Cape Town and Johannesburg are rapidly positioning themselves as Africa’s Silicon Valley.
Malcolm Libera – BusinessTech
According to New World Wealth, a Sandton-based wealth intelligence firm, and Shaun Richards, founder and CEO of local software developer Platform45, these two South African cities are emerging as key players in the continent’s tech revolution.
Richards believes that technology is not just redefining traditional tech hubs but also fostering the rise of new ones.
Cape Town, Johannesburg, and Nairobi in Kenya are at the forefront of this transformation, opening up new opportunities for innovation.
The “Africa Wealth Report 2024” predicts a 65% increase in Africa’s millionaire population over the next decade, driven by growth in sectors like fintech, software development, and green tech.
Cape Town dubbed the “leading light in Africa’s fintech space,” is experiencing a significant influx of tech entrepreneurs from across the continent.
The city is home to notable tech companies such as Yoco and Takealot.com, underscoring its status as a thriving tech hub.
On the other hand, Johannesburg serves as the headquarters for many companies listed in the JSE Top 40.
The city excels in IT infrastructure, tech support, and software development, with Sandton and Rosebank emerging as hotspots for tech startups.
These business nodes attract local talent and foster an environment conducive to innovation and growth.
At the end of last year, The Department of Home Affairs (DHA) gazetted the remote work visitor visa and the new points-based system for work visas.
“The gazetting of all required elements for the remote work visitor visa and the new points-based system for work visas amounts to the most progressive and pro-jobs regulatory reform South Africa has seen in decades.
According to the department, the remote work visa enables highly-paid individuals who are employed abroad and thus do not compete with local workers to spend their valuable foreign currency in South Africa, pay value-added tax into the local fiscus, and buy South African goods and services from local producers.
These highly paid individuals include those in the tech space, which has a substantial impact on South Africa’s economy.
Andrew Amoils, head of research at New World Wealth, notes that technology is one of the country’s key sectors for wealth creation.
Currently, around 8% of South African wealth stems from the tech sector, a figure projected to exceed 30% by 2045.
In terms of wealth distribution, Johannesburg boasted over 800 tech US dollar millionaires as of December, while Cape Town had more than 450.
This millionaire population is expected to grow significantly as both cities continue to attract tech entrepreneurs and investors.
Interestingly, Former Gauteng Premier David Makhura committed to turning the province into a technological hub in 2019.
His vision includes expanding the Gauteng Innovation Hub, which forms a robust innovation ecosystem with public universities, research institutes, private sector innovation centres, and eKasi Labs.
The goal was to “evolve Gauteng into Africa’s Silicon Valley,” spearheading the growth of the digital economy.
Cape Town’s appeal to digital nomads adds another layer to its tech-friendly ecosystem.
The demand for remote work opportunities, particularly in the tech sector, remains strong despite an overall decline in work-from-home roles across South Africa.
With government support, a growing number of tech millionaires, and high demand for tech talent, Cape Town and Johannesburg are on track to become Africa’s version of Silicon Valley.
The collaboration between public policies and private initiatives continues to strengthen South Africa’s position on the global tech map, attracting talent and investment from around the world.
