SA's ICT market weathers growth slowdown

Simnikiwe Mzekandaba
By Simnikiwe Mzekandaba, IT in government editor
Johannesburg, 12 May 2022
Mark Walker, associate vice-president for Sub-Saharan Africa at IDC. (Photo: Karolina Komendera, ITWeb Brainstorm)
Mark Walker, associate vice-president for Sub-Saharan Africa at IDC. (Photo: Karolina Komendera, ITWeb Brainstorm)

While SA’s macro-economic outlook is a bit dire, the local ICT market is still growing.

The growth, however, is not at the rate that one would like to see, said Mark Walker, associate vice-president for Sub-Saharan Africa at IDC.

Walker was speaking at last night’s IDC Directions 2022 for Sub-Saharan Africa event, which revealed the latest digital acceleration trends and predictions on ICT spending in SA.

He told the audience that overall, the ICT market is looking at growth of between 4% and 6% in 2022, boosted by significant growth in IT spending.

“It’s differentiated across ICT, IT or telecoms services, with the areas of opportunity being in the services and software space,” he said.

With all the challenges SA currently faces, ranging from low economic growth and high unemployment, Walker strongly believes the technology sector, as an enabler, can help solve a lot of these problems.

“This is from public sector right through the commercial environment,” he noted. “The good news is everybody needs technology and that’s not going to change.”

Growth projections

According to Walker, IDC predicts that ICT (including security appliances and wearables) spending in SA will grow at 6.5% to surpass $27.5 billion (R446.3 billon) in 2022.

In terms of IT spending, he said it is forecast to grow by 7.6% in 2022 to reach $14.4 billion (R233.8 billion).

On telecoms spending, the predictions show that growth will continue to be steady at 4.9% and reach $11.3 billion (R183.3 billion).

“Traditional telco providers are all very focused on moving from being a traditional telco – providing connectivity, services, etc – to determining the [OTT] services to add value and how to become a digital services provider. Is it broadcast, is it media, is it content, or is it access… a lot of companies are looking to figure out that paradigm.”

The IDC analyst also noted that spending on devices (PCs, mobile phones, laptops, tablets, printers, monitors, photo copy machines and wearables) is still growing.

“We had a very good year last year, and this is all because everybody was working from home and needed a device. This year, the growth has settled down but there’s hope that it will grow again next year.”

Enterprise IT spending will continue its growth momentum in 2022, he indicated. IDC forecasts it will grow at 6.4% to reach $14.3 billion (R232.2 billion) during the period under review.

“In the case of enterprise IT, much of the spend was redirected over the last two years to provide the connectivity that we saw in the devices; for instance, connectivity to homes, and communication services like Teams, Zoom or any collaboration type software.

“Going forward, there’s going to be a lot of focus on cyber security, AI and other emerging technologies – they’re going to be dominant over the next year or two.

“In the last two years, business models that were always theoretical have been proven…so we’ll see more spend in technologies that enabled that.”