Lula’s Andrew Keggie, Chief Information Officer, on why the gap between winning work and getting paid is the most solvable problem facing South Africa’s ICT sector.
In 2026, the ICASA 2026 State of the ICT Sector report listed the sector’s revenue at R273.8 billion[1] with telecommunications growing by 4.2%. Demand is strong and the margins are there, yet many of the small to medium enterprises (SMEs) winning the work are struggling to fund delivery in the months between signing a contract and being paid for it. When these companies look for technology business funding, they aren’t failing, they are building stability for the gap between the work won and the work paid.
“ICT SMEs commit their costs upfront, paying people, licences and infrastructure long before a client settles the invoice,” says Keggie. “When a company looks for ICT funding to bridge that period, it usually signals that the work is there and they are winning it. Most owners are told to wait it out or lean on personal credit, but neither of these choices solves the timing challenge. The costs land now while their revenue only arrives months later. These companies need underwriting that reflects how they trade, with live transaction data that provides insight into their inflows so working capital is built around the ways in which ICT companies generate revenue. There is a need for them to have access to tender finance while waiting on SITA settlements as this is often what keeps projects staffed and on schedule.”
Adoption is accelerating with more than two in three South African companies either using AI or experimenting with it, which is an exceptional opportunity for the ICT SME. As that appetite grows, the technology firms building, integrating and securing these systems are being asked to deliver larger and more complex projects, each carrying its own upfront bill ahead of the first payment.
What gives this a distinctly ICT shape is the route government technology spend takes before it reaches a supplier. Almost everything the state buys in technology is procured through the State Information Technology Agency (SITA). A department specifies what it needs, SITA purchases it from the SME, the department settles with SITA, and then the supplier is paid. For SMEs delivering on state contracts, access to tender finance while waiting on SITA settlements is often what keeps a project staffed and on schedule. Technology suppliers sit further down the chain than most companies, waiting on an intermediary that has told Parliament it can only settle invoices once client departments release the funds. The result is a longer and less predictable wait between delivering the work and being paid.
The most recent Pulse of the Public Service bulletin, released in July 2026[2], has put the value of government supplier invoices older than 30 days at R15.5 billion[3] with provincial departments accounting for roughly 98% of the total. The Commission chairperson was direct about the consequences, warning that late payment pushes small suppliers to borrow, retrench or close. For a sector built on government and enterprise contracts, that timing gap is the clearest obstacle standing between a healthy order book and a healthy business.
For Keggie, the conclusion follows naturally. “In a contract-driven sector, an ICT funding request usually signals strength,” he says. “It tells you the work has been won, and the client intends to pay, and that the only thing missing is the money to carry delivery until the invoice clears. The businesses that grasp this build working capital into how they operate, treating it as part of the infrastructure that keeps the systems running and the projects moving, well before a cash crunch forces the question.”
That framing is important because of all the pressures facing the sector, from the skills shortage to the cost of keeping pace with new technology. Out of all of these, the payment gap is the most solvable. Demand is real, margins hold and the work is being won; what remains is closing the distance between winning that work and being paid for it, which is a question of structuring capital around how technology firms trade and drawing on live transaction data rather than dated financial statements. ICT funding solutions such as Lula’s Cash Flow Facility exist precisely to carry a business across that gap. Lula has funded 987 ICT businesses since 2015, disbursing more than R980 million.
“The opportunity belongs to the businesses that stop letting the payment cycle set the ceiling on their growth,” Keggie concludes.
For more on how South African technology businesses are managing the technology business funding gap, visit lula.co.za/blog/sme-advice/ict-sector/.
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