(Ecofin Agency) - South African authorities are working on several strategic measures to promote inclusive digital transformation and reduce inequalities.

Authorities in South Africa are exploring ways to make smartphones more affordable for the population. The plan was revealed on Feb. 24 by Communications Minister Solly Malatsi during a meeting with the Global System for Mobile Communications Association (GSMA), major telecommunications players, the World Bank, other financial institutions, and business leaders.

On Monday, we’re bringing together industry leaders, financial institutions, and key stakeholders to accelerate access to affordable smart devices for all South Africans. We’re seeking solutions to reduce the cost to communicate through a whole-of-society approach. ?? pic.twitter.com/clWTecZ2tj

— SollyMalatsi (@SollyMalatsi) February 20, 2025

“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. Smartphones are no longer a luxury; they’ve become a necessity for participation in the modern economy,” Solly Malatsi said.

According to GSMA, the high price of smartphones in South Africa and across Africa is driven by various taxes. The association's report, The Mobile Economy Sub-Saharan Africa 2024, identifies this high cost as one of the biggest barriers to mobile internet adoption. GSMA has suggested that the government consider reducing taxes and duties and explore strategic partnerships to provide affordable devices.

Production and distribution costs also contribute to the high prices. However, eliminating taxes could reduce government revenue. Earlier this month, Rwanda ended its policy of exempting mobile phones and tech equipment from VAT to broaden its tax base.

Data from DataReportal shows that by early 2024, South Africa had 118.6 million active smartphones, with a penetration rate of 195.4%. The same source revealed that the country had 45.34 million internet users, representing a penetration rate of 74.7%.

Writing by Adoni Conrad Quenum; Editing by Feriol Bewa; Translation from French by Firmine AIZAN