Govt allocates R4bn to IT services

Johannesburg, 22 Feb 2008

SA's national government departments are projecting to spend R4 billion on "computer services" in the 2008/9 fiscal year, according to National Treasury.

This is a 22.5% increase on the expected expenditure from the 2007/8 financial year. The percentage of spend allocated to computer services remains constant, at 1% of total national expenditure.

National Treasury's 2008 Estimates of National Expenditure reveals spend on "software and other intangible assets" is projected to be R170 million in the 2008/9 financial year. This is an 11% increase on expected spend from the 2007/8 financial year, ending 31 March.

No detail on projected ICT hardware expenditure is available in the report.

State IT Agency (SITA) CEO Llewellyn Jones could not comment on the budget directly, but says his agency is studying National Treasury's numbers in full.

"I can say that the funding allocated towards IT-related expenditure reflects the continued importance of IT in enabling government service delivery. Our imperative is to play a strong thought leadership role in influencing and advising government on appropriate technologies and solutions to enhance the efficiency of public service and improve service delivery," he says.

BMI-TechKnowledge IT research manager Roy Blume says the research agency is also looking at the numbers.

"National Treasury's classification makes it difficult to establish what exactly goes into 'computer services'. However, a 22.5% increase is a fantastic little boost," he says.

Where's IT going?

Three national departments account for 65% of projected "computer services" spend in the coming year.

The Department of Safety and Security leads with R1.3 billion allocated to computer services in the coming year. However, this department gives no detail as to how this budget will be spent.

Safety and security is followed by the Department of Defence, which has budgeted R818 million for services.

The Department of Defence reveals that some of this spend has been allocated to the Command and Management Information Services sub-programme. R200 million will go towards upgrading and improving the defence information and communication systems. A further R14 million and R12 million are allocated to SITA tariff increases and computer licence fees, respectively.

Next up is National Treasury, with planned expenditure of R503 million. This will primarily be allocated to the development and roll-out of the Integrated Financial Management System.

The Department of Public Enterprises, Department of Transport and the Public Service Commission are the lowest spenders on computer services in the coming year. These have allocated R1.5 million, R1.7 million and R2.3 million, respectively.

More to come

Blume notes that these figures do not include expenditure from provincial and local government.

"These are also big spenders and will add to government's total spend on IT. As it stands, the R700 million increase in public sector IT spending will account for around 1% of our 2008 projections of the IT market value," he says.

A source close to SITA believes public sector spend on ICT will be around R10 billion.

"What we need is for government to actually spend what has been budgeted. It is expecting to under-spend on its computing services allocation by about R100 million this year. If under-spending continues, then the positive impact on the IT industry at large reduces," warns Blume.