UAE and Saudi Arabia to lead $234bn ICT spending

The Middle East, Turkey, and Africa (META) region is expected to witness significant growth in information and communications technology (ICT) spending, according to a recent study by the International Data Corporation (IDC). The study predicts that the ICT spending in the region will increase by nearly 4% annually, reaching over $234 billion in 2023.

Two of the Arab world’s largest economies, Saudi Arabia and the UAE, are expected to play a significant role in the region’s digital economic transformation. The two countries are expected to spend $34.6 billion and $20 billion, respectively, and hold the first and third position in the META region in terms of ICT spending. South Africa is expected to be in second place, with $28.6 billion in ICT spending, while Turkey and Nigeria are the only other countries expected to post double-digit spending, with $18.6 billion and $12.6 billion, respectively.

Jyoti Lalchandani, the IDC’s Group Vice President and Regional Managing Director for the META region, praised the efforts of the public sector in the UAE and Saudi Arabia in driving digital transformation. He cited the two countries’ initiatives to diversify their economies, modernize infrastructure, and promote the use of technology in daily life as key factors in their leadership in the region.

According to the study, spending on information technology in the META region is expected to grow by 4.3% year-on-year to $99.9 billion, close to breaking the $100 billion mark for the first time. The IDC predicts that digital transformation spending in the region will reach $74 billion by 2026, growing at a compound annual rate of 16%. This growth rate is more than double the overall economy’s growth rate, with digital transformation investments growing eight times more in 2023.

The study also highlighted the challenges faced by enterprises in the META region, such as macroeconomic factors and supply chain disruptions. However, enterprises can navigate these challenges by adopting a digital-first approach and moving away from traditional infrastructure towards more efficient and adaptable solutions.

Health care and education are the fastest-growing sectors in the META region, while public cloud services are expected to grow by 25% annually to reach $10.4 billion in 2023. The study also projects that spending on big data analytics will grow by 11.4% year-on-year to reach over $4.1 billion, and spending on artificial intelligence is expected to grow by over 16% to reach about $8 billion.

In conclusion, the META region is poised for significant growth in ICT spending, driven by the efforts of countries like Saudi Arabia and the UAE to promote the use of technology and drive digital transformation.