The report, prepared by Business Software Alliance (BSA) in South Africa, said that while there had been a fall in the overall rate of software piracy across the country in 2006, well below the African and Middle Eastern average, the actual cost to the economy remained fairly stable.
According to Stephan Le Roux, the chairman of BSA, 35% of all software used in South Africa is pirated, a figure that is slightly down on the 37% of two years ago.
"Whilst there is progress in the region with South Africa 25% below the 60% regional average for Middle East and Africa, the economic impact to our economy is on the increase," Le Roux said on May 15 at the release of the study. "Government, trade bodies and businesses must continue to tackle software piracy aggressively if these economic losses are to be reduced."
The only way that South Africa will be able to significantly lower its piracy rate is through a multi-faceted, multi-year educational effort, including private and public sector commitment, he said.
BSA said that software piracy was rampant across all business sectors, including financial services, technology and manufacturing companies, affecting the efficiency and data security of firms and ultimately hitting the economy as a whole.
However, South Africa's abuse of software copyright is nowhere near on a par with nearby countries, such as Zimbabwe where 91% of all software in being pirated, and Botswana where the figure stands at 81%.
In late April, the BSA announced it would launch a campaign targeting thousands of firms it believed might be using unlicensed software.
"Piracy remains one of the major hurdles to the development of the information economy in South Africa, on the continent and, indeed, around the world," said Le Roux said at the campaign's launch "There is great concern for the local economy that over a third of the software in use is illegal."
The campaign intends to inform businesses of the risks associated with the use of pirated software, requesting them to conduct an immediate software audit.
The campaign also includes a system of financial rewards of up to $7100 for information that leads to the prosecution of companies found to be running unlicensed software, with BSA setting up a special hotline for callers.
One problem identified by the BSA is South Africa's copyright laws, which it said need to be updated to discourage software piracy, along with strengthening the sanctions that can be imposed on those in breach of the regulations.
The 2006 annual report of the International Intellectual Property Alliance, a private sector coalition established in 1984 to represent the US copyright-based industries, cited numerous difficulties in South Africa for countering software piracy, including the slow pace of judicial proceedings against alleged infringers, the high cost of civil actions for the rights holder and loopholes in the country's copyright laws, which do not conform to international standards.
The government did introduce draft amendments to the copyright laws in 2000 that would have met many of the demands of the software industry, but withdrew them later on in the same year.
One of the steps the industry wants to see taken is to make companies and their managers criminally responsible for end-user copying, a move the BSA said would go a long way in protecting intellectual property right holders, bringing South African laws into line with international standards and promoting good corporate governance.
However, there are already signs that things are getting tougher for software pirates and their clients. In March, nine companies were ordered to pay fines totalling $13,500 after being prosecuted for illegal software use.
Though major prosecutions have been relatively few, and the problem of software abuse in South Africa remains substantial, increased awareness, along with a few high profile court cases, may help to sink the pirates.