Strong IT spending expected in MEA as region recovers from recession

Recovery to be aided by strong IT spending in Government, Oil & Gas, Retail & Wholesale, Manufacturing & Home sectors

Tags: EgyptIDC Middle East and AfricaSaudi ArabiaSouth AfricaUnited Arab Emirates
  • E-Mail
Strong IT spending expected in MEA as region recovers from recession IT spending forecast by verticals - MEA 2008-2013. (IDC)
More pics ›
By  Mark Walker Published  November 22, 2009

The recession has been felt strongly by technology buyers the Middle East & Africa region where some areas and industries were more affected than others, regionally IT spend was most impacted in countries such as the UAE where the effect of lower oil prices, cooling of the property market and a slowdown in the banking sector all contributed to a slashing of IT spend in 2009.

IT spend showed a contraction of  -1% in 2009, reaching $51 billion while the Real GDP growth is forecasted to be as low as 0.8% and 0.6% for Middle East & Africa respectively.

However IT spending in countries such as South Africa was less impaired due largely to tighter regulatory and financial structures coupled with strong government investment in large infrastructure including projects such as the FIFA2010 World Cup and upgrading of communications and transport infrastructures that shielded these economies from the worst of the global negative trend. Egyptian IT expenditure followed a mildly negative trend in 2008 in line with many Middle Eastern IT markets with exception of UAE where the drop was more dramatic; -16%.

Vertical sectors showing the largest downturn in technology spend include Banking, Retail & Wholesale, Real Estate and Oil & Gas sectors and the home consumer segment.

The good news is that IT spend is expected to recover in step with an overall improvement in economic conditions in coming years. Pent up demand for technology combined with the release of new operating systems, enhanced security, greater storage and mobile applications as well as demand for ever more comprehensive technology based services are anticipated to boost IT spending significantly in 2010 and continue through 2013 as projects that were backburned since September 2008 are reignited and new innovations become mainstream. Government, Oil & Gas, Retail & Wholesale, Manufacturing & Home sectors represent the bulk of Middle East and African forecast IT spend while Telecom & Financial Services, which contribute more than 30% of the region's IT spending, are also expected to show strong growth as confidence returns to local markets. Infrastructural development fueled by the government investments are expected to propel Saudi Arabian IT market growth significantly in 2009/2010 as stimulus packages take effect and are maintained along the road to recovery.

Mark Walker is Director of Vertical Industry Practice, IDC Middle East & Africa.

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code