IDC: African IT spending to reach $33.4 billion in 2018

The International Data Corporation (IDC) has projected that the overall African IT spending will expand at a very healthy compound annual growth rate (CAGR) of 6.3% over the next five years to total $33.4 billion in 2018.

This figure represents a 36% increase from today’s figure according to the global consulting and advisory services firm, which predicts that South Africa is set to grow at a rate of 5.7% while Nigeria and Kenya will both grow at more than 7%. The banking and finance, telecommunications, energy, healthcare, and transportation sectors will be responsible for the lion’s share of this IT investment growth.

Mark Walker, regional director for Sub-Saharan Africa at IDC says “Africa has played host to massive growth in mobile phone usage in recent years and IDC expects mobile technologies to catalyze investment, with mobile enterprise applications becoming a leading priority. Governments will also invest in fibre-optic cables, public services, content, and governance and compliance oversight to ensure the security of transactions online.”

In the last five years, various countries in Africa have rolled out fibre-optic infrastructure. IDC expects to see a shift in the focus from undersea cable to the rollout of terrestrial fibre. And in further developments, telecom service providers are expected to expand their current fibre infrastructures to offer last-mile, high-end connectivity to enterprises.

Countries such as Nigeria, Kenya, Ghana, Rwanda, Tanzania and South Africa, in cooperation with international developmental agencies, academia, and ICT vendors, have made considerable investments in ICT infrastructure and IDC expects this to help local startups that have had problems sustaining and running successful businesses.