Today, Naspers and the Mapungubwe Institute for Strategic Reflection (MISTRA) released a pioneering research report revealing that South Africa’s digital platform economy could inject R91.4 billion into the national economy by 2035. This study, titled “Our Digital Horizon: The Economic Opportunity of Digital Platform Businesses in SA,” offers the first comprehensive model of the economic impact of digital platforms in South Africa, underscoring the sector’s transformative potential.
Unleashing Economic Potential
The report projects that South Africa’s digital platform economy—comprising businesses that facilitate online transactions—could expand its contribution to GDP from 0.02% in 2022 to 1.38% by 2035. To achieve this, the country must embrace digital transformation across all sectors.
Naspers, a leader in digital investments, along with MISTRA, believes this growth could be a game-changer for South Africa’s economy. If consistent annual economic growth of 3% is achieved, the digital platform market could grow 20-fold, dramatically enhancing economic inclusion and contributing more than R90 billion to the economy by 2035.
Key Findings: A Blueprint for Digital Growth
The report identifies several key areas where collective action is needed to fully realize this potential:
- Slow Digital Transformation: South Africa lags behind global counterparts in digital adoption. From 2010 to 2022, the world’s top companies transitioned from resource-driven sectors to digital platforms. Yet, South Africa’s progress has been slower.
- Growing Demand for Digital Skills: Digital skills are rapidly in demand, yet only 18% of South African graduates are in STEM fields, compared to over 30% in countries like India and South Korea. The report calls for a national push to boost STEM education and align skills training with industry needs.
- Infrastructure as a Catalyst: High data costs and limited access to high-speed internet constrain digital growth. Addressing these challenges by expanding digital infrastructure is critical to unlocking the promise of digital platforms and AI.
- Evolving Regulations: Lengthy regulatory processes—taking up to 180 days—hinder access to digital infrastructure. Regulatory sandboxes and streamlined policies are recommended to foster innovation and timely market access.
- Inclusive Growth: Digital platforms offer significant opportunities to enhance economic inclusion, especially for SMEs and underserved communities. Expanding digital access and offering protections for gig workers can drive more inclusive economic growth.
Naspers and South Africa’s Digital Future
Naspers has long been a key player in South Africa’s digital economy, contributing significantly to economic value through its local entities such as Takealot, Mr D, and Property24. In 2022, these businesses generated R13 billion in economic value and supported household incomes by R1.5 billion. By lowering wholesale and retail trade costs, Naspers has also reduced living expenses, making essential goods more affordable for South Africans.
Phuthi Mahanyele-Dabengwa, CEO of Naspers South Africa, emphasized the importance of collaboration in unlocking this growth potential:
“South Africa stands on the brink of a digital revolution. This report arrives at a crucial time when there is renewed energy to drive inclusive economic growth. For this transformation to be realized, public and private sectors must collaborate to bridge the digital divide, expand digital access, and ensure that regulations promote innovation.”
Learning from Africa and Beyond
Case studies from Kenya and Nigeria demonstrate the significant impact of digital startups in addressing local needs and driving economic growth. The report urges South Africa to follow suit by attracting more venture capital investment, particularly in underfunded sectors like fintech and healthtech, to accelerate digital growth.
MISTRA’s Executive Director, Joel Netshitenzhe, highlights the report’s critical findings:
“The digital platform economy has the potential to drive inclusive and transformative growth, unlocking opportunities for millions of South Africans. While there are barriers, the solutions are within reach, requiring urgent collaboration and bold actions from all stakeholders.”
Moving Forward: Unlocking a Digital Future
To harness the full potential of South Africa’s digital platform economy, the report provides actionable recommendations, including improving digital infrastructure, boosting STEM education, and evolving regulations. Implementing these changes could propel South Africa into a prosperous digital future, fostering innovation, economic inclusion, and shared prosperity for all.
As South Africa’s digital transformation journey gains momentum, this report marks a significant step toward realizing the vast opportunities that the digital economy presents. The full report can be accessed at Naspers Digital Horizon Report.
