Communications minister Solly Malatsi said on Monday that the availability of affordable smart devices is the gateway to providing “meaningful access” to digital tools to all South Africans so they can participate in and benefit from the digital economy.
Speaking at an affordable smart device workshop hosted by the department of communications & digital technologies on Monday, Malatsi said the digital economy can act as a “great equaliser” by providing poorer South Africans with access to opportunities, tools and skills that empower them to change their economic standing for the better.
But this is not possible if they are priced out of access, the minister said.
“Affordable smart devices are the key to unlocking digital transformation. It is estimated that the digital economy contributes about 19% of South Africa’s GDP, yet millions are excluded – and not because broadband is not available,” Malatsi told industry stakeholders.
“Without a device connectivity is meaningless, and without access the promise of digital transformation is not fulfilled.”
The workshop aims to bring together industry stakeholders including mobile operators, fintechs, original equipment manufacturers in the mobile devices space, trade associations and other industry players to drive a collaborative approach to solving the device affordability problem.
Notable guests included representatives from mobile industry association the GSMA as well as the World Bank.
Ad valorem taxes
GSMA senior policy manager for sub-Saharan Africa Nomonde Gongxeka-Seopa told the gathering that ad valorem taxes levied on imported smartphones and other communication devices are one of the major factors contributing to device costs in Africa.
Malatsi in July last year announced his intention to meet with national treasury to discuss the removal of the ad valorem or “luxury goods” taxes on smartphones in a drive to make them more affordable for poorer South Africans. Malatsi on Monday repeated a statement he made at the time, emphasising that the view that smartphones are a luxury good is outdated considering how they have become a necessity for participation in the modern economy.
Read: Malatsi to meet with treasury over smartphone taxes
But luxury goods taxes are not the only barriers to affordability. According to Gonxeka-Seopa, the removal of ad valorem taxes will not go far enough. There are affordability barriers over and above the cost of device acquisition that limit accessibility for many.
GSMA research shows that entry-level devices at $50/handset cost around 99% of average monthly income for around 20% of the poorest households in sub-Saharan Africa, meaning the overall cost is generally too high for households to invest in without some kind of external support. Bringing this cost down to $20/handset will ensure access for around 80% of South Africa’s population, the GSMA said.
Other factors affecting affordability include the cost of charging, occasional repairs, and the airtime and data that make the device useful.
“Global operators, governments and other stakeholders must hold hands in a collaborative manner to jointly come up with initiatives that will bring the cost to communicate down. This includes the involvement of development finance institutions to support handset subsidies and mobile network operators, which need to reduce [the cost of] their bundles,” said Gonxeka-Seopa.
Malatsi said he wants all South Africans to have “meaningful internet access” by 2029. This means the majority of South Africans must be able to connect at home, with all schools being equipped for digital learning.
Read: Africa has a feature phone problem
“This administration is committed to ensuring that digital transformation translates into tangible benefits for all South Africans, but we also recognise that government cannot achieve this on its own. Real progress will come from partnerships between industry, civil society and international stakeholders,” he said. – © 2025 NewsCentral Media
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