South African analysts believe 2025 will see key milestones being reached in the local tech sector.
ITWeb interviewed some pundits about the technologies that they think will have the biggest impact this year.
Among the technologies that the analysts believe will have the biggest effect are artificial intelligence (AI), fintech, digital agriculture, the continued roll out of 5G, as well as the expansion of e-commerce.
They also share insights about what government needs to do in order to create a conducive environment for the ICT industry to thrive.
Walter Moldenhauer, director of analytics at Africa Analysis, says several key technology trends are poised to impact the South African economy in 2025.
He points out that according to a country report by the US International Trade Administration, the South African digital economy’s contribution to South African GDP is projected to rise from approximately 8% to 10% in 2020 to 15% to 20% in 2025.
Key drivers in digital economy growth include advancements in digital infrastructure, increased internet access (primarily through increased smartphone penetration), and a surge in e-commerce, he notes.
Moldenhauer adds that according to a 2024 Naspers report, the digital platform sector (which includes e-commerce and fintech) could contribute as much as R91.4 billion to the economy by 2035, and has increased its share to 1.38% from 0.02% in 2022.
He notes that this growth includes a cumulative tax contribution of R10.7 billion.
Moldenhauer believes that 5G rollout by South Africa’s major mobile network operators (MNOs) is expected to continue in 2025.
“5G networks are expected to unlock new possibilities in industries including healthcare, manufacturing, mining, and entertainment, enabling faster data transmission and improved connectivity,” he says.
“The continued expansion of 5G networks could provide stable, high-speed connectivity to underserved regions, accelerating the shift toward cloud-based systems and advanced digital technologies. Network service improvements, through 5G networks, could offer new possibilities in smart mining and industrial applications, especially the increased adoption of the internet of things (IOT).”
He states that the adoption of digital infrastructure is also finding its way into the South African agricultural sector.
“In the Western Cape, the agriculture sector is turning to smart farming technologies to tackle challenges including water scarcity and climate change. Tools such as IOT devices, data analytics, and drones are helping farmers manage resources, monitor crop health, and improve crop yields.”
Moldenhauer is of the view that fintech advancements such as blockchain and AI will continue to revolutionise traditional banking systems, streamlining operations, and improving customer experiences.
The adoption of digital wallets and mobile payment platforms continues to grow in South Africa, driven by a growing demand for secure, convenient, and fast financial services, he notes.
“Fintech companies such as Yoco are growing rapidly. According to the Naspers report, revenue in this market is projected to reach $434 million in 2024, driven by developments in digital payments, digital assets and neo-banking, a form of online banking. The portfolio of assets in fintech is valued at $7.5 billion and slated to have significant impact and potential for future growth. Fintech start-ups are leveraging AI to enhance fraud detection, while blockchain is being used to create transparent and tamper-proof transaction records.”
Pervasive digital transformation
For Christopher Geerdts, managing director of BMIT, the most significant ICT megatrend, which impacts all of society and the economy, is pervasive digital transformation.
He says the benefits of this transformation cover all sectors, and can include efficiencies and transparency in government, improved health and education.
“It also means the problem of digital exclusion (where many South Africans lack the connectivity, devices or knowledge to participate) becomes more critical, particularly among the youth.
“We are seeing artificial intelligence evolve at an unprecedented pace and this is a two-edged sword – it opens up substantial opportunities for individuals, businesses and government itself but threatens to further widen the gulf between digitally advanced nations and South Africa.”
Geerdts believes the initial impact of AI will be in personal productivity and business process automation, “as we are already seeing and in 2025 we will see major deployment. However, AI is making great strides in generating creative content - impacting the arts and media”.
He urges government to hasten its policy development to understand how to embrace and exploit AI to tackle some of its most pervasive social problems, such as the education and skills deficit and a lack of health services.
“The right initiatives could make a meaningful impact. At the same time, government needs to accelerate initiatives to promote broadband and make devices more accessible, otherwise half of our population will not only miss out on the benefits of AI, but be sidelined,”says Geerdts.
“Policies need to be put in place with some urgency to prevent AI from doing harm and to hold people and organisations accountable for the actions of their AI deployments. Policy development must not be seen as an ICT issue, but needs to assume a wide, multi-sectoral approach, spanning departments, in order to be effective.”
Mark Walker, IDC associate VP of data and analytics in the Middle East, Turkey and Africa region, comments that with the impact of AI beyond the hype of 2023/4, enterprises are now in a position to critically evaluate their initial forays into AI and will be drilling into use cases, return on investments and impact on their business operations form both financial and productivity perspectives.
Pro-growth policies
Dobek Pater, director of business development at Africa Analysis, is of the view that a number of ICT development plans and policies are already in place but these are often not implemented as intended.
“The government should ensure that pro-growth policies for the ICT sector are implemented. Ensure that the ICT environment is as competitive as possible, without stifling the competition and positive market forces.”
Pater points out that the government should focus on playing an enabling role (through correct policy, legislation and regulation) but limit its direct participation in the ICT sector.
He explains that the government’s role would include subsidisation of delivery of ICT services and products to communities, as needed, and assistance in securing development (or other) funding for ICT sector growth and expansion.
“Focus on the development of strong bilateral ties with countries which have strong ICT innovation environments, as such co-operation would probably benefit the ICT sector in SA. This would include greater assistance provided to SA ICT companies in the development of close co-operation with organisations globally (companies, research institutes etc) from which SA companies could benefit.”
Ofentse Dazela, director of pricing research at Africa Analysis, adds that several key trends are poised to shape SA ICT sector this year, with significant implications for the broader economy.
He says the country is gearing up to phase out 2G and 3G networks by 2024/2025, and this paves the way towards more advanced technologies.
“The rollout of 5G network infrastructure will probably gain momentum in 2025, enhancing connectivity and enabling advancements in sectors such as the IOT, smart mining, and industrial applications. This transition is expected to improve service quality and spectrum efficiency, fostering innovation and economic growth.”
According to Dazela, efforts to expand digital infrastructure have been evident over the years, with large ICT companies constantly seeking mergers, for example, to enhance their fibre broadband presence.
However, he notes, regulatory challenges, such as the recent blocking of Vodacom's acquisition of a stake in fibre operator Maziv, may influence the pace and nature of these investments.
To address connectivity challenges in rural and remote areas, South African telecom operators are exploring partnerships with satellite internet providers, says Dazela.
“Some MNOs are considering collaborations with low Earth orbit satellite operators to extend coverage. If these ongoing discussions come to fruition, this could enhance digital inclusion and economic participation.”
Dazela calls on government to also prioritise offering upskilling programmes for the existing workforce to adapt to rapidly evolving technologies.
Mixed bag
Arthur Goldstuck, MD of World Wide Worx, says the South African economy in 2025 will likely be influenced by a mix of global, regional, and domestic trends.
“From a technology point of view, we will see continued efforts to make a transition to renewable energy sources, whether or not supported by government initiatives, further reducing the likelihood or impact of load-shedding. Private sector investments in solar, wind, and battery storage are expected to rise.”
Goldstuck points out that there will also be continued growth in the fintech sector, driven by increased adoption of digital payments and mobile banking.
“We expect aggressive marketing from start-ups like Yoco, TymeBank and Bank Zero, as well as challengers like Capitec.
“We also anticipate more vigorous government and private initiatives to improve participation in the digital economy, as long as the Government of National Unity continues to function smoothly. The minister of communications and digital technologies can be expected to ramp up efforts to boost the digital transition of the country as a whole.”
He adds that there will be a dramatic ramping up of AI-driven solutions in all areas of society, as the tools become more accessible, cheaper and user-friendly, and innovators find new ways to apply them to the needs of the country ad continent.
“This could drive job growth, or the emergence of new job roles, in sectors as diverse as healthcare, retail, and mining. Of course, fears of job displacement in traditional roles will grow, but there is a clear opportunity to boost employment through innovative ways of introducing AI in various environments. Skills development programmes will be a critical requirement in this context, and more tax and other incentives need to be applied.
“Significant challenges and opportunities resulting from US-China rivalry and trade tariffs imposed by the Trump administration. South Africa will need to balance relationships with its key trading partners, since it relies on both Western markets and China, but we can expect a strong leaning towards the latter,” Goldstuck concludes.
Share