South Africa’s economic history was focused on mining and agriculture. But since the early 1990s, there has been a shift towards other sectors including wholesale and retail trade, tourism and communications.
Now South Africa is more focused on becoming a knowledge-based economy, with a greater focus on technology, e-commerce and financial and other services.
So, are you looking to get a piece of the pie? Then this blog post delves into the fastest growing industries in South Africa.
We’ll explore the industries leading the charge, analyze the factors propelling this growth, and unveil some of the most promising companies making waves in the market.
The Rise of Tech
1. Communications/IT technology
ICT beats agriculture as one of the fastest growing industries in South Africa. Driven by factors like increased internet penetration, mobile technology adoption, and a growing tech-savvy population. ICT is revolutionizing the way South Africans live, work, and consume.
The country’s cell phone market is also the 4th fastest growing in the world at a rate of 50% per year. Many investment opportunities lie in developing access control systems/security equipment, systems, and software development in the banking and financial services sector, exporting hardware, silicon processing for fiber optics, integrated circuits, and solar cells.
Examples of companies
A prime example is Deimos Cloud, a South African cloud computing company that skyrocketed with a staggering growth rate of over 121%. This phenomenal rise exemplifies the immense potential for cloud-based solutions in a rapidly digitizing economy.
Another noteworthy player is TymeBank, the digital bank that redefined the financial landscape. With a growth rate exceeding 114%, TymeBank has amassed over 8 million customers in just four years, reaching profitability within an impressive timeframe. Their success highlights the growing demand for accessible and innovative financial services.
Beyond Tech: Fastest Growing Industries in South Africa
While ICT undoubtedly takes center stage, South Africa’s growth story extends far beyond. Here’s a closer look at some other thriving
2. Agriculture
Farming remains vitally important to the economy. It is estimated that some 8.5 million people are directly or indirectly dependent on agriculture for their employment and income.
It is one of the fastest growing industries in South Africa known for its vast lands and profitable farming opportunities. Agriculture, including forestry and fisheries, is vital to the country’s economy.
Government supports programmes to promote commercially oriented small-scale farming as well as support for smallholders on land acquired through land reform.
Read Also: How to Register a Business in South Africa
Agro-processing is one of the key industries within this sector, spanning the processing of freshwater aquaculture and mariculture, exotic and indigenous meats, nuts, herbs and fruit. It also involves the production and export of deciduous fruit and wine; confectionary manufacturing and export; and the processing of natural fibres from cotton, hemp, sisal, kenaf and pineapple.
The South African agri-food sector has a number of competitive advantages, making it both an important trading partner and a viable investment destination.
A world-class infrastructure, counter-seasonality to Europe, vast biodiversity and marine resources, and competitive input costs, make the country a major player in the world’s markets.
3. Mining
South Africa is the world’s biggest producer of gold and platinum, is the 4th largest diamond industry in the world and is also a leading nation in base metals and coal.
There is no lack of abundance of mineral resources, resulting in mining as one of the fastest growing industries in South Africa. This untapped market has 40% of the world’s known resources, with an estimated 36,000 tones of undeveloped resources.
South Africa’s strengths include an extremely high level of technical and production expertise, and comprehensive research and development activities. The country also boasts world-class primary processing facilities for gold, platinum, carbon steel, stainless steel and aluminium.
South Africa is also a world leader of new technologies, such as a ground-breaking process that converts low-grade superfine iron ore into high-quality iron units.
Lucrative opportunities exist for downstream processing and adding value locally to iron, carbon steel, stainless steel, aluminium, platinum-group metals and gold. A wide range of materials are available for jewellery, including gold, platinum, diamonds, tiger’s eye and a variety of other semi-precious stones.
4. Manufacturing
South Africa has developed a diversified manufacturing base that has shown its resilience and potential to compete in the global economy. The sector is dominated by industries such as:
- agro-processing
- automotive
- chemicals
- information and communication technology
- electronics
- metals
- textiles
- clothing
- footwear
Experts forecast that the manufacturing industry will nearly double its output in 2025. Making this one of the most exciting sectors to work in.
Manufacturing has always been a dominant industry and are helping the country to become a new potential global powerhouse.
South Africa has production capacity in:
- radio
- television and communication apparatus
- petroleum and plastic products
- wood products
- paper
- publishing and printing
- food, beverages, and motor vehicles
- parts and accessories
5. Tourism
Tourism is regarded as a modern-day engine of growth and is one of the largest industries globally. In addition to being a labour-intensive industry, tourism holds the potential to drive increases in export earnings in a trading environment that is generally less volatile than that of commodity exports.
The World Travel and Tourism Council (WTTC) indicated that travel and tourism in South Africa, directly employs more people than the mining, communication services, automotive manufacturing and chemicals manufacturing sectors.
There are many opportunities in tourism, as it is one of the fastest growing industries in South Africa. Some investment and business opportunities include:
- infrastructure development
- accommodations like hotels, boutique hotels, lodges and resorts
- adventure
- eco-adventures
- sports
- conference and cultural tourism
- leisure complexes and world-class golf courses
- attractions and activity-based tourism
- museums and heritage: cultural music, arts festivals and events
South Africa continues to focus on business tourism as an area with significant growth potential. The country is among the top 15 long-haul business events destinations globally. And it’s the premier business events destination in Africa.
Their advanced infrastructure combined with magnificent scenic beauty, rich biodiversity, sunny climate, cultural diversity and a reputation for delivering value for money experiences, have made it one of the world’s fastest growing tourism destinations.
6. Textiles & apparel
Textiles and apparel is our 2nd largest source of tax revenue. It is also the 3rd largest employer in the manufacturing sector and our 11th largest export.
With support from African Growth and Opportunity Act (AGOA). There are many opportunities within the textile and apparel industry in South Africa. Everything from natural and synthetic fibre production to non-woven fabric, spinning, weaving, tufting, knitting, dyeing, and finishing.
The Clothing and Textile Competitiveness Programme (CTCP) is a program aimed at improving South Africa’s global competitiveness. It covers all aspects of business operations, from the very specific to the very generic.
7. Wholesale/retail trade
The retail market is one of South Africa’s biggest, most affluent and important sectors. The fastest growing segments including textiles and clothes, hardware, general stores, household goods, pharmaceuticals, and food and drinks.
This market is promising medium to long-term growth due to the growing youthful demographic of 55 million people, as well as from its position as a springboard to the rest of sub-Saharan Africa.
Statistics SA produces a monthly survey of the retail trade industry, covering various retail trade enterprises.
8. Real Estate, finance & business services
South Africa’s financial sector is very sophisticated despite the country’s “emerging market” status. The strong financial sector is built on a foundation of concrete legal and physical infrastructures that promise stable economic growth.
South Africa has recently survived a recession and has come out in a pretty solid position. Financial, real estate and business sector services are the pillar of South Africa’s economic growth. That’s why it’s on our list as one of the fastest growing industries in South Africa.
Many domestic and foreign institutions already provide a full range of services from commercial and retail, to merchant banking, mortgage lending and insurance, as well as investments. When compared to even the best-industrialized countries, South Africa’s banking sector is a tough competitor.
South Africa’s financial services sector boasts dozens of domestic and foreign institutions providing a full range of services including commercial, retail and merchant banking, mortgage lending, insurance and investment.
The South African banking system is well developed and effectively regulated. It comprises of the Central Bank, a few large, financially strong banks and investment institutions, and a number of smaller banks.
So, in South Africa investment and merchant banking is competitive.
The country’s banking sector compares favourably with those of industrialised countries. Many foreign banks and investment institutions have set up operations in South Africa over the past decade. Electronic banking facilities are extensive, with a nationwide network of ATMs and internet banking facilities available.
Factors Fueling the Growth in South Africa
Several key factors contribute to the remarkable growth across South Africa’s business landscape:
- Government initiatives: The South African government actively promotes entrepreneurship and innovation through various initiatives. These include funding programs, business incubators, and streamlined regulations.
- Growing middle class: South Africa’s burgeoning middle class boasts increased disposable income, creating a strong consumer base that fuels demand for various goods and services.
- Urbanization: As more South Africans migrate to urban centers, the demand for innovative solutions in areas like housing, transportation, and technology intensifies.
- Digital transformation: The rapid adoption of digital technologies across industries is streamlining operations, fostering innovation, and creating new business models.
- Increased regional integration: South Africa’s participation in regional trade agreements like the African Continental Free Trade Area (AfCFTA) opens doors to a wider market and fosters economic collaboration.
Companies to Watch
Staying updated on South Africa’s fastest-growing businesses is crucial for investors and those seeking inspiration. Here are a few companies generating significant buzz:
- Yoco: A leading fintech company providing mobile point-of-sale solutions, empowering small and medium-sized businesses to accept digital payments.
- SweepSouth: This innovative on-demand cleaning service platform connects customers with reliable cleaning professionals, disrupting the traditional domestic service industry.
- MUNICIPAL IQ: A data science company specializing in smart city solutions, helping municipalities optimize resource allocation and improve service delivery.
- Naked Insurance: This disruptive insurance company leverages technology to offer affordable and transparent insurance products, shaking up the traditional insurance landscape.
- LifeCheq: A pioneering health-tech company providing affordable and accessible healthcare solutions through a telemedicine platform.
These are just a few examples, and the South African business landscape is teeming with exciting ventures waiting to be discovered.
