Cape Town - Although South Africa’s economy might rise by 1.6% this year, there is an urgent need for access to financial services to stimulate investments and ramp up economic growth.
This is according to the University of Stellenbosch’s lecturer in economics and statistics, Nthabiseng Moleko, who was speaking at a business knowledge seminar looking at what lies ahead for the country in economics, politics, education and technology in 2018.
Moleko said only 54% of people in townships held bank accounts, let alone access to secure services of banks. And although 66% of adults had access to financial services, the figure was much lower in townships and even worse in rural areas.
The banking system in South Africa was highly developed when compared with other countries and the bank assets were worth between R4 trillion and R8 trillion.
Moleko said lack of economic growth was not helping the fight against inequality.
Statistics by Statistics SA showed that more than 30 million South Africans lived on less than R1000 a month and one in three lived on less than R797.
The number of people dependent on social grants has increased from 3 million in 2000 to 17 million last year.
“This is not the case in more industrial provinces like the Western Cape or Gauteng where more than 70% of the population earn an income. But in other provinces like Limpopo and the Eastern Cape, we are seeing a high level of dependency that is becoming a standard.”
Moleko said the economy was driven by unsustainable levels of high consumption and public expenditure which depended on debt.
“There are two trajectories that South Africa can follow - diversify the economy, or we can stay the same."
Moleko said she cited mobile money as one of the big drivers of financial inclusion in Africa.
“Mobile money has been the predominant driving force for the expansion of financial inclusion in Africa and it can enhance both consumer and producer welfare.”
“Up to 83% of Africa’s population have access to a cellular phone; 34% of them use mobile money and are using the phones as a source of economic development. Using mobile phones will likely grow our economy, especially in sectors such as agriculture, if we use it cleverly,” Moleko said.
She said government expenditure was likely to rise in 2018 as would consumption.
In the education sphere, artificial intelligence was likely to begin with tutors engaging with students through wearable gadgets, said Doris Viljoen, of the Institute for Future Research.
“In future, there could also be a portfolio degree where a student does course modules through different institutions, and we could possibly see badges instead of certificates after completion of a course."