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
      Nersa plan ushers in major shift in South Africa's electricity market

      Nersa plan ushers in major shift in South Africa’s electricity market

      8 December 2025
      Capitec to buy fintech Walletdoc in R400-million deal

      Capitec to buy fintech Walletdoc in R400-million deal

      8 December 2025
      Africa Bitcoin Corporation names Saifedean Ammous as strategic advisor

      Africa Bitcoin Corporation names Saifedean Ammous as strategic advisor

      8 December 2025
      Green shoots are breaking through South Africa's economic static

      Green shoots are breaking through South Africa’s economic static

      8 December 2025
      How Netflix won Hollywood's biggest prize

      How Netflix won Hollywood’s biggest prize

      8 December 2025
    • World
      IBM reportedly close to $11-billion deal to buy Confluent - Arvind Krishna

      IBM reportedly close to $11-billion deal to buy Confluent

      8 December 2025
      Amazon and Google launch multi-cloud service for faster connectivity

      Amazon and Google launch multi-cloud service for faster connectivity

      1 December 2025
      Google makes final court plea to stop US breakup

      Google makes final court plea to stop US breakup

      21 November 2025
      Bezos unveils monster rocket: New Glenn 9x4 set to dwarf Saturn V

      Bezos unveils monster rocket: New Glenn 9×4 set to dwarf Saturn V

      21 November 2025
      Tech shares turbocharged by Nvidia's stellar earnings

      Tech shares turbocharged by stellar Nvidia earnings

      20 November 2025
    • In-depth
      Black Friday goes digital in South Africa as online spending surges to record high

      Black Friday goes digital in South Africa as online spending surges to record high

      4 December 2025
      Canal+ plays hardball - and DStv viewers feel the pain

      Canal+ plays hardball – and DStv viewers feel the pain

      3 December 2025
      Jensen Huang Nvidia

      So, will China really win the AI race?

      14 November 2025
      Valve's Linux console takes aim at Microsoft's gaming empire

      Valve’s Linux console takes aim at Microsoft’s gaming empire

      13 November 2025
      iOCO's extraordinary comeback plan - Rhys Summerton

      iOCO’s extraordinary comeback plan

      28 October 2025
    • TCS
      TCS+ | How Cloud on Demand helps partners thrive in the AWS ecosystem - Odwa Ndyaluvane and Xenia Rhode

      TCS+ | How Cloud On Demand helps partners thrive in the AWS ecosystem

      4 December 2025
      TCS | MTN Group CEO Ralph Mupita on competition, AI and the future of mobile

      TCS | Ralph Mupita on competition, AI and the future of mobile

      28 November 2025
      TCS | Dominic Cull on fixing South Africa's ICT policy bottlenecks

      TCS | Dominic Cull on fixing South Africa’s ICT policy bottlenecks

      21 November 2025
      TCS | BMW CEO Peter van Binsbergen on the future of South Africa's automotive industry

      TCS | BMW CEO Peter van Binsbergen on the future of South Africa’s automotive industry

      6 November 2025
      TCS | Why Altron is building an AI factory - Bongani Andy Mabaso

      TCS | Why Altron is building an AI factory in Johannesburg

      28 October 2025
    • Opinion
      Netflix, Warner Bros deal raises fresh headaches for MultiChoice - Duncan McLeod

      Netflix, Warner Bros deal raises fresh headaches for MultiChoice

      5 December 2025
      BIN scans, DDoS and the next cybercrime wave hitting South Africa's banks - Entersekt Gerhard Oosthuizen

      BIN scans, DDoS and the next cybercrime wave hitting South Africa’s banks

      3 December 2025
      Your data, your hardware: the DIY AI revolution is coming - Duncan McLeod

      Your data, your hardware: the DIY AI revolution is coming

      20 November 2025
      Zero Carbon Charge founder Joubert Roux

      The energy revolution South Africa can’t afford to miss

      20 November 2025
      It's time for a new approach to government IT spend in South Africa - Richard Firth

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

      19 November 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CambriLearn
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • IQbusiness
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Netstar
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SevenC
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • 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
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • 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


    MIP MIP Holdings Richard Firth Sita State IT Agency
    Subscribe to TechCentral Subscribe to TechCentral
    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

    MPs question communications department over bureaucratic delays 

    MPs question communications department over bureaucratic delays 

    6 November 2025
    fibre

    Beyond bandwidth: FNOs should prioritise customer service

    15 July 2025
    Sita hits back at critics, promises faster, automated procurement

    Sita hits back at critics, promises faster, automated procurement

    20 June 2025
    Company News
    Beat the summer heat with Samsung's WindFree air conditioners

    Beat the summer heat with Samsung’s WindFree air conditioners

    5 December 2025
    AI is not a technology problem - iqbusiness

    AI is not a technology problem – iqbusiness

    5 December 2025
    Telcos are sitting on a data gold mine - but few know what do with it - Phillip du Plessis

    Telcos are sitting on a data gold mine – but few know what do with it

    4 December 2025
    Opinion
    Netflix, Warner Bros deal raises fresh headaches for MultiChoice - Duncan McLeod

    Netflix, Warner Bros deal raises fresh headaches for MultiChoice

    5 December 2025
    BIN scans, DDoS and the next cybercrime wave hitting South Africa's banks - Entersekt Gerhard Oosthuizen

    BIN scans, DDoS and the next cybercrime wave hitting South Africa’s banks

    3 December 2025
    Your data, your hardware: the DIY AI revolution is coming - Duncan McLeod

    Your data, your hardware: the DIY AI revolution is coming

    20 November 2025

    Subscribe to Updates

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

    Latest Posts
    Nersa plan ushers in major shift in South Africa's electricity market

    Nersa plan ushers in major shift in South Africa’s electricity market

    8 December 2025
    Capitec to buy fintech Walletdoc in R400-million deal

    Capitec to buy fintech Walletdoc in R400-million deal

    8 December 2025
    Africa Bitcoin Corporation names Saifedean Ammous as strategic advisor

    Africa Bitcoin Corporation names Saifedean Ammous as strategic advisor

    8 December 2025
    IBM reportedly close to $11-billion deal to buy Confluent - Arvind Krishna

    IBM reportedly close to $11-billion deal to buy Confluent

    8 December 2025
    © 2009 - 2025 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}