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    Home » Sections » Policy and regulation » Warning that South Africa’s digital competitiveness is in retreat

    Warning that South Africa’s digital competitiveness is in retreat

    South Africa ranks second globally for education spending but near the bottom for digital skills and outcomes.
    By Nkosinathi Ndlovu10 April 2026
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    Warning that South Africa's digital competitiveness is in retreat

    South Africa’s ability to compete in the global digital economy is slipping, with key metrics on infrastructure, broadband access and the country’s skills profile lagging as peer economies make faster headway.

    These are among the findings of the South Africa’s Digital Infrastructure Investment Study (Sadis) 2025 report (PDF) released by the Development Bank of Southern Africa last week.

    “International indices expose a significant weakness in South Africa’s future global ranking in digital competitiveness. Our own self-developed metric as well as consultation with stakeholders confirm what South African policy documents have been calling for: significant investment in programmes to enhance digital literacy and digital readiness,” the report said.

    Countries that invest in digital infrastructure and skills tend to maintain those advantages over time

    The report was commissioned by the DBSA in partnership with the National Planning Commission. Its core aim is to determine how much investment is needed – and where – to ensure that all South Africans have access to, and can meaningfully use, high-quality, affordable broadband connectivity to participate in the digital economy.

    The study was led by Pieter Grootes, digital economy strategist at Networks Anonymous, with contributions from a multidisciplinary team consisting of ICT network infrastructure, network costing and investment, public policy, and economics expertise and include: Andre Wills, project director at Africa Analysis, Walter Moldenhauer, GIS expert and econometric modeller at Africa Analysis, Roald Kvevli, telecoms technical and financial analyst at Krafttech, and Dominic Cull, policy and regulatory expert at Ellipsis.

    Areas of weakness

    Digital competitiveness rankings combine a number of factors including the ability of the labour force to use digital tools, the future trajectory of the skills base, and whether the prevailing legislative and regulatory environment supports investment in digital infrastructure, ensures effective data and privacy governance, and provides robust cybersecurity protections.

    The Sadis analysis shows that South Africa improved its overall ranking from 60th in 2020 to 54th (out of 67 countries) in 2024, according to the IMD World Digital Competitiveness Index 2025. But a closer look at individual metrics exposes worrying gaps.

    Read: SA finally has a broadband map – and it reveals where the gaps are

    South Africa performed worst in training and education (60th) and in the regulatory framework for digital competitiveness (62nd). On the quality of education outcomes, the country is ranked 61st for higher education achievement and 56th for the number of graduates in the sciences.

    Even more concerning is that South Africa consistently ranks second globally for education spending as a proportion of the national budget, meaning the outcomes do not match the financial investment.

    Pieter Grootes
    Pieter Grootes

    According to the report, one reason South Africa has not been able to improve its ranking more substantially is that countries that have already invested in digital infrastructure and skills tend to maintain those advantages over time.

    Another factor is the glaring usage gap: more than 98% of the population has 4G coverage, yet meaningful internet usage is far lower than that.

    At the launch of the report at the DBSA’s offices in Midrand last week, report lead Grootes said deploying infrastructure alone is not enough. Money must also be spent on demand-side factors to ensure people want – and are empowered – to use digital tools to improve their lives.

    The potential of a digital society no longer depends simply on the availability of infrastructure

    Affordability was identified as the major constraint on usage, with most users reliant on a mobile connection and typically buying prepaid data bundles to get online. The relatively high cost of devices – as a percentage of income – also plays a restrictive role: the report shows that the cost of a basic but capable smartphone exceeds South Africa’s universal basic minimum monthly wage.

    According to the report, South Africa needs between R108-billion and R142-billion in cumulative investment by 2035 to connect all households to 100Mbit/s broadband and boost the country’s ability to participate competitively in the digital economy. But addressing supply-side constraints alone will not be enough.

    Read: The staggering cost of connecting every South African household

    The report argues that the potential of a digital society no longer depends simply on the availability of infrastructure but on whether a country has the capacity to adopt and productively use digital technologies – what it calls “digital readiness”.  – (c) 2026 NewsCentral Media

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    Africa Analysis Andre Wills DBSA Development Bank of Southern Africa Dominic Cull Ellipsis IMD Krafttech National Planning Commission Networks Anonymous Pieter Grootes Roald Kvevli Walter Moldenhauer
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