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
      MTN's Iran problem: can't stay, can't leave

      MTN’s Iran problem: can’t stay, can’t leave

      17 March 2026

      Post Office limps on – for now

      17 March 2026
      AI chip boom is pushing up costs for telecoms operators

      AI chip boom is pushing up costs for telecoms operators

      17 March 2026
      Samsung's trifold gamble ends in retreat

      Samsung’s trifold gamble ends in retreat

      17 March 2026
      SA banks race to scale AI and cloud as challenger threat intensifies

      SA banks race to scale AI and cloud as challenger threat intensifies

      17 March 2026
    • World
      Peter Thiel's secretive Rome conference draws Church attention

      Peter Thiel’s secretive Rome conference draws Church attention

      16 March 2026
      Musk launches Macrohard in cheeky nod to Microsoft - Elon Musk

      Musk launches Macrohard in cheeky nod to Microsoft

      12 March 2026
      Europe is building an alternative to Microsoft Office

      Europe is building an alternative to Microsoft Office

      11 March 2026
      Microsoft bets on Anthropic as it loosens ties with OpenAI

      Microsoft bets on Anthropic as it loosens ties with OpenAI

      10 March 2026
      World hit by worst oil shock since the 1970s

      World hit by worst oil shock since the 1970s

      9 March 2026
    • In-depth
      The last generation of coders

      The last generation of coders

      18 February 2026
      Sentech is in dire straits

      Sentech is in dire straits

      10 February 2026
      How liberalisation is rewiring South Africa's power sector

      How liberalisation is rewiring South Africa’s power sector

      21 January 2026
      The top-performing South African tech shares of 2025

      The top-performing South African tech shares of 2025

      12 January 2026
      Digital authoritarianism grows as African states normalise internet blackouts

      Digital authoritarianism grows as African states normalise internet blackouts

      19 December 2025
    • TCS
      TCS+ | Vox Kiwi: a wireless solution promising a fibre-like experience - Theo van Zyl

      TCS+ | Vox Kiwi: a wireless solution promising a fibre-like experience

      13 March 2026
      TCS+ | Flipping the narrative on AI in the Global South - Josefin Rosén

      TCS+ | Flipping the narrative on AI in the Global South

      13 March 2026
      TCS | Sink or swim? Antony Makins on how AI is rewriting the rules of work

      TCS | Sink or swim? Antony Makins on how AI is rewriting the rules of work

      5 March 2026
      TCS+ | Bolt ups the ante on platform safety - Simo Kalajdzic

      TCS+ | Bolt ups the ante on platform safety

      4 March 2026
      Watts & Wheels S1E4: 'We drive an electric Uber'

      Watts & Wheels S1E4: ‘We drive an electric Uber’

      10 February 2026
    • Opinion
      South Africa's energy future hinges on getting wheeling right - Aishah Gire

      South Africa’s energy future hinges on getting wheeling right

      10 March 2026
      Hold the doom: the case for a South African comeback - Duncan McLeod

      Apple just dropped a bomb on the Windows world

      5 March 2026
      VC's centre of gravity is shifting - and South Africa is in the frame - Alison Collier

      VC’s centre of gravity is shifting – and South Africa is in the frame

      3 March 2026
      Hold the doom: the case for a South African comeback - Duncan McLeod

      Hold the doom: the case for a South African comeback

      26 February 2026
      The AI fraud crisis your bank is not ready for - Andries Maritz

      The AI fraud crisis your bank is not ready for

      18 February 2026
    • Company Hubs
      • 1Stream
      • 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
      • HOSTAFRICA
      • Incredible Business
      • iONLINE
      • IQbusiness
      • Iris Network Systems
      • LSD Open
      • Mitel
      • 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
      • 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 » Worries over austerity and government IT spending

    Worries over austerity and government IT spending

    Some in government say ICT spending will not be reduced, despite the parlous state of the country’s finances.
    By Nkosinathi Ndlovu6 December 2023
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp

    Finance minister Enoch Godongwana presented the grim reality of South Africa’s poor fiscal position in his medium-term budget speech last month, announcing spending cuts of R200-billion over the next four years.

    These austerity measures will likely have an impact on government IT spending, although there has been no formal directive in this regard. With the potential for less spend on ICT, the industry could feel the impact of the austerity measures — particularly those companies that have a large reliance on public sector contracts.

    “Total ICT spend for South Africa is estimated at US$30-billion for next year. Government is only second to the financial sector as the biggest spender in the industry,” said Mark Walker, associate vice president for sub-Saharan Africa at International Data Corp (IDC).

    The projects that give the best value for money and the most benefit to society should take priority

    “If government cuts spending, there will definitely be knock-on effects downstream that will affect IT service providers as well as hardware and software vendors,” Walker said. He added that government is going to have to be prudent in how it goes about cutting costs. “The projects that give the best value for money and the most benefit to society should take priority.”

    But eliminating one project over another is not the only way the state can reduce spending on technology. In certain instances, money can be saved by rooting out inefficiencies. In a recent interview with TechCentral, BCX CEO Jonas Bogoshi highlighted some of the positive aspects that reduced spending may have on government’s IT function.

    “Depending on how we look at it, it may actually be the right thing for government today because typically when you buy your own infrastructure you create inefficiencies. You most likely use only 80% of what you paid for because you have to overbuild just in case you need it,” said Bogoshi.

    Government IT spending

    Part of the solution, he said, is for government’s on-premises IT function to be migrated to the cloud. BCX has already deployed on-premises solutions to about 70 municipalities that it now wants to move to the cloud. If that happens, these municipalities will have less need to spend money on hardware, while the staff complement required to manage their systems will be reduced as well.

    “Cloud is a different ballgame because you don’t have to procure or manage physical infrastructure, so the costs are much lower. We are partnering with government to develop a model where we can work within the constraints of the fiscus.”

    Government has the potential to realise significant longer-term savings if it chooses to focus on a state-wide cloud migration effort. However, hardware vendors are likely to suffer if this happens.

    Read: South Africa’s ‘no good news’ mini budget

    “Many hardware vendors might be expecting state entities to replenish ageing equipment bought before or during the Covid-19 pandemic,” said Walker. On the other hand, software vendors, consultants and cloud solutions providers will be needed to implement the modernisation effort since government does not have the capacity to implement these projects itself, he added.

    BCX CEO Jonas Bogoshi

    But some in government are adamant ICT spending will not be reduced, despite the parlous state of the country’s finances. The department of public service & administration (DPSA), which houses the Government IT Officers Council, or Gitoc, told TechCentral that there is “currently no specific policy or directive in place to decrease government ICT spending”.

    “There is no decision to slow down government spending on ICT,” said Moses Mushi, director of communications at the DPSA. “Any cost containment measures taken are temporary and align with broader spending and austerity measures in government.”

    The State IT Agency, which is responsible for a significant amount of public sector IT procurement, did not respond to multiple requests for comment.  — © 2023 NewsCentral Media

    Get breaking news alerts from TechCentral on WhatsApp

    Follow TechCentral on Google News Add TechCentral as your preferred source on Google


    BCX Gitoc IDC Jonas Bogoshi Mark Walker
    WhatsApp YouTube
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleThe case against bitcoin
    Next Article Jens Schulte-Bockum to step down at MTN

    Related Posts

    AI complexity is crippling IT departments - Thomas Meyer

    AI complexity is crippling IT departments

    2 March 2026
    African firms are all in on cloud and AI - on paper, at least

    African firms are all in on cloud and AI – on paper, at least

    24 February 2026
    Telkom tops 25 million mobile subscribers as data growth surges - Serame Taukobong

    Telkom tops 25 million mobile subscribers as data growth surges

    16 February 2026
    Company News
    SA's cybersecurity triple bind: more threats, less talent, tighter regulation - Vox

    SA’s cybersecurity triple bind: more threats, less talent, tighter regulation

    17 March 2026
    When CTEM, AI and a unified attack surface meet - RedRok, Solid8 Technologies

    When CTEM, AI and a unified attack surface meet

    17 March 2026
    Why finance's new KPI is decision speed

    Why finance’s new KPI is decision speed

    17 March 2026
    Opinion
    South Africa's energy future hinges on getting wheeling right - Aishah Gire

    South Africa’s energy future hinges on getting wheeling right

    10 March 2026
    Hold the doom: the case for a South African comeback - Duncan McLeod

    Apple just dropped a bomb on the Windows world

    5 March 2026
    VC's centre of gravity is shifting - and South Africa is in the frame - Alison Collier

    VC’s centre of gravity is shifting – and South Africa is in the frame

    3 March 2026

    Subscribe to Updates

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

    Latest Posts
    MTN's Iran problem: can't stay, can't leave

    MTN’s Iran problem: can’t stay, can’t leave

    17 March 2026

    Post Office limps on – for now

    17 March 2026
    AI chip boom is pushing up costs for telecoms operators

    AI chip boom is pushing up costs for telecoms operators

    17 March 2026
    Samsung's trifold gamble ends in retreat

    Samsung’s trifold gamble ends in retreat

    17 March 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}