{"id":49878,"date":"2013-11-22T00:05:30","date_gmt":"2013-11-21T22:05:30","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=49878"},"modified":"2013-11-22T14:00:25","modified_gmt":"2013-11-22T12:00:25","slug":"south-africas-internet-to-gdp-ratio","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/internet\/49878\/south-africas-internet-to-gdp-ratio\/","title":{"rendered":"South Africa’s Internet to GDP ratio"},"content":{"rendered":"

South Africa’s iGDP,\u00a0which measures the Internet\u2019s contribution to overall GDP, is at 1.4%, putting it fourth in Africa, behind Senegal, Kenya, Morocco, and neighbour, Mozambique.<\/p>\n

This is according to a new report by global management consulting firm,\u00a0McKinsey & Company titled:\u00a0\u201cLions go digital: The Internet\u2019s transformative potential in Africa\u201d.<\/p>\n

McKinsey said it has developed the concept of iGDP to measure the Internet\u2019s\u00a0contribution to the overall economy as a share of total GDP by adding up\u00a0all the\u00a0activities linked to the creation and use of Internet networks and services\u00a0in four major categories: private consumption, public expenditure, private\u00a0investment, and trade balance.<\/p>\n

For Africa, the group assessed 14 countries that together\u00a0account for 90% of Africa\u2019s GDP and found significant variation among\u00a0them.<\/p>\n

Senegal\u2019s iGDP stands at 3.3% and Kenya\u2019s at\u00a02.9%\u2014levels comparable to those of France and Germany. By contrast,\u00a0the continent\u2019s largest economies, South Africa and Nigeria, have iGDPs of\u00a01.4% and 0.8%, respectively, the\u00a0consulting firm said.<\/p>\n

“This suggests that there are major\u00a0untapped opportunities to harness the power of the Internet to drive growth\u00a0and development.”<\/p>\n

In dollar terms, the consulting firm\u00a0estimates that Africa\u2019s iGDP currently totals some $18 billion.<\/p>\n

It said that private consumption of Internet-related services and equipment, including
\nsmartphones, accounts for two-thirds of this total.<\/p>\n

Public expenditure on the\u00a0Internet, including digitisation of education and health services, contributes\u00a0only $2 billion. Private investment in infrastructure and digitisation accounts for\u00a0a further $1.5 billion, while the remainder is a positive trade balance created by
\nBPO services.<\/p>\n

\"Internet<\/a>

Internet GDP<\/p><\/div>\n

McKinsey forecasts that by\u00a02025, Africa\u2019s iGDP should grow to at least 5% to 6%, matching that of leading economies such as Sweden, Taiwan, and the United Kingdom.<\/p>\n

“However, if the Internet achieves the same kind of scale and impact as the spread of mobile phones in Africa, iGDP could account for as much as 10% or $300 billion, of total GDP while producing a leap forward in economic and social development,” it said.<\/p>\n

The report said that Morocco and South Africa could become future leaders on the continent\u00a0with particularly strong showings for\u00a0business environment and financial capital.<\/p>\n

Citing statistics by\u00a0Internet World,\u00a0McKinsey pointed to South Africa’s mobile penetration rate is at 135%, with internet penetration at 17%, while urban penetration is at 54%.<\/p>\n

Online retail penetration is at 0.49%, while internet use within companies is a paltry 5.3%.<\/p>\n

Retail<\/strong><\/p>\n

E\u2011commerce will open up a new shopping experience for Africa\u2019s growing middle class, said McKinsey.\u00a0By 2025, it could account for 10% of retail sales in the continent\u2019s largest economies, which will translate into some $75 billion in annual revenue.<\/p>\n

More on Africa’s internet and GDP<\/h3>\n

SA online economy at 2.5% of GDP by 2016<\/strong><\/a><\/p>\n

Fix the internet, boost employment: economist<\/strong><\/a><\/p>\n

How mobile is lifting South Africa\u2019s GDP<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

South Africa’s iGDP, which measures the Internet\u2019s contribution to overall GDP is at 1.4%, putting it fourth in Africa, behind Senegal, Kenya, Morocco, and neighbour, Mozambique.<\/p>\n","protected":false},"author":10,"featured_media":448,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9882],"tags":[25,7048,7050,7049],"class_list":["post-49878","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-internet","tag-active","tag-igdp","tag-internet-world","tag-mckinsey-company"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/49878","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=49878"}],"version-history":[{"count":10,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/49878\/revisions"}],"predecessor-version":[{"id":49890,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/49878\/revisions\/49890"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/448"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=49878"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=49878"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=49878"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}