The digital economy could potentially inject $5.2bn into South Africa's economy and expand its gross domestic product (GDP) contribution to 1.38% from 0.02% by 2035, according to a new report.

Naspers, the continent's biggest company by market value and a local think tank, Mapungubwe Institute for Strategic Reflection (Mistra), said in the report they released on August 27 that South Africa's digital economy is still lagging, but if government and business collaborate, it has potential to be a game-changer in Africa's most advanced economy.

“There are vast opportunities before us and it is clear that a thriving digital platform economy could bring enormous value to South Africa,” said Mistra executive director, Joel Netshitenzhe.

“While the foundational elements are in place, significant barriers remain that hinder society from realising 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.”

Compiled over nine months, the report, titled Our Digital Horizon: The economic opportunity of digital platform businesses in SA, makes five findings including that the country’s pace towards digitalisation is slow and the need for infrastructure to be developed to lower data prices. It, too, highlights the importance of relevant skills and for an enabling regulatory framework to be put in place. 

On skills, the paper noted that science, technology, engineering and mathematics graduates in South Africa account for just 18% of the total, compared to over 30% in innovation leaders like India, the UAE, and South Korea. In terms of infrastructure, it said at an average of $1.81 per gigabyte, mobile data costs in the country are among the highest globally, surpassing those in markets like Nigeria, Namibia, and Kenya.

Phuthi Mahanyele-Dabengwa, Naspers South Africa chief executive officer said the tech giant which serves about 2bn people in more than 100 countries, is committed to playing a major role in the African nation's digital transformation.

“For this potential to be realised, collaboration is key," she said. "Public and private sectors must join forces to bridge the digital divide by expanding digital access, accelerating digital skills to underserved communities and ensuring regulations fuel innovation and create a level playing field."