Concerns Were Raised That The Role Of Connecting Government And Government Institutions Should Be Played By The Private Sector.

Communications minister Stella Ndabeni-Abrahams Regulations has acknowledged some of the criticisms levelled against her department’s draft data and cloud policy. The policy seeks to ‘strengthen the capacity’ of the state to deliver services to its citizens, ensure informed policy development based on data analytics, as well as promote South Africa’s data sovereignty and the security thereof, the department said.

This will include the consolidation of existing data-focused state-owned enterprises such as Sentech and Broadband Infraco, as well as the establishment of a new state infrastructure company, it said. This will be known as the State Digital Infrastructure Company (SDIC), and it will have access to the excess capacity of government-funded ICT infrastructure through Eskom, Sanral, Transnet, Prasa, and the South African National Research Network.

The draft policy also states that government intends to build a High-Performance Computing and Data Processing Centre (HPCDPC) which will include processing, data facilities, and cloud computing capacity – and will consolidate existing public-funded data centres. It will provide use-on-demand cloud services for state entities, national departments, provinces, municipalities, metros, SOEs, universities, research centres, civil society organisations, and businesses.

Other proposals included in the draft policy are:

  • Digital/ICT Special Economic Zones (SEZs) shall be established to support local and foreign investment in data and cloud infrastructure and services. Multinational firms investing in data centres shall be required to make provision for skills and digital technology transfer to ensure benefits and gains from Foreign Direct Investment (FDI).
  • Data centres may make provision for self-generation energy capabilities to ensure uninterrupted and sustainable operations while reducing total dependence on the strained national electricity grid.
  • To support SMMEs in the digital economy, strategies and interventions (such as digital hubs and digital transformation centres) shall be adopted by SITA to enable locally developed applications through collaboration between relevant government departments, agencies, academia and SMMEs.
  • Investment in data centres and cloud services shall comply with the provisions of broad-based black economic empowerment.


The policy, which was first published on 1 April for public comment, has received over 17,000 submissions which the department is currently reviewing and analysing, Ndabeni-Abrahams said in a briefing on Friday (18 June). While these comments are still being reviewed, the minister said some specific concerns were raised repeatedly. These include:

A high-performance computing data processing centre

Most commenters argued that the government is trying to create another state-owned company, that government does not have the capacity to run it and that it is government’s attempt to compete with the private sector to provide cloud services, which is not sustainable due to limitations of the fiscus. Other concerns raised relate to the data security threats relating to the centralization of government data in one place.

A State Digital Infrastructure (SDIP) Company

Concerns Were Raised That The Role Of Connecting Government And Government Institutions Should Be Played By The Private Sector.

Localisation and cross-border data flows

There are concerns about the issue of Critical Information Infrastructure (CIF), specifically that the definition of such infrastructure is too wide and could be an impediment to investment as most of the infrastructure could be unnecessarily classified under this definite, prohibiting free flow of information. Under localisation there is also concern about the obligation to keep a copy of the data transferred outside South African borders domestically.

The concern is that this could impose an unnecessary cost burden to many multinationals and might therefore also discourage investment. Lastly, there is a perception that this intervention can also have a negative impact on the African Continental Free Trade Agreement.


There is an argument that there is no strong reason to push for the changes in competition law, around companies such as Google and Microsoft, because there have not been clearly identified competition issues around which there could be concerns.

This news was originally published at Business Tech.