SERAME TAUKOBONG | Digital infrastructure is SA’s most undervalued reform lever

This year’s World Economic Forum was dominated by politics, but when it came to technology conversations the spotlight was on digital infrastructure. Increasingly, this is recognised as the foundation for artificial intelligence (AI) scaling, data sovereignty and economic competitiveness. Countries that invest now in hyperscale data centres, computational capacity, cybersecurity preparedness and broadband rollout will be well positioned for the next wave of economic growth.

South Africa faces a strategic choice as the economic game has fundamentally changed. Value creation now increasingly depends on data processing, AI applications and digital services. At home, the digital infrastructure conversation often centres on broadband access and connectivity gaps.

This remains critical, but a new strategic frontier is equally important. Computational capacity is emerging as the latest differentiator for countries seeking to leverage the opportunities offered by AI.

According to the Global System for Mobile Communications Association, South Africa’s digital economy could contribute 20% of GDP by 2028 — about R1.34-trillion. This would create 300,000 jobs and boost growth by 1%-2% annually, based on a 2024 baseline. Achieving these targets requires AI-ready infrastructure, including hyperscale data centres, fibre networks and the computational capacity that can train and run AI models relevant to African contexts.

South Africa is the most digitally advanced economy in our region with more than 50 data centres. But as the digital economy grows we will need to keep investing in supportive infrastructure. This is a challenge our neighbours share. The Africa Data Centres Association estimates the continent needs up to 1,000MW of capacity across 700 facilities to meet demand. Presently there are 223 centres across 28 countries — less than 0.02% of the world’s total, according to the African Energy Chamber.

A shared digital infrastructure model could offer a way forward. Rather than individual countries struggling to finance data centres, Southern African Development Community members could pool resources to build world-class regional facilities.

Without this infrastructure African businesses will process data overseas, train AI models on foreign servers and cede digital sovereignty along with economic opportunity. But building this foundational infrastructure requires billions in investment from both public and private sources.

A shared digital infrastructure model could offer a way forward. Rather than individual countries struggling to finance data centres, Southern African Development Community (Sadc) members could pool resources to build world-class regional facilities. We could co-ordinate fibre deployments and scarce capital in a larger addressable market of 300-million, rather than South Africa’s 60-million. Cross-border fibre networks would enable digital trade and integration, not just domestic connectivity.

By sharing our infrastructure we can share prosperity and growth, lifting all economies in the region. This aligns with the goal of continental integration, represented by the African Continental Free Trade Area (AfCFTA). Once fully integrated, AfCFTA could raise incomes by 9% and lift 50-million people out of extreme poverty, according to the World Bank. Digital infrastructure is needed to support seamless cross-border trade, payments and supply chain integration. Presently less than 20% of Africa’s total commerce is intraregional.

Interoperable systems

As an example, the Sadc is developing a federated e-Know Your Customer (KYC) system across 16 member states. The aim is to address financial exclusion for more than 3.7-million cross-border nationals through interoperable systems and co-ordinated investment.

Globally, economic success has accrued to interconnected economies. The EU has co-ordinated infrastructure investments and Southeast Asia has integrated supply chains, with countries sharing the benefits of a larger economic pie.

Three shifts are required to make this vision operational:

• Reclassify digital infrastructure with the same priority as electricity and transport. This means streamlining regulatory processes, setting infrastructure-grade investment horizons and developing policy frameworks that facilitate large-scale projects.
• Structure public-private partnerships properly. Companies such as Telkom, which already provides South Africa’s digital backbone, demonstrate how established infrastructure operators can anchor these investments. Infrastructure players with proven track records, government relationships and technical expertise reduce the risk of billion-rand commitments and attract the capital needed to close the funding gap.
• Establish regional infrastructure agreements. The Sadc already has the mechanisms for policy foundations in the form of the Malabo Convention on cybersecurity and the Sadc Digital Transformation Strategy. We now need to focus on implementation with financial backing and shared ownership frameworks.

This doesn’t mean forsaking our other economic priorities. Rather, it’s a recognition that economic growth, job creation and regional influence are most likely when we invest in computational capacity.

The infrastructure we build — or fail to build — over the next five years will determine South Africa’s economic trajectory for decades. We can treat digital infrastructure as a domestic concern, competing with neighbours for limited resources while global economic leadership shifts to regions with better computational capacity. Or we can recognise that regional co-operation is strategic positioning and resilience, not weakness.

• Taukobong is CEO of Telkom Group.