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‘ICT spend in Nigeria, others to reach $95bn by 2021’

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Spend by organisations on Information and Communication Technology (ICT) in Nigeria and other countries in the sub-Sahara Africa (SAA) is set to surpass $95 billion and spend on IT specifically will exceed $19 billion by 2021, according to recent statistics released by the International Data Corporation (IDC).

 

Growth will be primarily within infrastructure and connectivity, but is increasingly moving into software and services, said Associate Vice President for Sub-Saharan Africa at IDC, Mark Walker. Walker said between 2015 and 2017 the market witnessed a number of disruptions, which culminated in ICT spending contracting in 2016 for the first time in decades.

 

“Oil and commodity prices fell drastically from the end of 2014. (There was) political transition and developments, particularly in South Africa and later in Nigeria in 2015.

 

 

Government spending was significantly curtailed. Private sector confidence was low,” said Walker. A turnaround is expected this year, defined by a period of moderate recovery but one of transformative growth, said the IDC. The market analysis and research firm said oil prices have risen, more recently to the highest level since 2014, and government spending is expected to pick up, albeit more focused and cautious overall.

 

 

“More than the actual growth in spending it will be the type and texture of spending that will see big shifts. 2018-2021 will witness big changes to the spending mix. It will be a period of a relentless shift towards digital transformation and 3rd platform technologies.

 

 

“IT buyers will focus on doing more with less/same. They will squeeze out more savings from ‘keeping the lights on’ type of tasks and use the savings to fund DX,” Walker added. According to the IDC, digital transformation remains a key consideration behind ICT spend going forward.

 

The company said most organisations are just beginning on their digital journeys and the expectation is that many will roll out initiatives this year. Customer experience and transformation has been identified as a key driver. “Digital transformation is a multi-year journey.

 

Breaking silos and aligning with line of business is not easy and takes time,” Walker continued. According to the IDC, smartphones experienced a dip in shipments and value in 2016 after experiencing double digit growth annually until 2015.

 

The company said this was mainly due to macro issues (tough economic climates, currency devaluations) across middle east and Africa (MEA), longer refresh cycle due to reduced disposable income, and the push of feature phones to smart phone users that were converting for the first time.

 

Again, the company said 2018 will see a slight recovery, but not at the double-digit growth rates as experienced before. In the same vein, the GSM Association’s (GSMA’s) Mobile Economy 2018 report stated that mobile subscriber penetration in sub-Saharan Africa will reach 52 per cent in 2025 compared to 44 per cent in 2017 and 48 per cent in 2020.

 

“In terms of mobile penetration of population, Sub- Saharan Africa will have the largest increase between 2017 and 2025 (8 percentage points),” Walker said. “The one problem we continue to face across the continent is that it is not fully connected.

 

 

The networks across Africa are underdeveloped and there is a lot of opportunity in that space. It remains a mobile first continent, yet we are still behind in internet penetration and usage. “So, there are still some big questions to answer around connectivity and the ability to communicate and transfer data across the continent,” said Walker.

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