South Africa recently gazetted its 2025 Integrated Resource Plan (IRP), which outlines R2.23-trillion of investments that are intended to define the country’s energy mix and support the government’s efforts to grow the economy of the future.
However, it is striking that the word “digital” or the phrase “digital economy” does not appear once in the IRP.
Though the plan is intended to address the country’s future energy needs, the absence of any reference to digital networks indicates that South Africa continues to underplay the importance of the digital economy, particularly at a time when we are transitioning into a more stable energy environment.
Economists often reference the global benchmark for emerging markets: a 10% increase in broadband penetration should translate into about 1.4% GDP growth. There is also a clear link between internet access and improved employment opportunities.
Both outcomes are vital for a more prosperous South Africa. We need growth and we need jobs. Yet we need to ask why current fibre and broadband investments have not meaningfully shifted GDP performance and what must change to unlock impact.
To understand this, we need to look at how South Africans are accessing the internet. Almost three quarters of the population has access via a smartphone, but only about 15% have a home internet connection, according to the 2025 “State of the ICT sector in South Africa” report.
If we can close this gap by bringing internet connectivity to homes and small businesses, this will catalyse economic growth. We already have the proof points from our own experience — where internet is rolled out, positive economic benefits flow.
Investment opportunity
Recent global research by McKinsey highlights the scale of infrastructure investment required to 2040. It estimates that the world will need to deploy about $106-trillion over the next 15 years. Transport and logistics will absorb the largest share at $36-trillion. Energy and power follow at $23-trillion. Digital infrastructure is close behind at $19-trillion.
McKinsey notes that fibre, towers, satellites and data centres form the backbone of business, cities, digital services and AI-powered systems across all sectors. In other words, none of the major infrastructure ambitions set out globally can succeed without a strong digital ecosystem underpinning them.
In essence, the only way other infrastructure can be viable is if it has the supporting digital ecosystem around it.
Execution partner
In a fast-moving global economy, African countries need robust digital networks to power innovation and inclusive growth. Delays in funding and deployment carry a real opportunity cost and risk locking millions of people out of meaningful economic participation.
Despite this, a lack of agility and execution weighs on the ecosystem. Execution capacity remains one of the continent’s biggest constraints. Boston Consulting Group’s (BCG) October 2025 report, “Africa Unleashed: Bridging Africa’s infrastructure execution gap”, highlights that though Africa has a large infrastructure pipeline that includes about 130 AU-backed projects across energy, transport, digital and water, only eight are under construction.
About 65% are stalled at the pre-final investment decision stage. According to BCG, this gap costs the continent about $500bn in lost GDP, 74-million jobs and 1-million lives every year.
The BCG report uses an important term — “co-builders”, not bystanders — and this feels apt for the South African market. If we can co-ordinate efforts, the private sector is a capable execution partner.
South Africa needs to think more innovatively about how digital infrastructure is funded. For decades the instinct has been to centralise major infrastructure decisions, particularly in energy generation, distribution and transmission. It was only when the cap on private power generation was lifted in 2022 that large-scale energy projects could move forward. The shift was driven by crisis conditions in which the country faced up to 12 hours of load-shedding a day.
We now need to apply the lessons from the energy response to the digital economy. South Africa has already proven that with the right policy adjustments it can create an enabling environment that unlocks significant public and private investment. Incentives from the department of trade, industry & competition have already catalysed important investments across industrialisation, energy and logistics.
As global and local research shows, these sectors cannot achieve their potential without strong supporting digital networks. This requires investment. The sooner we unlock it, the sooner we can equip the economy with the infrastructure required for growth.
We believe the Industrial Policy Action Plan should be amended to treat fibre networks as critical infrastructure eligible for these incentives.
Given the central role digital infrastructure will play in South Africa’s economic trajectory, the country must prioritise agility in funding and introduce incentives that support the rapid rollout of technologies such as fibre. For too long development has been viewed primarily through the lens of energy scarcity and sectoral silos. The language of the IRP reflects this mindset. A more integrated approach that includes digital infrastructure will help unlock growth and job creation at scale.
South Africa faces a choice: continue treating digital infrastructure as ancillary to “real” infrastructure and watch our economy lag, or recognise that in 2025 fibre networks are as foundational as roads and power lines. One path leads to further economic stagnation; the other to the inclusive growth South Africa desperately needs.
- Oosthuysen is CEO at fibre internet service provider Net Nine Nine.
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