News From Africa

Localisation is Back in the News in SA

Answering a recent parliamentary Q&A, President Ramaphosa said localisation is one of several tools in the economic reconstruction and recovery plan to improve the dynamism of the economy, promote investment, develop new markets, transform the economy, promote equitable spatial development, and contribute to the development of a capable state. “Localisation is pivotal in stimulating growth and transformation. It is about creating an enabling environment for inclusive growth, deepening the country’s industrialisation base, and creating targeted transformation measures,” he said. “It seeks to expand the economy to include more participants and to ensure that more parts of the population, including women, young people, black South Africans and the rural poor, can contribute to and benefit from growth.”

This view supports the paper “Draft National Policy on Data and Cloud” issued last year by the Department of Communications and Digital Technology. As we reported in previous Newsletters, the push for localisation was blunted by conflicting government policies that strongly supported using cloud computing systems, which are usually not localized in one country. SA has 5 established cloud servers (including AWS and Microsoft), the largest number of such services in Africa. There are several serious criticisms of ‘localisation’, including reduced cyber security, reduced access to the Internet of Things, and sending the wrong message to our partners in the AfCFTA.

Obviously, this issue is still unresolved. Our prediction – expect a renewed push for this flawed policy from the DCDT soon.

Meanwhile, Amazon’s AWS has maintained its global one-third share of the growing cloud infrastructure market for years. At the same time, Microsoft is creeping closer. Last quarter, Microsoft nabbed 22% of public cloud revenue, up from 20% the year before. Google also gained nearly a percentage point. As more industries adopt cloud computing, tech giants are competing on everything from cloud security to quantum computing services.