural and peri-urban areas.

The overall cost of electricity is one other major barrier to access, however, South Africa’s electricity is cheap relative to most countries, but still expensive for the poor.

The Ideas: Solutions

Develop clear on-grid and off-grid power strategies.

On-Grid: Going Greener

a) Many parts of South Africa, especially in the Western and Eastern Cape have windy conditions throughout most of the year. This means that over and above solar, these areas should be focusing more on wind as a source of energy. Eskom ought to be building more wind energy farms, to supplement the existing coal and nuclear sources.

Off-Grid: Going Greener

a) South Africa is blessed with sunny weather, even during the winter months, therefore the focus should be in intensifying the use of solar power as the main source of energy, especially for low cost housing. Not only will this reduce SA’s carbon footprint it would also ensure lower cost of electrification for poor households. Government ought to intensify the programme of including solar panels on every low cost house built. Currently solar power is used largely to heat water, however, imagine if each low cost home was equipped with a battery that could store solar-generated power such that the battery becomes the only source of power not only to heat water but to power up each low cost home.

Our Politicians must show willingness to create effective government!!

Government for the people: access to Education

According to the annual 2010 General Household Survey carried out by Stats SA, among people who are 20 years and older, the percentage of those with a matric certificate as their highest level of education rose from 21.5% in 2002 to 26.2% in 2010. In addition, people of this age group with a tertiary qualification also increased from 9.2% to 11.2% over the same period. Viewed differently, this figure indicates that there are more than 80% of those 20 years and older with no tertiary qualifications. What is encouraging is that the number of people aged 5 years and older who attend school without paying fees has gone up from 0.7% in 2002 to 54.6% in 2010. This suggests that there has been a greater opportunity for access to education for many of the poor during this period. South Africa’s spend on public education is just over 5% of GDP, which is a substantial investment and puts SA among the countries with the highest spend on public education. However, a large portion of this expenditure is on personnel while little is being invested in capital and long-term public education initiatives. By all measures, South Africa is currently tracking way behind its own Millennium Development Goals targets as this relates to education.

Problem

For SA to increase the number of people with a tertiary qualification, there must be an increase in the number people who pass their matric. According to Stats SA, there are three main reasons, among many, which contribute towards the low matriculation rate. The first being lack of text books, which in itself limits proper learning. Secondly, fees are said to be too high, indeed in some households, children have had to take on the role bread-winner, which means education either takes a back seat or in extreme circumstances, it is abandoned completely. Lastly and perhaps very alarmingly, is teacher absenteeism due mainly to strikes and this suggests that teachers in public schools feel they are not paid enough.

The Ideas: Solutions

a) Implement an incentive scheme to encourage both higher enrolment and excellent results. For example, every child in a public school who completes matric, having taken certain subjects, to receive a once-off grant. Every child in a public school who passes matric with a distinction to receive a once-off grant. Offer free tertiary education for students who enrol for specific engineering and natural science degrees. Or a combination of the two i.e. incentives and free education. To be funded by proceeds from some of the sin taxes.

b) Use technology in the classroom to compliment and supplement the teacher and the text books. The advantage of technology is that it allows for the creation of a virtual reality (especially when it comes to gaming). Which means for certain subjects, learners could engage in simulated scenario’s to allow for better learning. Technology could further add more context to the process of learning through the use of video, sound and pictures.

c) Drive towards a knowledge economy with a focus on subjects that will allow learners to excel in engineering as well as the natural sciences when they reach university.

Every year on 8 September, the world celebrates "World Literacy Day" 

Our Politicians must show willingness to create effective government!!