What Are South Africa’s Fastest-Growing Industries?

What Are South Africa’s Fastest-Growing Industries?
Durban is a population destination for South Africans purchasing holiday homes. Image source: Pixabay

In 2019, Forbes reported that South Africa had become appealing to several firms on Wall Street because its economy was running just below $400 billion in GDP. The American business outlet cited the country’s equity and debt markets as key drivers of Africa’s growth potential in the long term. These two factors had also reportedly attracted the likes of Goldman Sachs at the time, one of the biggest investment banks in the United States.

Today, South Africa’s GDP is forecasted to be running at around $435 billion, and by 2026, according to Statista, it is expected to be at over $500 billion. These figures are both strong indicators of the country’s economic strength and long-term growth potential, though now other markets are believed to be contributing to South Africa’s rising GDP. In particular, the real estate, information technology, and iGaming sectors are some of the fastest-growing industries in the country; in this article, we’re going to explore each in more detail.

South Africa’s Fastest-Growing Markets

Real Estate

South Africa has always been a popular tourist destination. However, now even South African natives are purchasing vacation homes in the country, with data showing that holiday home buying increased nearly 3% in Q4 2019.

Interestingly, Durban is a population destination for South Africans purchasing holiday homes rather than Cape Town, though Cape Town-based property agencies are still seeing considerable growth.

Cape Town-based property agencies are still seeing considerable growth.
Cape Town-based property agencies are still seeing considerable growth. Image source: Pixabay

This reality has caused a spike in South Africa’s real estate market, yet the country’s residential property market remains one of the most important areas. In 2019, the country’s deeds registry recorded around six million residential properties. Additionally, reports have suggested that one of the latest key market trends in South Africa’s real estate market includes the growing demand for sectional title homes (flats, apartments, townhouses, etc.) rather than freehold homes. Much of this is because there is an increased interest in affordability, security, and communal living.

Information And Communications Technology

In 2022, South Africa is also home to one of the largest information and communications technology markets on the continent. Local developments in mobile software, electronic banking, and security software have penetrated the fast-growing African market. Recent reports also suggest over 20,000 IT companies are contributing roughly 8% to South Africa’s GDP.

IT companies are contributing roughly 8% to South Africa’s GDP.
IT companies are contributing roughly 8% to South Africa’s GDP. Image source: Pixabay

While the general state of South Africa’s economy has impacted the growth of its IT industry — the country now has the fourth-largest smartphone market in the world— much of this growth has also been the direct result of international influence. Today, several international organizations have opened subsidiaries in South Africa, including IBM, Microsoft, Dell, Intel, Unisys, Novell, and Compaq. These corporations have been responsible for providing the majority of the wireless telecommunications networks set up across Africa in recent years.

iGaming

As mentioned, South Africa now has the world’s fourth-largest smartphone market. The country has also seen increased access to the Internet (more than 56% of the population now has Internet access compared to the reported 10% in 2009.) Growth in both areas has enabled South Africa to become a leader in mobile gaming. Reports state that in 2019, roughly 20.3 million gamers in South Africa spent over $100 million on games.

iGaming industry in South Africa is growing
iGaming industry in South Africa is growing. Image source: Pixabay

For perspective, that’s a 9.4% Y-O-Y increase, which largely came from mobile games like casino games. In fact, the iGaming industry in South Africa is growing so much that many renowned international online casinos have started to accept South African players, including Malta-based Casino Lab. It’s common for online casinos in South Africa to offer dozens of promotions and deals as casino operators want to entice players and develop a competitive edge as the space becomes busier. These promotions include welcome bonuses for new players and free spins. Many South African online casinos have also started to accept electronic payments like Neteller and Skrill, which, in turn, is further proof of the country’s booming IT industry and smartphone market.

South Africa is a fast-growing economy with one of the youngest populations in the world. It has seen considerable economic growth through local markets while also sustaining additional growth by major international companies opening subsidiaries there. What will the rest of the year bring for the country? Only time will tell.