The changes and challenges to the macro landscape had presented the following opportunities for investment. Some of the highlight sectors and transactions closed over the past year include:
Technology, Media, and Telecoms: South Africa has one of the largest information and communications technology (ICT) markets in Africa and is an increasingly important contributor to the economy, contributing around 8% to South Africa’s GDP.
The country has clear constraints within the sector including high data costs, low tax incentives (Section 12J being killed), tech skills gaps, digital inequality and exclusion in remote areas, and increasing cyberattacks.
During the pandemic, technology and internet connectivity have helped to sustain business continuity, keep children in education and ensure online access to essential goods and services.
The covid-19 lockdown increased the adoption of online business processes, remote working, e-learning, e-commerce, e-banking, epayment services, e-insurance, telemedicine, and virtual events.
This resulted in a higher demand for technologies and IT services that support these activities, some of which are here to stay. The lockdowns propelled e-commerce forward by at least five years according to some sources.
Further, the value of e-commerce transactions in South Africa is expected to surge c.150% to R225bn by 2025 in response to the shift in consumer behaviour brought about by the Pandemic, with 37% of consumers already having increased their online shopping activity.