Government investments to drive IT spending in South Africa in 2011

By eGov Innovation Editors | Apr 14, 2011

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JOHANNESBURG – IT spending in the government sector in South Africa totaled $1.47 billion in 2010, largely on the back of egovernment initiatives, according to a recent report by market research firm IDC.

The Government Insights division of IDC expects IT spending in the country to grow steadily in 2011 and beyond, with government investments continuing as the key driver.

IDC said in the wake of the global financial crisis, IT spending by government entities was fueled by the need for operational efficiency, as well as by ongoing cost-cutting measures. It predicts that another key organizational priority in 2011 will be regulatory compliance, which has already emerged as an incentive to IT investment.

The South African economy, it explained further, is the most advanced in Africa, showing strong positive growth rates from 2000 to 2009, when the country's gross domestic product (GDP) contracted 1.7 percent, partly due to a sharp decline in international trade. However, hosting the 2010 FIFA World Cup provided a significant boost to the entire economy and thrust South Africa into the global limelight during the recession period.

"IT spending in the government sector in South Africa is expected to show steady positive growth over the 2011–2015 period," says Research Analyst Jebin George for IDC 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."

The 2010 United Nations eGovernment Development Index ranks South Africa 97th out of 190 states, with an index value of 0.4306, behind the world average of 0.4406. However, South Africa's government expenditure stood at 53.1 percent of GDP in 2010, which was on par with advanced economies, and was even higher than the European Union average of 50.7 percent.