South Africa’s Digital Competitiveness Is Falling Behind as Peer Nations Race Ahead
South Africa’s position in the global digital economy is under serious threat, with critical indicators around broadband infrastructure, digital skills, and regulatory frameworks showing the country is being outpaced by comparable economies. A major new report has sounded the alarm — and the findings paint a sobering picture for policymakers and industry leaders alike.
The Development Bank of Southern Africa (DBSA) last week published the South Africa Digital Infrastructure Investment Study (Sadis) 2025, a comprehensive assessment that examines how much investment is required — and in which areas — to ensure every South African can meaningfully access and participate in the digital economy. The report was compiled in partnership with the National Planning Commission.
“International indices expose a significant weakness in South Africa’s future global ranking in digital competitiveness,” the report stated. It added that stakeholder consultations and internal metrics both reinforce what local policy documents have long been calling for: major investment in programmes that build digital literacy and digital readiness across the population.
The study was spearheaded by Pieter Grootes, a digital economy strategist at Networks Anonymous, alongside a multidisciplinary team with expertise in ICT infrastructure, network costing, public policy, GIS modelling, and telecommunications.
South Africa’s Digital Weaknesses Laid Bare
When measuring digital competitiveness, global rankings assess a broad range of factors — from a country’s ability to leverage digital tools in its workforce, to whether its regulatory environment encourages infrastructure investment, ensures data privacy, and provides effective cybersecurity protections.
According to the IMD World Digital Competitiveness Index 2025, South Africa moved from 60th place in 2020 to 54th out of 67 countries in 2024. While that may seem like progress on the surface, a deeper look at the individual metrics tells a very different story.
The country’s worst performances were recorded in training and education (ranked 60th) and its regulatory framework for digital competitiveness (ranked 62nd). On education quality outcomes specifically, South Africa sits at 61st for higher education achievement and 56th for the number of science graduates produced annually.
What makes these figures even more troubling is that South Africa consistently ranks second globally for education spending as a share of the national budget. In other words, the money is going in — but the outcomes are simply not following.
One structural reason for this stagnation, the report explains, is that nations that have already built strong digital infrastructure and skills bases tend to preserve and expand those advantages over time, making it increasingly difficult for late movers like South Africa to close the gap.
More than 98% of South Africa’s population now has access to 4G coverage — a figure that might suggest strong digital inclusion. Yet meaningful internet usage rates remain far below that number, exposing what experts describe as a significant “usage gap.” Speaking at the report’s launch at the DBSA’s Midrand offices, Grootes was direct: deploying infrastructure alone simply isn’t enough. Demand-side barriers must be tackled simultaneously.
Affordability emerged as the single biggest constraint on digital usage. The majority of South Africans rely on mobile connections and purchase prepaid data bundles to get online. On top of data costs, the price of a basic but functional smartphone — when measured against income — exceeds the country’s universal basic minimum monthly wage, placing a major device ownership barrier in front of millions of citizens.
The Sadis report estimates that South Africa will need between R108-billion and R142-billion in cumulative investment by 2035 to connect all households to 100Mbit/s broadband speeds and strengthen the country’s capacity to compete globally in the digital arena. However, the report is firm that addressing supply-side infrastructure gaps will not, on its own, deliver the transformation needed.
The report draws a critical distinction: digital participation in today’s economy is no longer simply about whether a physical network exists. It now depends on what it calls “digital readiness” — a country’s genuine capacity to adopt, absorb, and productively apply digital technologies at scale. Without closing the affordability gap, lifting education outcomes, and modernising the regulatory environment, South Africa risks remaining a nation with world-class coverage statistics and underwhelming real-world digital participation — a gap that, if left unaddressed, could prove far more costly in the long run than any infrastructure investment.