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Government investments to drive IT spending

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IT spending in the South African government sector totalled $1,47-billion in 2010, largely driven by e-government initiatives. IT spending in the country is expected to grow steadily in 2011 and beyond, with government investments continuing as a key driver.

The is according to the Government Insights division of IDC which adds that, in the wake of the global financial crisis IT spending by governments was fuelled by the need for operational efficient as well as by ongoing cost-cutting measure.
The report predicts that another key organisational priority in 2011 will be regulatory compliance, which has already emerged as an incentive to IT investment.
The South African economy is the most advanced in Africa, showing strong positive growth rates from 2000 to 2009, when the country’s GDP contracted 1,7% partly due to the sharp decline in international trade. However, the FIFA World Cup provided a significant boost to the economy and thrust South Africa in the global limelight during the recession period.
The economy is expected to make a more significant recover in 2011, with GDP growth accelerating to 3,7& owing toe higher domestic and global demand. The infrastructure development programmes undertaken by the government are expected to drive the growth, as is the emergence of a larger middle class.
“IT spending in the government sector in South Africa is expected to show steady positive growth over the 2011-2015 period,” says Jebin George, research analyst 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.”
South Africa still has a long way to go in terms of creating a sophisticated e-government infrastructure. The 2010 United Nations eGovernment Development Index ranks it 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% of GDP in 2010, which was on par with advanced economies and was higher that the European Union average of 50,7%.
According to IDC Government Insights, the South African economy will continue to expand steadily over the coming years, registering an average 4% growth per annum between 2011 and 2015. Virtualisation, security and data management technologies are expected to be the key IT investments.