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
      Mastercard bets billions on the tech that could eat its lunch - Prakriti Singh

      Mastercard bets billions on the tech that could eat its lunch

      21 July 2026
      From care homes to production lines, the robots are coming

      From care homes to production lines, the robots are coming

      21 July 2026
      Remote work in South Africa hits record high

      Remote work in South Africa hits record high

      21 July 2026
      China weighs blocking the West from its best AI

      China weighs blocking the West from its best AI

      21 July 2026
      Openserve hits back in fibre ISP row

      Openserve hits back in fibre ISP row

      20 July 2026
    • World
      Meta AI will now tell parents if their teen is in crisis

      Meta AI will now tell parents if their teen is in crisis

      17 July 2026
      IBM shares crash 25% as AI upends software spending - Arvind Krishna

      IBM shares crash 25% as AI upends software spending

      15 July 2026
      Jony Ive's first OpenAI device: an AI smart speaker - Jony Ive and Sam Altman

      Jony Ive’s first OpenAI device: an AI smart speaker

      15 July 2026
      Stripe, Advent in talks to buy PayPal for $53-billion

      Stripe, Advent in talks to buy PayPal for $53-billion

      15 July 2026
      Memory crisis sends smartphone market into steep decline

      Memory crisis sends smartphone market into steep decline

      13 July 2026
    • In-depth
      The plan to stop AI from breaking the world - Google DeepMind CEO Demis Hassabis. Image: John Sears

      The plan to stop AI from breaking the world

      16 July 2026
      The internet has a Strait of Hormuz problem

      The internet has a Strait of Hormuz problem

      15 July 2026
      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
    • TCS
      Watts & Wheels S1E7: 'Ferrari's EV breaks the internet'

      Watts & Wheels S1E7: ‘Ferrari’s EV breaks the internet’

      8 July 2026
      TCS+ | How Tracker is turning vehicle data into business strategy - Silvia Schollenberger

      TCS+ | How Tracker is turning vehicle data into business strategy

      1 July 2026
      TCS+ | IBM Bob: an AI-powered 'development partner' for the enterprise - David Spurway

      TCS+ | IBM Bob: an AI-powered development partner for the enterprise

      30 June 2026
      Watts & Wheels S1E6: 'A flawless Alfa and a bakkie that divides'

      Watts & Wheels S1E6: ‘A flawless Alfa and a bakkie that divides’

      17 June 2026
      Watts & Wheels S1E6: 'A flawless Alfa and a bakkie that divides'

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

      8 June 2026
    • Opinion
      Selling vapour is corporate suicide in slow motion - Jannie van Zyl

      Selling vapour is corporate suicide in slow motion

      16 July 2026
      Brazil's online gambling crackdown is a lesson for South Africa

      How Amazon outmanoeuvred Starlink in South Africa

      15 July 2026
      The Popia problem with agentic AI - Herman Haasbroek

      The Popia problem with agentic AI

      14 July 2026
      The author, Fanie van Rooyen

      South Africa can still catch the AI wave – here’s how

      7 July 2026
      The author, Fanie van Rooyen

      The AI utopia South Africa can’t afford

      1 July 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
      • Policy and regulation
      • Public sector
      • Retail and e-commerce
      • Satellite communications
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
      • Watts & Wheels
    • 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

    South Africa's window of cheap tech is closing

    South Africa’s window of cheap tech is closing

    3 June 2026
    Openserve launches its own ISP, rattling wholesale partners

    Telkom lifts dividend 66% as it slashes debt

    2 June 2026
    Telkom reports this Tuesday: the real story will be in the detail - Serame Taukobong

    Telkom reports this Tuesday: the real story will be in the detail

    31 May 2026
    Company News
    Cloud adoption is done. Execution is the new frontier - Cloud on Demand

    Cloud adoption is done. Execution is the new frontier

    21 July 2026
    Data poisoning in AI models: what businesses need to know - Domains.co.za

    Data poisoning in AI models: what businesses need to know

    21 July 2026
    The AI-led industrial revolution has begun - CallMiner Bruce McMahon

    The AI-led industrial revolution has begun

    20 July 2026
    Opinion
    Selling vapour is corporate suicide in slow motion - Jannie van Zyl

    Selling vapour is corporate suicide in slow motion

    16 July 2026
    Brazil's online gambling crackdown is a lesson for South Africa

    How Amazon outmanoeuvred Starlink in South Africa

    15 July 2026
    The Popia problem with agentic AI - Herman Haasbroek

    The Popia problem with agentic AI

    14 July 2026

    Subscribe to Updates

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

    Latest Posts
    Mastercard bets billions on the tech that could eat its lunch - Prakriti Singh

    Mastercard bets billions on the tech that could eat its lunch

    21 July 2026
    From care homes to production lines, the robots are coming

    From care homes to production lines, the robots are coming

    21 July 2026
    Cloud adoption is done. Execution is the new frontier - Cloud on Demand

    Cloud adoption is done. Execution is the new frontier

    21 July 2026
    Data poisoning in AI models: what businesses need to know - Domains.co.za

    Data poisoning in AI models: what businesses need to know

    21 July 2026
    © 2009 - 2026 NewsCentral Media
    Built and maintained by Chronon
    • 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}