E-Commerce Government Policies and Legislation in South Africa

Although South Africa is years past the abolishment of the apartheid system, effects of this system seem to linger to date and pose a serious threat to e-commerce. One of the legacies of the apartheid system is the stunted growth of our government polies and legislations. Government policies and legislations play a major role in unfluecing the consumer’s trust in the e-commerce of a country and reinstate the adherence to the principles of the system of democracy. Many years into E-Commerce South Africa continues to lag behind, and part of this is because of our policies and legislation.

Perceived cost of compliance

The outcomes of the study done by University of Cape Town’s Professor Kyobe in 2009 showed that most SMEs has a perception that complying was expensive. Prof Kyobe argued that this perception was the main reason behind SME’s non-compliance with government policies and legislation. This is a major blow to e-commerce in South Africa and globally since online customers tend to expect very tight compliance levels. This is because e-commerce by nature involves the transfer or valuable information across the internet. Data like credit card details and contact details which are normally sold to marketers. The level of trust in the government policies of a particular country tends to have a positive impact on e-commerce. But above the rigidness of the policies is the issue of whether they are complied with and this is an issue in the South African context.

Introduction of the ECT Act

With the introduction of the Electronic Transfer and Communications Act No 25 of 2005 (ECT Act), some level of consumer distrust is in theory eliminated. The act introduced groundbreaking legal rights and obligations. For example any form of electronically transferred data like an email can be permissible in a court of law as evidence. This means that for the online shopper, there is legal remedy should any dispute arise. The only limitation here is that no dependable precedence exists currently and little is researched or known about how most of these government policies and legislation unique to electronic transfers would be interpreted in the court of law.

Policy instability

The National Planning Commission identified policy instability as one of the nine key challenges facing South Africa in 2011. The difficulties for South Africa’s policy stability post-1994 have been enormous. Departments which were created to pursue the interest of a minority had to undergo some restructuring so that it could ultimately serve and represent a majority of South Africans. The apartheid system used the country’s infrastructure to deliver unequal services. Consequently superior services were being offered to one group and inferior services to the other.  This system slowed down the development of a majority of the black population. Initiatives like Black Economic Empowerment have ever since been used to address this issue.  BEE for example rates companies on various measures one of them being race. For many enterprises and industries in South Africa this has remained a very contentious issue and has resulted in a lot of policy instability. As things stand, as e-commerce expands it is more likely that it won’t be an exception to this phenomenon.

National and Provincial structures have been altered for the past few years to better serve the interest of the South African markets, but chronic instability still exists. It is in the light of these underlying policy instabilities that the e-commerce constraints should also be analysed. Look out for this analysis in my next article!

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  • Reply wwwebinvader July 9, 2015 at 9:35 am

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