South Africa’s State IT Agency Turns Corner with Profit Up by 76%

Mergers, Acquisitions and Financial Results

Rocky years for the State Information Technology Agency (Sita) have been put behind it, with the government's hi-tech supplier earning a net profit 76% higher than it managed last year.

Figures showing a R143,5m profit on turnover up 15% to R3,3bn will do a lot to finally bury Sita's reputation for incompetence, poor performance, negligence and possible corruption that marred its earlier years.

The turnaround was largely attributed to an overhaul instigated by former CEO Mavuso Msimang -- who has since been recruited to achieve a similar shake-up at the problematic Home Affairs Department.

The agency still needs a full-time CEO, is having its board reshaped and may see its workload altered as the Sita Act that defines its duties is reviewed. But Public Service and Administration Minister Geraldine Fraser-Moleketi said: "I am proud of the progress and accomplishments Sita has recorded during the financial year and look forward to even greater successes in the year ahead."

The last remnants of the old Sita are three-year-old cases of negligence at best and fraud at worst that are still being investigated. One was the awarding of a contract where "the costs incurred were completely over the top for the services we got", said Sita's acting CEO, Peter Pedlar. Charges were being laid, he said, because "we want to catch the culprits associated with wrongdoing".

The Commercial Crime Unit is investigating a second case involving contracts worth R61m to protect ministers and top-ranking government employees, since the people using it never paid for the service. "We are discussing that with the Presidency because users must pay for what they want," Pedlar said.

Long-standing complaints from private sector companies that Sita was slow to award government IT tenders were fading. Tenders were now adjudicated in an average of 78 days, down from the intolerable six months they used to take, said Pedlar. There was room to speed that up even more, as long as the process remained thorough enough to withstand scrutiny from outsiders or from aggrieved losing bidders.

Business Day