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IDC: South Africa ups 2011 IT spending

Posted: 02 May 2011     Print Version  Bookmark and Share

Keywords:government IT investments  2011 IT spending  eGovernment initiatives 

The International Data Corporation (IDC) has predicted that eGovernment initiatives in South Africa would push the country's government IT spending this year beyond the Rs.6,712.33 crore ($1.47 billion) recorded in 2010.

Market research company IDC, through a report of its government insights division, also said virtualisation, security and data management technologies would be the key IT investment areas during the period from 2011-2015, as South Africa's economy is seen to expand steadily during the period with a four per cent average annual growth rate.

The IDC report, entitled "Government Insights Technology Selection: South Africa Public Sector Insights and 2011–2015 IT Spending Forecast," predicted that South Africa's 2011 gross domestic product (GDP) growth rate would accelerate to 3.7 per cent from previous years' levels due to higher domestic and global demand for its products.

From 2000�2009, South Africa experienced a 1.7 per cent slide in GDP, caused in part by a sharp drop in international trade, but remained as the most advanced economy in Africa with strong positive growth rates, the IDC report showed.

This year's GDP acceleration represents a significant recovery for South Africa whose 2010 government expenditures stood at 53.1 per cent of GDP—higher than the European Union average of 50.7 per cent and at par with other advanced economies.

However, South Africa is yet to create a sophisticated eGovernment infrastructure, having been ranked 97th out of 190 states—with an index value of 0.4306 and below the world average of 0.4406—by the 2010 United Nations eGovernment Development Index.

"IT spending in the government sector in South Africa is expected to show steady positive growth over the 2011-2015 period," said Jebin George, IDC's Research Analyst for Middle East, Africa, and Turkey. "Achieving operational efficiency, better service provisioning and lower costs through automation will be key priorities for the sector in 2011."

George said that in the wake of the global financial crisis, IT spending by government entities was fuelled by the need for operational efficiency as well as by on-going cost-cutting measures.

Because of these, he said that regulatory compliance will be another key organisational priority in 2011 and remain as an incentive to IT investment.

He added that hosting the 2010 FIFA World Cup provided a significant boost to the South African economy and pushed the country into the global limelight, thus enticing investments, during the recession period.

In addition, he explained that both the South African government's infrastructure development programmes and the emergence of a larger middle class due to its black economic empowerment (BEE) programme would fuel the country's growth.

The IDC report not only provides an overview of the South African government sector and its requirements in terms of IT but also presents a detailed overview of IT spending trends and forecasts for South Africa's government sector as well as nine product and service categories over the forecast period.

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