South Africa is the fourth fastest growing digital economy after China, Malaysia and Thailand, according to a report released this week. TheMediaOnline reports.
MasterCard announced the African results of the new Digital Evolution Index on Wednesday, a study that tracks a country’s digital evolution, checks on its progress and assesses problems.
Perhaps not too surprisingly, South Africa’s digital economy is the most developed in Africa, with Egypt, Kenya and Nigeria closely behind.
“South Africa ranks 33 out of the countries measured by the index in digital readiness, which is defined by the markets’ ability to support and encourage digital commerce and payments,” according to the study, conducted by The Fletcher School at Tufts University.
It ranked ahead of Egypt (48), Kenya (49) and Nigeria (50) on the African continent, an indication of the growth potential for e-commerce.
But perhaps more surprisingly, globally, “South Africa emerged as the fourth fastest growing digital economy behind China, Malaysia and Thailand”, said the report.
This was due not only to the growing proportion of the population with Internet access, but also the high percentage of adult cellphone penetration (86 percent).
South Africa was identified as a “Break-Out country”, which means it is a developing country with low readiness scores but its digital market still evolved rapidly between 2008 and 2013.
“The Index positions South Africa as a ‘Break Out’ country with an overall score of 30 out of 100 in 2013. Its score jumped from 24 to 34 between 2008 and 2012, a substantial increase compared to other countries. While
infrastructure investments in South Africa will drive e-commerce to achieve a likely 30 percent growth rate in 2014, the Index indicates that demand for e-commerce currently lags the global average.”
Egypt, Kenya and Nigeria were described as “Watch Out” countries – countries that face various challenges, but have significant opportunities for investment.
“There are currently 2.9 billion Internet users in the world, a feat that took over 20 years to achieve. The next billion users will enter the market much faster than this,” said MasterCard Global Insights vice-president Ted Iacobuzio.
“A significant proportion of these will come from Africa, where the four countries studied – Egypt, Kenya, South Africa and Nigeria – all represent exceptional growth potential coupled with short-term opportunity.”
Africa’s internet penetration last year stood at 16 percent, or 167 million people, but it is forecast to reach 50%, or 600 million people, by 2025.
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