Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News
      The missing number in Vodacom's annual report - Nkosana Makate please call me

      The missing number in Vodacom’s annual report

      12 June 2026
      How Sixty60 turned lockdown luck into a lasting lead

      How Sixty60 turned lockdown luck into a lasting lead

      12 June 2026
      SABC+ buckles as 477 000 fans pile in for Bafana opener

      SABC+ buckles as 477 000 fans pile in for Bafana opener

      12 June 2026
      The dizzying scale of Elon Musk's fortune

      The dizzying scale of Elon Musk’s fortune

      12 June 2026
      How a tiny SA team is using AI to challenge accounting's big boys - Tayla Dandridge stub

      How a tiny SA team is using AI to challenge accounting’s big boys

      12 June 2026
    • World
      Trouble at Xbox

      Trouble at Xbox

      11 June 2026
      Meta declares war on Israeli spyware firm

      Meta declares war on Israeli spyware firm

      8 June 2026
      Meta takes on OpenAI and Anthropic in enterprise AI

      Meta takes on OpenAI and Anthropic in enterprise AI

      4 June 2026
      AI demand sparks 'chipflation' warning

      AI demand sparks ‘chipflation’ warning

      4 June 2026
      Astronomers discover exoplanets with magnetic fields

      Strange winds reveal magnetic fields on distant ‘hot Jupiters’

      2 June 2026
    • In-depth
      AI boom sparks rally, frenzy and fear

      AI boom sparks rally, frenzy and fear

      11 June 2026
      Every plug-in hybrid on sale in South Africa, ranked by price - Lamborghini Temerario

      Every plug-in hybrid on sale in South Africa, ranked by price

      7 June 2026
      What Wi-Fi 8 will mean for wireless networks

      What Wi-Fi 8 will mean for wireless networks

      1 June 2026
      Alfa's electric rebel - Alfa Romeo Junior Elettrica Veloce

      Alfa’s electric rebel

      29 April 2026
      Africa switches on as Europe dims the lights

      Africa switches on as Europe dims the lights

      9 April 2026
    • TCS
      Watts & Wheels S1E5: 'A Bentley of the bush and a car that swims'

      Watts & Wheels S1E5: ‘A Bentley of the bush and a car that swims’

      8 June 2026
      TCS | Charge's R1.8-billion bet on an off-grid EV future - Charge chairman Joubert Roux

      TCS | Charge’s R1.8-billion bet on an off-grid EV future

      18 May 2026
      TCS+ | The Up&Up Group on the hidden cost of AI - Jason Harrison

      TCS+ | The Up&Up Group on the hidden cost of AI

      13 May 2026
      Michael Rossouw

      TCS+ | The retirement decision most South Africans get wrong

      6 May 2026
      TCS | The Cape Town start-up listening for TB with AI - Braden van Breda

      TCS | The Cape Town start-up listening for TB with AI

      4 May 2026
    • Opinion
      The clock is ticking on South African banks' biggest advantage - Pambos Soteriades

      The clock is ticking on South African banks’ biggest advantage

      9 June 2026

      Clashing judgments leave South Africa’s crypto law unsettled

      2 June 2026
      The clock is ticking on South African banks' biggest advantage - Pambos Soteriades

      The trap inside South Africa’s banking MVNO boom

      1 June 2026
      The hidden cost of social media age bans is everyone's privacy - Petrus Potgieter

      The hidden cost of social media age bans is everyone’s privacy

      29 May 2026
      Treasury's crypto crackdown is a betrayal of Mandela's promise - Duncan McLeod

      Treasury’s crypto crackdown is a betrayal of Mandela’s promise

      22 May 2026
    • Company Hubs
      • 1Stream
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • Ascent Technology
      • AvertITD
      • BBD
      • Braintree
      • CallMiner
      • CambriLearn
      • CM Telecom
      • Contactable
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • HOSTAFRICA
      • Incredible Business
      • iONLINE
      • IQbusiness
      • Iris Network Systems
      • Kaspersky
      • LSD Open
      • Mitel
      • NEC XON
      • Netstar
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SevenC
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Telviva
      • Tenable
      • Vertiv
      • Videri Digital
      • Vodacom Business
      • Wipro
      • Workday
      • XLink
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Financial services
      • HealthTech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Policy and regulation
      • Public sector
      • Retail and e-commerce
      • Satellite communications
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » Sections » Public sector » It’s time for a new approach to government IT spend in South Africa

    It’s time for a new approach to government IT spend in South Africa

    The government wastes billions on IT. Richard Firth argues smarter, private-sector oversight could stop the rot.
    By Richard Firth19 November 2025
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp
    It's time for a new approach to government IT spend in South Africa - Richard Firth
    The author, Richard Firth

    The South African government spends billions of rand annually on technology and infrastructure, yet citizen-facing systems are well-known for being inadequate for the task.

    From chronic billing issues in municipalities like the City of Johannesburg to cries of “offline” at every home affairs office in the country, South Africans are left frustrated by systems that should be making their lives easier. Instead of enabling efficiency and transparency, many of these investments result in outdated, overpriced and poorly integrated solutions that fail to deliver real value to citizens.

    It is incredible that in this modern era, the government still uses a laminated piece of paper as a driving licence, and even if you ignore how outdated this is, the printer used to print this piece of paper costs hundreds of millions of rand.

    Government often pays well above private sector benchmarks for the same or similar solutions

    The cost of the printer alone should have allowed the government to contract a local supplier to build the entire driver’s licence system, including a printer, at a fraction of the cost – and deliver a better service to its citizenry. I say this with some authority, as MIP currently touches the lives of approximately 24 million South Africans with at least one of our financial services platforms, and we never see prices like the government gets quoted on in the press for building IT systems.

    This has resulted in a never-ending cycle of inefficient IT expenditure. Every system that doesn’t work properly needs to be replaced with another that promises to perform the task better, but which usually costs even more. While this might not be the most efficient way to do things, it would still be appropriate if government was following the same kind of procurement processes a private company would, where cost efficiency and support were two of the primary considerations.

    Instead, government often pays well above private sector benchmarks for the same or similar solutions. For example, software licensing, infrastructure projects and enterprise systems should be cheaper for government as a result of massive volumes, but a lack of competitive benchmarking often leads to inflated costs rather than savings.

    Paying too much

    The current bureaucratic processes followed by government prioritise compliance over cost efficiency, and many of the systems purchased by government over the years come from large international vendors that charge in US dollars. These companies often have entrenched contracts, allowing them to dictate terms, leaving government with very little room to negotiate better pricing.

    In other words, government lacks the commercial leverage and agility of the private sector, which would never pay the same prices for their solutions. Private companies routinely benchmark vendor pricing, negotiate aggressively and leverage scale. They usually have strong procurement offices, CIO oversight and regularly do cost/benefit analyses to keep prices competitive.

    Read: Tech push helps Sars deliver R78-billion revenue boost

    Government, on the other hand, seems to lack the ability to evaluate, and instigate, the fair market value of tech solutions. Rather than focusing on how much government pays for its IT solutions, we should rather be asking who is responsible for vetting pricing and how that can be improved.

    The State IT Agency is supposed to drive efficiencies, keep costs under control and ensure value for money in government tech procurement, but several structural and systemic issues prevent it from keeping costs down. Sita operates under strict public procurement rules, which prioritise compliance and process over cost-effectiveness. This slows down procurement and often leads to government paying “list price” instead of negotiated, market-competitive rates.

    State IT Agency - SitaUnlike the private sector, Sita doesn’t always leverage its scale to push for bulk discounts across departments. Vendors know that processes are rigid and can price solutions higher without as much pushback. In addition, many departments are locked into long-term contracts with major vendors for critical systems, so exiting or renegotiating these agreements is expensive and difficult and costs remain inflated.

    A new approach to pricing oversight

    The private sector benchmarks aggressively, comparing vendor pricing, pushing for cost reductions and demanding a return on investment. If the same discipline was applied in the public sector, taxpayers could see significant savings.

    Instead of trying to manage everything in-house, government should leverage the experience of private sector companies to lower its tech costs. For example, any solutions priced over R3-million should require independent vetting, preferably by people who have implemented similar systems before. This could easily be achieved through the creation of a cross-sector overview committee to benchmark and validate costs.

    Read: Malatsi promises to tear up old policy playbook

    From basic infrastructure to advanced technology, government will continue to pay too much without systemic change. Overspending will continue to erode budgets and taxpayer trust unless a smarter approach is taken, and the establishment of a cross-sector overview committee could free up billions for service delivery and development priorities. Partnering with private sector experts can help secure fair pricing, avoid waste and ensure solutions deliver true value.

    • The author, Richard Firth, is CEO of MIP Holdings
    Follow TechCentral on Google News Add TechCentral as your preferred source on Google


    MIP MIP Holdings Richard Firth Sita State IT Agency
    WhatsApp YouTube
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous Article‘Pay later’ growth is set to lift Black Friday sales, says Absa
    Next Article Dis-Chem goes digital

    Related Posts

    Sita, Sars rubbish reports they were hacked

    Sita, Sars rubbish reports they were hacked

    25 May 2026
    Cabinet approves new permanent Sita board, ending years of turmoil - State IT Agency

    Cabinet approves new permanent Sita board, ending years of turmoil

    8 May 2026
    South Africa planning big overhaul of public sector IT - State IT Agency Sita

    South Africa planning big overhaul of public sector IT

    23 April 2026
    Company News
    When jammers kill the signal, AI goes blind too - Rory Atkinson Orange Logistics Sigfox South Africa

    When jammers kill the signal, AI goes blind too

    12 June 2026
    Workday Horizon shows SA firms how to make AI deliver - Kiv Moodley

    Workday Horizon shows SA firms how to make AI deliver

    12 June 2026
    Hisense, Makro team up for winter laundry promotion

    Hisense, Makro team up for winter laundry promotion

    12 June 2026
    Opinion
    The clock is ticking on South African banks' biggest advantage - Pambos Soteriades

    The clock is ticking on South African banks’ biggest advantage

    9 June 2026

    Clashing judgments leave South Africa’s crypto law unsettled

    2 June 2026
    The clock is ticking on South African banks' biggest advantage - Pambos Soteriades

    The trap inside South Africa’s banking MVNO boom

    1 June 2026

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Latest Posts
    The missing number in Vodacom's annual report - Nkosana Makate please call me

    The missing number in Vodacom’s annual report

    12 June 2026
    How Sixty60 turned lockdown luck into a lasting lead

    How Sixty60 turned lockdown luck into a lasting lead

    12 June 2026
    SABC+ buckles as 477 000 fans pile in for Bafana opener

    SABC+ buckles as 477 000 fans pile in for Bafana opener

    12 June 2026
    The dizzying scale of Elon Musk's fortune

    The dizzying scale of Elon Musk’s fortune

    12 June 2026
    © 2009 - 2026 NewsCentral Media
    • Cookie policy (ZA)
    • TechCentral – privacy and Popia

    Type above and press Enter to search. Press Esc to cancel.

    Manage consent

    TechCentral uses cookies to enhance its offerings. Consenting to these technologies allows us to serve you better. Not consenting or withdrawing consent may adversely affect certain features and functions of the website.

    Functional Always active
    The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
    Preferences
    The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
    Statistics
    The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
    Marketing
    The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
    • Manage options
    • Manage services
    • Manage {vendor_count} vendors
    • Read more about these purposes
    View preferences
    • {title}
    • {title}
    • {title}