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The stage is set for IBM to rake in African potential
Telecommunications and banking are key growth sectors
October 29, 2009
By Thabiso Mochiko
Global technology group IBM expects the demand for its products to increase in Africa from next year, helped by infrastructure projects in telecommunications and banking.
Despite a slowdown in the economy in Africa, Steve Mills, the senior vice-president for IBM software group, said there was an increase in government projects. In addition, a focus on improving telecommunications infrastructure would boost demand for IBM's products and services.
"There is still growth," Mills said. "African countries spend relatively little on information technology as a percentage of gross domestic product. There is plenty of upside potential and (we) will see a resurgence of growth and economic turnaround from next year into 2011."
IBM expanded its operations in Nigeria and Kenya earlier this year, as it expects the demand for its technology and related services to soar.
Although the company did not provide more information on its planned investments, it has committed to inject more money in the continent.
IBM has invested more than $120 million (R915m) in Africa in the past two years.
Analysts predict that half of the information and communications technology business growth will come from emerging markets. IBM is increasing its footprint in Africa to take advantage of this expansion.
Two years ago IBM opened a $120m service delivery centre that created more than 1 500 jobs in Johannesburg. The centre helps more than 300 IBM global and regional clients with their technical problems.
Last month it opened an innovation centre in Cape Town to help businesses develop new technologies that could be used in sectors such as banking, insurance and retail.
Mills said the group would continue to look at developments in other African countries and extend its support structures accordingly.
"We have a large number of people in South Africa who are providing support to other African countries.," he said.
"We are comfortable with supporting other African countries out of South Africa but it is inevitable that we will extend support centres. It's a matter of how quickly we grow."
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