30/08/2017 02:58 BST | Updated 30/08/2017 11:21 BST

The Poor Remain Locked Out Of The Digital Economy

In South Africa, income, education and location determine if you're going to become a part of the digital economy.

Ray Mwayera/ GroundUp

Income, education and location either open or shut the door to the Internet in South Africa today and this matters because the digital divide is just getting deeper.

In the last 12 months, 21 million South Africans [38 percent] accessed the internet at least once, and 8.4 million [40 percent] did this for less than five hours a week, according to the July report Internet Access in South Africa 2017.

No pay, no play: Majority can't afford meaningful internet access

South Africans earning R30,000 or more have an 82.4 percent chance of enjoying internet access, similar to their peers in developed economies. As income drops, the access rate plummets. Those earning between R14,000 and R18,000 have a 61.3 percent chance, those earning between R3,000 and R6,000, a 42 percent chance and for those earning less than R2,500, the penetration rate falls to below 30 percent.

"This is merely the most obvious divide, as one would expect access to be associated with income levels," said report author Arthur Goldstuck, MD of World Wide Worx.

"However, it highlights the extent to which lower income South Africans are frozen out of the internet economy."

"There are 29 million smartphones in the country, there are only 21 million people connected to the internet in SA. This disparity highlights the country's major challenge –- the fact nearly one in three people who own a smartphone can still not afford to connect to the Internet or possibly have no need to go online," explains DFA's chief strategy officer Reshaad Sha.

"For low-income users, internet access requires data costs to be taken off airtime, and those costs remain among the highest in the world."

To contextualise, about 60 percent of South Africa's employed population earn less than R5,000 per month. The 2011 census found that 79.6 percent of South Africa's population was African, and African household income averages at R1,876 per month. This economic and racial divide has a direct bearing on who can access the internet.

Bridging the affordability gap is more than simply a question of pricing.

More than just money

The Association for Affordable Internet, a global advocacy body agitating for lower data costs, found that meaningful and productive use of the internet results from a familiarity gained from using at least 1 gigabyte of data monthly. Further, this 1GB needs to be priced at 2 percent of the average income in order to be affordable.

But, the average wage is R5,000, and Telkom Mobile's two-year offer of R99 per 1GB is still running, Research ICT Africa points out. It appears that bridging the affordability gap is more than simply a question of pricing.

Poor education synonymous with poor access

Education levels also determine internet access, the report states. Of those with a Grade 12 or post-Grade 12 qualification, 55 percent and 71.6 percent have access respectively. For those with less than a Grade 11 and Grade 7, these figures are 40 percent and 20 percent in turn.

To put this in context, less than a third of SA has passed Grade 12.

Access improves in the Western Cape

The report puts the much-higher internet penetration experienced in the Western Cape region of 75 percent down to intensive digital activity in nearby towns like Stellenbosch and Somerset West, as well as a first-mover advantage by starting provincial connectivity initiatives early. This is evidenced by the advanced stage of the provincial fibre rollout and the research-informed actions of the officials involved. And the work is not over. The partners behind the province's fibre roll out, the regional government and Liquid Telecoms, have tasked organisations such as the Cape Digital Foundation, to make sure that the 384 free Wi-Fi zones the Western Cape government has created are used, a lot.

The City of Pretoria works with Project Isizwe who has built, operates and manages at least 780 free public Wi-Fi areas in the city. Despite this, the study reveals an internet penetration rate of only 55 percent in the city.

The value in the digital economy to meet and contribute to some of SA's existing challenges is mitigated by pitiful levels of regular access.

The state of the digital economy

Goldstuck expects South Africa's digital economy to be in line with predictions and in 2017 to contribute at least 2.5 percent of SA's GDP, "thanks to the massive investment in infrastructure by the MNOs and the explosion of fibre connectivity," he said.

This works out to R95.45 billion.

To reiterate: the value in the digital economy to meet and contribute to some of SA's existing challenges is mitigated by pitiful levels of regular access.

Just imagine

But, imagine for a moment, that the knowledge banks of online learning initiatives such as Hello Tutor or GetSmarter were within the grasp of those struggling to complete their schooling, or who wanted to re-skill themselves to compete for higher-paying jobs or start a business.

The advantage of internet access for a national economy is found when people are able to transfer, gather and improve large volumes of information. The difference in income between countries that export raw materials, or manufactured goods from those materials is commonly acknowledged and the same principle applies.

Local economic conditions are going from bad to worse. Making the internet more readily available to everyone has never been more urgent.

This article was first published on Fin24 here.