As it was highlighted in a recent Nebula White Paper “Wastage in South Africa’s Telecoms Sector” spend wastage is as huge problem in the corporate sector of South Africa, with up to 20% of telecoms budgets in large enterprises being wasted.
This problem however is not restricted to the private sector. The public sector is also susceptible to wastage, often even more so than the private sector, due to additional levels of bureaucracy and red-tape.
According to the 2014 Auditor General’s Report, 70% of government departments incurred fruitless and wasteful expenditure in their general operations; moreover, inadequate steps taken by municipal managers to prevent wasteful expenditure was cited as one of the most common material non-compliance findings in the report.
It also showed that there was a three-year trend of growing fruitless and wasteful expenditure, with the amount increasing by 31% from 2013 to 2014.
Fruitless and wasteful expenditure typically included interest, losses, penalties and payments for goods or services not received.
According to new Frost and Sullivan research on ICT spending in South Africa, the public sector spent R7.7 billion on ICT platforms in 2014, with 73.1% of Government investment in ICT being spent on managed services and fixed or non-cellular connectivity.
In Nebula’s estimation it is likely that as much as 20% of this may have been lost to fruitless and wasteful expenditure.
According to the Frost and Sullivan report, current public sector ICT expenditure is mainly limited to day-to-day requirements. This highlights a lack of any co-ordinated plan to enforce ICT standards or ensure interoperability with national and provincial departments.
While e-government strategies are a core focus area for government, with their development and uptake being driven by South Africa’s National Development Plan, and the National Broadband Policy, a shortage of ICT skills and low levels of internet penetration are resulting in poor citizen access to online content. This has held back the roll-out of ICT platforms and the utilisation of e-government platforms.
By taking back control of their telecoms expenditure and reducing wastage in this area, government departments can free up essential funds in order to progress large scale ICT development projects.