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All queries on rights and licenses should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; email: [email protected]. i TABLE OF CONTENTS About the DE4A ................................................................................................................................ v Acknowledgements ....................................................................................................................... viii List of Acronyms .............................................................................................................................. ix Executive Summary ......................................................................................................................... xi 1.Introduction ................................................................................................................................. 1 2.Digital Infrastructure .................................................................................................................... 5 2.1. BACKGROUND AND IMPORTANCE OF DIGITAL INFRASTRUCTURE ...................................................... 5 2.2. DIAGNOSTIC FINDINGS: CURRENT STATE OF DIGITAL INFRASTRUCTURE ............................................ 7 2.2.1. Analysis of the Broadband Market ........................................................................... 7 2.2.2. First Mile: South Africa’s International Connectivity .............................................. 11 2.2.3. Middle Mile: National Backbone Infrastructure ..................................................... 11 2.2.4. Last Mile: Reaching the End-Users ......................................................................... 12 2.2.5. Invisible Mile: Key Policy and Regulatory Issues..................................................... 14 2.3. RECOMMENDATIONS & NEXT STEPS ....................................................................................... 15 3. Public Digital Platforms ......................................................................................................... 17 3.1. BACKGROUND AND IMPORTANCE OF PUBLIC SECTOR DIGITAL PLATFORMS ..................................... 17 3.2. DIAGNOSTIC FINDINGS: CURRENT STATE OF PUBLIC DIGITAL PLATFORMS ....................................... 18 3.2.1. Institutional setup for e-government development ............................................... 18 3.2.2. Data policy and frameworks ................................................................................... 20 3.2.3. Interoperability, Back-office systems, and shared services.................................... 22 3.2.4. Digital Identity ......................................................................................................... 23 3.2.5. Digital Services ........................................................................................................ 25 3.3. RECOMMENDATIONS AND NEXT STEPS .................................................................................... 26 4. Digital Financial Services ....................................................................................................... 28 4.1. BACKGROUND AND IMPORTANCE OF DIGITAL FINANCIAL SERVICES ................................................ 28 4.2. DIAGNOSTIC FINDINGS: CURRENT STATE OF DIGITAL FINANCIAL SERVICES ...................................... 29 4.2.1. Role of Banks in provision of DFS............................................................................ 30 4.2.2. Role of Fintech and non-banks in DFS .................................................................... 31 4.2.3. Policy and Regulatory Environment........................................................................ 32 4.2.4. Infrastructure: Retail Payments Infrastructure ...................................................... 35 ii 4.2.5. Infrastructure: Credit Infrastructure ....................................................................... 35 4.2.6. Leveraging recurrent payments to increase usage of DFS ......................................... 36 4.3. RECOMMENDATIONS AND NEXT STEPS .................................................................................... 37 4. Digital Entrepreneurship ........................................................................................................... 39 4.1. BACKGROUND AND IMPORTANCE OF DIGITAL ENTREPRENEURSHIP ................................................ 39 4.2. DIAGNOSTICS FINDINGS: CURRENT STATE OF DIGITAL ENTREPRENEURSHIP ..................................... 40 4.2.1. Policy Framework and Business Environment for Digital Entrepreneurs ............... 40 4.2.2. Support Organizations ............................................................................................ 42 4.2.3. Financial Capital ...................................................................................................... 42 4.2.4. Markets ................................................................................................................... 44 4.2.5. Entrepreneurship Culture and Talent ..................................................................... 45 4.3. RECOMMENDATIONS AND NEXT STEPS .................................................................................... 46 5. Digital Skills ............................................................................................................................... 48 6.1. BACKGROUND AND IMPORTANCE OF DIGITAL SKILLS ................................................................... 48 6.2. DIAGNOSTIC FINDINGS: CURRENT STATE OF DIGITAL SKILLS ......................................................... 49 6.2.1. Digital Literacy......................................................................................................... 50 6.2.2. Professional Digital Skills......................................................................................... 50 6.2.3. e-Business Skills ...................................................................................................... 51 6.3. RECOMMENDATIONS AND NEXT STEPS .................................................................................... 51 7. Conclusion: A Way Forward ...................................................................................................... 52 Annex 1: Table Of Recommendations .......................................................................................... 52 Annex 2: References ....................................................................................................................