Financial Intermediation, Real Estate and Business Services

To be competitive in a globalize economy one needs to be innovative, creative, able to communicate effectively and move goods efficiently, all of which embrace service activities. Sub-sectors include telecommunication, transportation and logistics, finance, insurance, information services, education, construction and engineering services, tourism and travel related services. Community and social services sectors, some of which are provided by government and others initiated by communities and NGOs also fall within this category. In addition, these have been the sectors in which significant job creation has taken place in recent years. Of importance is that many other service activities in our society straddle both the first and second economies.

The annual growth in the financial intermediation, insurance, real-estate and business services sector in 2004 amounted to about 7%. The importance of the services sector in the country's economy has grown to such an extent that the sector has become a leading contributor to the GDP. KwaZulu-Natal has experienced a massive boom in the residential property market with prices (of an average house) increasing by 61% in nominal terms from 2001 to the second quarter of 2007. The second quarter of 2009 saw a 4.9% decline nominal housing price index, offering new market entrants an affordable floor.

The demand for financial services continued to increase. South Africa's excellent financial services sector is supported by a sound regulatory and legal framework. A choice of domestic and foreign institutions, provide assorted services - commercial, retail and merchant banking, mortgage lending, insurance and investment.

The importance and potential of the information technology sector - from call centres to conducting software development cannot be overemphasized. South Africa lays claim to the largest and most developed telecommunications network in Africa; from fixed line, wireless, satellite to cellular networks. However, there is room for this industry to grow and improve through the involvement of new players in the industry and the licensing of an alternative to Telkom's present monopoly should stir up the industry.

Durban is intent on attracting international contact centre and business process outsourcing operations to the city by offering a skilled workforce and state-of-the-art infrastructure. A new company, KZNonSource, has been established as a result of the strategic partnership to drive the services sector and position the Province as a location for outsourcing.

Sentech has announced plans to rollout Digital Terrestrial Television (DTT) in time for the 2010 World Cup. The upgrade is expected to cost about R1-billion over the next five years.  DTT is a digital technology that provides a greater number of channels and better quality of pictures and sound. The company is optimistic that it will play a major role in the 2010 World Cup by ensuring that South Africa's analogue broadcasting infrastructure is upgraded to a digital-ready terrestrial system.