The Internet: A little Ingenuity Is All You Need

By: Fanele Chester (Communications Intern)

The Africa Attractiveness Report 2011 was published by Ernst & Young, in collaboration with the Oxford Economics, in April 2011. The objective of this study was to document was business leaders have to say about Africas growth story, the latest foreign direct investment trends and the regions growth potential. One of the key findings from the study that foreign direct investment (FDI) in Africa is moving away from extractive activities and diversifying into other, service based ones. In addition, these FDI flows are projected to grow to US$150 billion in 2015, in line with improving global perceptions and Africans own confidence in the regions potential. That being said, Africa still attracts only 5% of global FDI flows, although the region enjoys one of the highest returns to investment in the world, and has an economic growth rate surpassed only by Asia. The main reason behind this low figure, and a challenge raised by investors in the region, is the lack of high quality human resource which includes skilled workers with extensive experience and talent in industry technology, due to poor investment in education and training. Three quarters of FDI in Africa between 2003 and 2010 was concentrated in only ten countries, with South Africa receiving 15% of all investment. Apart from being one of the most well known countries, has a large market (US$360 bn compared to >US$10 bn for Swaziland) and with the best developed economy, South Africa has shown the most political reform, macroeconomic stability and social development. On the other hand, Swaziland has one of the last telecommunications monopolies in the world. This is a significant challenge because the areas FDI is diversifying into, namely business and financial services, consumer products, tourism, construction and telecommunications all use innovative technologies that are increasingly internet based. The internet revolution, however, depends on the modernization of traditional infrastructure, specifically, telecoms. In other words, the internet and economic growth are directly and positively related due to productivity gains linked to information technologies. Among other economic benefits, the internet offers opportunities to expand into domestic and foreign markets, means for innovative product development, and the rapid deployment of gamechanging ideas. It is no surprise that the local financial sector is one of the most developed sectors in the country, with our soundness of banks rankings at 44 according to the World Economic Forum. The evidence is clear in the success of internet banking in the country, as well as the development and implementation of new services such as money transfer between cellphones. The merge of technology and communications, with the internet used as an innovative tool, has been successful in increasing economic gains across industries.

The same is true for Africa in general: the financial services sector share of new FDI projects between 2003 and 2010 increased from 11% to 16%, where coal, oil and natural gas decreased from 17% to 5% in the same period. Communications increased from 2% to 8%, and business services from 4% to 8%. These statistics are not surprising: as a huge internet consumer, the economic advantages of the internet were obvious, and came at a very low cost, free to be exact. Once the basic infrastructure was secured, in the form of a laptop, establishing an online presence through a blog Fashion Et Al on www.fanelelove.com was easy. Fashion Et Al is hosted on Blogger, a free Google platform for blogs. A blog (web log) is an online platform which allows one to be the writer, editor, and publisher of information. When a post is created and published on Fashion Et Al, within seconds it immediately updates on Twitter, Facebook, as well as the blogs fan page on Facebook, and on a separate blog on Tumblr (another hosting site for blogs). The fan page automatically retweets this same message on my Twitter. Finally, a Networked Blogs application enabled on my Facebook account extracts the same blog and posts it on the wall. In the end, one blog post is circulated on social media three times on Twitter reaching about 70 followers each time, four times on Facebook reaching about 1600 friends and 400 fans each time, and once on Tumblr reaching 7 followers. This is excluding the 60 individuals who have directly subscribed on the blog itself via the Gmail accounts, who get updates either through email or on their Google Reader. All of this mileage is completely free! The beautiful thing about this interconnectivity is that it was engineered through the authors own innovation. The linkages between all the social media sites are not default settings on the template provided by Google. In Swaziland, when we talk about communications, advertising and marketing mileage, the most economical and effective tool is the radio, followed by print media and television. The internet does not play a significant role in economic landscape of the country, and contributes a negligible percentage in the total economic growth. This is despite the fact that the United Nations, in its Millennium Development Goals, lists internet penetration as a key metric in efforts to reduce poverty and encourage national development. In conclusion, the benefits of the internet, especially for developing countries, and in particular for Swaziland as we face an economic crisis, are unmistakable and must be taken into consideration as we forge forward with a new strategy for growth. One example includes creating and implementing an e-government online system of registering companies by, effectively removing duplicated costs such as the separate costs for reserving and registering a company, which would centralize and computerize all the information and documents required. This would significantly increase the amount of activity in the private sector, by both foreign investors and local entrepreneurs.

List of references available upon request. Please email Fanele Chester at fanelec@businessswaziland.com. Produced by the Communications Office at the Federation of Swaziland Employers & Chamber of Commerce.