South Africa’s digital economy could contribute $5.2 billion to the nation’s economy by 2035, increasing its GDP contribution to 1.38%, according to a recent report by Naspers and the Mapungubwe Institute for Strategic Reflection (Mistra). The study outlines the country’s slow progress towards digitalisation, highlighting the need for infrastructure development, skills enhancement, and regulatory reform.
South Africa’s digital economy, though currently lagging behind global counterparts, possesses the potential to become a significant economic driver, with the capacity to inject $5.2 billion into the nation’s economy by 2035. This prospective growth, which could elevate the sector’s GDP contribution from a modest 0.02% to 1.38%, was detailed in a comprehensive report released on August 27 by Naspers, Africa’s largest company by market value, in collaboration with the Mapungubwe Institute for Strategic Reflection (Mistra).
The report, titled Our Digital Horizon: The Economic Opportunity of Digital Platform Businesses in South Africa, underscores the pressing need for a coordinated effort between government and business to harness the digital economy’s transformative potential. “There are vast opportunities before us, and it is clear that a thriving digital platform economy could bring enormous value to South Africa,” remarked Joel Netshitenzhe, Mistra’s executive director, during the report’s unveiling.
Despite the foundational elements being in place, Netshitenzhe noted that several significant barriers continue to impede the realisation of this potential. “The encouraging central message of the report is that solutions are within reach, but they require urgent collaboration and bold actions from all stakeholders,” he added, emphasising the necessity of strategic partnerships.
The report, compiled over nine months, delineates five key findings, the foremost being South Africa’s sluggish pace towards digitalisation. It also highlights the critical need for infrastructure development to reduce prohibitively high data costs and enhance accessibility. Currently, mobile data prices in South Africa average $1.81 per gigabyte, among the highest globally, and notably higher than those in comparable markets such as Nigeria, Namibia, and Kenya.
The issue of skills was also addressed, with the report pointing out that South Africa lags in producing graduates in science, technology, engineering, and mathematics (STEM) disciplines, who make up a mere 18% of total graduates. This is in stark contrast to innovation leaders such as India, the UAE, and South Korea, where STEM graduates exceed 30%.
Phuthi Mahanyele-Dabengwa, CEO of Naspers South Africa, reiterated the tech giant’s commitment to fostering digital transformation in the country. “For this potential to be realised, collaboration is key,” she stated, calling for a united front between the public and private sectors to bridge the digital divide by expanding access, accelerating digital skills in underserved communities, and ensuring that regulations foster innovation and create a level playing field.
The report’s findings are a clarion call for urgent action. If South Africa is to unlock the economic benefits of its digital economy, the path forward must involve decisive measures to lower data costs, bolster digital infrastructure, and cultivate a skilled workforce. With such steps, South Africa could not only transform its digital landscape but also secure its position as a leader in the continent’s digital revolution.
