Amazon’s AWS Pledges R30 Billion Boost to South Africa’s Digital Economy

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  1. Amazon Web Services (AWS) plans to invest R30.4 billion ($2.1 billion) in its cloud infrastructure in South Africa by 2029, with total investments between 2018 and 2029 reaching R6 billion ($421 million).
  2. AWS’s investments are expected to contribute R80 billion ($5.6 billion) to South Africa’s GDP and support over 5,700 full-time equivalent (FTE) jobs at local businesses annually.
  3. Amazon is committed to sustainability initiatives, including powering its operations with 100% renewable energy by 2025 and launching its first operational solar project in South Africa in 2021, which contributes renewable energy to the electricity grid.

Amazon Web Services (AWS), the cloud computing arm of Amazon, has revealed its intentions to invest R30.4 billion ($2.1 billion) into its cloud infrastructure in South Africa by 2029. A recently published Economic Impact Study (EIS) detailed the company’s investments in its AWS Africa (Cape Town) Region since 2018, as well as its projected forecast for constructing, operating, and maintaining its cloud infrastructure in the country.

Between 2018 and 2029, AWS estimates its total investment will reach R6 billion ($421 million). The EIS report indicates that AWS’s investments during this period will contribute approximately R80 billion ($5.6 billion) to South Africa’s gross domestic product (GDP) and support over 5,700 full-time equivalent (FTE) jobs at local businesses each year.

Amrote Abdella, General Manager of AWS Sub-Saharan Africa, emphasized AWS’s commitment to South Africa, noting that one of the company’s foundational services, Amazon Elastic Compute Cloud (Amazon EC2), was developed by engineers in Cape Town back in 2006. Abdella stated, “This report illustrates our ongoing commitment to invest in South Africa and support demand for our world-class technology from customers here and around the world.”

Amazon’s investments have already had a positive impact on numerous local businesses, helped establish training and skilling programs for the local workforce, supported community engagement through various initiatives, and created sustainability initiatives across the country. From 2018 to 2022, AWS invested R15.6 billion ($1.09 billion), including all cash expenses directly attributable to the AWS Africa Region, such as imports of highly specialized and proprietary equipment and software, and in-country spending.

This investment has contributed an estimated R12 billion ($840 million) to the local GDP. Local spending covers capital expenditures on construction labor, materials, and services, as well as recurring operating expenditures on employee and contractor compensation, utility fees, and facilities costs.

AWS’s investments also support jobs at local vendors in the South African data center supply chain, including telecommunications, nonresidential construction, electricity generation, facilities maintenance, and data center operations. The company collaborates with higher education institutions in South Africa, such as Durban University of Technology, Stellenbosch University, and the University of Cape Town, to help prepare the country’s future workforce.

AWS also runs programs like AWS Academy, AWS Educate, and AWS re/Start to provide job training across South Africa. Furthermore, the company is dedicated to supporting the digital literacy goals outlined in South Africa’s “National Digital and Future Skills Strategy” through innovative workforce development programs.

Amazon is committed to becoming a more sustainable business and achieving net-zero carbon emissions across its operations by 2040. As the world’s largest corporate purchaser of renewable energy, Amazon aims to power its operations with 100% renewable energy by 2025, five years ahead of its initial target. In South Africa, AWS launched its first operational solar project in 2021, which contributes renewable energy to the electricity grid.

The solar plant is expected to generate up to 28,000 megawatt-hours (MWh) of renewable energy annually, equivalent to the average annual electricity consumption of over 8,000 South African households. The solar plant is majority-owned by black women and operated by a fully South African-owned company.

AWS has been steadily expanding its presence in South Africa since 2015, when it opened an office in Johannesburg. In 2022, a larger office was opened in Johannesburg to support growing customer demand. In 2017, the Amazon global network expanded into Africa through AWS Direct Connect, and in 2018, AWS established its first cloud infrastructure on the African continent by launching Amazon CloudFront locations in Johannesburg and Cape Town. These locations help organizations securely deliver content with low latency at high transfer speeds.

In 2020, the AWS Africa (Cape Town) Region was launched with three Availability Zones. An AWS Region is a physical location comprising multiple, isolated, and physically separate Availability Zones, which in turn form clusters of logically connected data center infrastructure. Availability Zones may be located up to 100 kilometers apart to protect against natural and human-made disasters that could affect the data centers. The AWS Cape Town Region enables even more developers, startups, and enterprises, as well as government, education, and nonprofit organizations to run their applications and serve end users from data centers located in South Africa.

In addition to AWS, Amazon is reportedly still exploring the possibility of opening a retail marketplace in South Africa, with the group said to be targeting a launch before the end of the year. This move would further expand Amazon’s presence in the region and reinforce the company’s commitment to investing in and supporting South Africa’s digital economy and infrastructure.

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