ICT market analyst BMI-TechKnowledge says ICT projects in the public sector are likely to come under pressure as the state seeks to trim expenditure.
Its latest research report - SA ICT Government Spending Trends - New Brooms, New Budgets - indicates that government is aiming to save on unnecessary spending in order to maintain an expansion in fiscal policy.
BMI-T believes government will start prioritising key projects as a result of the economic recession that is leading to a fall in tax revenue, which is significantly hampering government's spending capacity. Inevitably, ICT expenditure will be affected and, in turn, important ICT and e-government initiatives could also take strain.
BMI-T enterprise research business manager Lesley-Anne dos Santos says the public sector ICT market is seen by most vendors and service providers as attractive, as it is large and characterised by extensive projects.
She says government ICT expenditure and growth rates are difficult to foretell. This is because some projects could be deferred into the next financial year or even cancelled completely.
However, the total national government ICT expenditure on vendors and service providers is expected to increase from R4.1 billion in 2008 and 2009 to just over R5.6 billion by 2012 and 2013.
Other concerns
However, government has other challenges such as crime, lack of service delivery, spending pressure to improve social development, implementation delays of major projects and cutbacks in government expenditure due to a shortfall in tax collections.
The research firm believes that, in the short-term, certain ICT projects will take a back seat, while those projects relating to the 2010 FIFA World Cup will be put to the forefront. When all the hype of the major soccer event is over and a recovery of South African markets start to emerge, BMI-T predicts a major reshuffle of ICT-related projects.
“Government is currently focusing on improving service delivery and becoming more citizen-centric, but a major internal focus of government for the 2009/10 financial year is to modernise government systems and to improve existing systems and processes,” says Dos Santos.
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