IT end user spending in South Africa is on pace to reach $24,6-billion in 2009, a 2% decline from 2008 spending of $25-billion, according to Gartner, which forecasts IT spending in the region will return to growth in 2010, with a 6% increase.
“Unlike many developed countries, South Africa did not suffer either a banking or housing crisis; none of its companies was ’bailed out’, although government support of parastatals (companies run for profit but with sole or dominant government shareholding), complicates this assessment,” says William Hahn, principal analyst at Gartner. “The difficulties encountered by the South African economy in the past year were largely due to its balance of important exports and imports, which suffered as the world economy slowed.”
Of the four major segments of IT — hardware, software, IT services and telecommunications — only the telecommunications segment will experience growth in revenue in 2009, but in 2010 Gartner predicts all segments will grow.
The computing hardware segment will experience the steepest decline in 2009, with spending projected to fall 23%. The software segment will show the slightest decrease in 2009, with spending forecast to drop 4%.
“While the global market saw signs of recession in 2009, South Africa was largely resilient to it,” says Hahn. In the third quarter of 2009, South Africa’s economy showed signs of recovery and is forecast to grow 3,3% this year in local currency. In addition, IT spend as a proportion of the national gross-domestic product (GDP) was 9,3% in 2009, which testifies to the high impact of technology in a national market."
Gartner says that, despite current uncertainties, South Africa will be a leading market and a major hub for the entire southern African region, and advises organisations to secure a foothold in the country.
Its role as host of the World Cup in 2010 has brought substantial investment across the economy, including within IT. Some of this investment will hold opportunities right up to the day of the event, and the nation will inherit substantially increased capabilities once it is over.