End of a state monopoly in South Africa

Business Leadership South Africa (BLSA) CEO Busisiwe Mavuso has praised the government’s decision to amend IT procurement laws for state departments.

However, she warns that it will be another ineffective regulatory change if state departments do not take advantage of the opportunity it presents.

This follows an amendment to the State Information Technology Agency (Sita) Act, which allows departments to bypass the state-owned entity when procuring IT products and services.

Previously, all state departments at the provincial and national levels were mandated to procure IT products and services through Sita, a mandate the entity struggled to fulfil.

Mavuso called the new regulations “a victory for common sense and effective governance,” despite heavy opposition in Parliament.

“I have written before about the critical role that IT must play in rebuilding a capable state and warned that the ability of government to embrace world-class IT systems was too important to be held hostage by politics,” she said.

“What excites me most about this development is the competitive pressure it will create.”

As the BLSA CEO points out, the Department of Communications and Digital Technologies has not abolished Sita, but instead amended the regulations so that it is forced to compete against private suppliers.

The new regulations state that government departments must submit the user-specific requirements, business case, and deadline for what it needs to procure.

Sita then has ten working days to respond with whether it can meet the requirements within the specified time and procure what is needed faster and at a lower cost.

If Sita fails to respond within ten days or cannot compete with the business case for the alternative procurement means, the department is free to sidestep the agency.

“Sita will now have to compete for government business on merit rather than relying on its monopoly position,” Mavuso says.

“If Sita can transform itself into an efficient, competitive service provider, the public sector will benefit from having multiple high-quality options.”

Mavuso points to the South African Revenue Service (Sars) as a “world-class example” of what the public sector can do when given the autonomy to implement the best technology available.

She said Sars’ model of effective digital governance, which is studied globally, has only been possible because it was allowed to procure and manage its own IT systems.

Proof is in the eating

However, the BLSA CEO warns that state departments must use this liberty to procure IT infrastructure wisely, as the changes aren’t a solve-all solution.

Sita has long maintained that it has been the scapegoat for failed and inefficient IT projects within the public sector.

However, now that government departments have an alternative, the proof of the pudding will be in the eating.

“We can’t afford to see this opportunity wasted through poor implementation or capture by different vested interests,” Mavuso says.

“The ultimate test will be whether South Africans experience faster, more efficient, and more reliable government services.”

She gave the examples of the Department of Home Affairs (DHA) and the South African Police Services (SAPS), which can now acquire the best IT equipment through competitive tender processes.

Deputy Finance Minister Ashor Sarupen recently said SAPS could cut down on R115 million worth of information and communication technology (ICT) spending over three years if efficiency is prioritised.

This was according to a Government Technical Advisory Centre (GTAC) report, which found that the country could save R12 billion by reducing inefficient government spending.

“Generally, the costs of utilising Sita are higher than when procuring through non-Sita channels, especially when minimal oversight is applied to Sita procurement processes on behalf of government entities,” the review notes.

On the other hand, Home Affairs Minister Leon Schrieber and his predecessor, Aaron Motsoaledi, have been very vocal about Sita’s inefficiencies.

In 2021, Motsoaledi called the department’s Sita-provided IT system its “original sin,” and Schreiber recently described the agency as an “artificial construct that stands squarely in the way of technological progress.”

While Communications Minister Solly Malatsi first proposed a version of these rules in 2024, Home Affairs’ refusal to continue its relationship with Sita may have given it the momentum it needed to get across the line.

“If this reform enables departments to embrace digital efficiencies that transform their service delivery, it will have achieved its purpose,” Mavuso says.

“If not, it will just be another policy change that didn’t translate into real improvements in people’s lives.”