Digital Platforms Could Add $ 4.84 Billion to South Africa’s Economy by 2035: Naspers and MISTRA Report

Johannesburg, South Africa – In a pioneering effort to assess the untapped potential of South Africa’s digital platform economy, Naspers and the Mapungubwe Institute for Strategic Reflection (MISTRA) have launched a research report that could reshape the country’s economic landscape. The study, titled “Our Digital Horizon: The Economic Opportunity of Digital Platform Businesses in South Africa,” highlights the transformative potential of digital platforms, projecting an infusion of $ 4.84 Billion into the South African economy by 2035.

A Transformative Economic Opportunity

According to the report, South Africa’s digital platform economy, which includes online platforms facilitating economic transactions, could see its GDP contribution surge from a mere 0.02% in 2022 to a significant 1.38% by 2035. This growth represents a 20-fold expansion, making the sector a pivotal component of the country’s future economic framework.

Phuthi Mahanyele-Dabengwa, CEO of Naspers South Africa, emphasized the importance of this moment, stating, “South Africa stands on the brink of a digital revolution. Though still in its early stages, the shift to digital mirrors global trends and offers a rare chance to unlock significant economic potential for our nation. As one of the country’s largest investors, Naspers is committed to leading this transformation by driving innovation and inclusive growth in this vital sector.”

Key Findings and Recommendations

The report’s findings underscore the necessity for collective action between the public and private sectors to foster digital transformation, address infrastructure needs, and evolve regulations in line with the burgeoning digital platform sector. It also highlights the critical role digital platforms could play in driving economic inclusion and enhancing social protection.

The study outlines several key findings:

1. Slow Pace of Digital Transformation: The digital transformation in South Africa is lagging behind global trends. Between 2010 and 2022, the world’s top 20 companies transitioned from being resource-driven to digitally dominated. To accelerate this transformation in South Africa, the report calls for a collective effort among business, government, and civil society.
2. Growing Demand for Digital Skills: The rapid increase in demand for digital skills contrasts with South Africa’s relatively low number of STEM graduates, which stands at just 18% compared to over 30% in innovation leaders. The report recommends boosting STEM education from the basic level and aligning training with industry needs.
3. Infrastructure as a Key Enabler: High mobile data costs and inadequate digital infrastructure are significant barriers. The report urges the fast-tracking of high-speed internet and prioritization of digital infrastructure in national development plans.
4. Evolving Regulations: The regulatory framework in South Africa is not yet fully attuned to the needs of the digital platform economy. Introducing regulatory sandboxes and including the digital platform sector in national economic tracking systems are among the suggested measures.
5. Economic Inclusion: Digital platforms are seen as critical to enhancing economic inclusion, particularly in underserved areas. The report suggests expanding digital access in rural areas and enhancing market access for SMEs.

Significant Economic Contributions by Naspers

The report also highlights the economic impact already generated by Naspers and its South African entities, which include Takealot.com, Mr D, Superbalist, AutoTrader, Property24, and PayU. Collectively, these businesses have generated over $690 million in economic value and contributed $79 million to household income in 2022 alone. Additionally, platform-based businesses have lowered wholesale and retail trade costs by 0.5% and reduced living expenses by 0.6%.

The Path Forward

Joel Netshitenzhe, Executive Director of MISTRA, emphasized the importance of collaboration, stating, “The digital platform economy has the potential to drive inclusive and transformative growth, unlocking opportunities for millions of South Africans. While the foundational elements are in place, significant barriers remain that hinder society from realizing 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.”

The report concludes that with the right policies, infrastructure, and collaboration, South Africa can fully realize the economic benefits of digital platforms, positioning the country as a leader in digital innovation in Africa.