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Local, provincial government plan to spend R6,4bn by 2011

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Local and provincial government ICT spend is set to rise from 2007's R5,6-billion to R6,4-billion this year, out of a total government ICT budget of R35-billion.

This is according to BMI-TechKnowledge's latest report: ICT Market Analysis and Opportunities in Provincial and Local Government.
With over R5,6-billion spent on ICT by the South African provincial and local government last year, BMI-T's research provides insight into emerging trends in government's ICT spending patterns, in-depth analysis of the drivers and inhibitors of ICT spend, and examines the big deals that will shape this market in the years to come.
Lesley-Anne Dos Santos, BMI-T Analyst, says: "The total ICT spend of provincial government is expected to increase from R3,4-billion in 2007 to R3,9-billion in 2010/11 at a CAGR of 4.3%. Local government ICT expenditure is also set to increase, from 2,2-billion in 2007/08 to R2,5-billion in 2010/11".
This excludes telecoms capex spending by local government, which would add significantly to the numbers, especially if various municipal broadband networks succeed in getting off the ground. These projects are looking increasingly uncertain, and hence a scenario-based approach needs to be taken when forecasting expenditure on them.
As a whole the South African government had budgeted R35-billion to spend on ICTs over the 2007 to 2008 financial year in a campaign to improve customer service. The implementation of various e-government initiatives are already under way in national, provincial and local government, with further initiatives planned in education, health and administration.
"However no good plan goes unpunished," says Sheldon Neilson, BMI-T Analyst and co-author of the report. "For example, the troubled launch of eNatis last year provides basis for a skeptical view.
"But it must be pointed out that with the maladministration, lengthy delays and frustration on the ground aside, eNatis is a successful system today with transactions handled having doubled to 600 000 monthly, with near double the budgeted R357-million spent."
Major issues faced by many local municipalities include poor administration, the misappropriation of funds and the retention of skilled staff. Poor financial records and insufficient internal controls compound these issues.
According to BMI-T, provincial governments are dealing with similar issues; however their financial records are more satisfactory than local government.
"Provincial and local governments are still extremely decentralised," says Dos Santos. "However, what may appear to be isolated trends should not be overlooked; As can be seen with the current rollout of open source software solutions, the potential for government-wide adoption remains and it is therefore essential for vendors to formulate strategies that encompass activities across all levels of government."