On March 15, 2007, the South African minister of trade and industry, Mandisi Mpahlwa, announced the Government Assistance and Support (GAS) programme for the business process outsourcing (BPO) sector in South Africa. In terms of this programme, South Africa has set aside incentives of R1bn over the next five years, for investors in the BPO sector. The GAS programme is a first for South Africa’s BPO sector, which is currently booming.

The BPO Investment Incentive comprises an investment grant ranging between R37,000 and R60,000 per seat and a training support grant towards costs of company specific training up to a maximum of R12,000 per agent. The incentives are offered to South African and non-South African investors establishing projects that aim primarily to serve offshore clients. The objective of the incentives is to attract BPO investment that creates employment opportunities. The BPO Investment Incentives are effective from December 6, 2006 to March 31, 2011.

Advertisement

The new BPO incentives bolster what is already an attractive proposition for investors. South Africa offers a stable and open investment environment.

Political and economic environment

Five key aspects assure potential investors, when thinking about South Africa’s political and economic environment. These are:

1. A stable democracy

  • adhering to standards of fair and transparent governance (King II)
  • playing a leading role on the continent (eg, through NEPAD [The New Partnership for Africa’s Development])
  • and globally (eg, attendance at G8)
  • Host to the Pan-African Parliament

 

2. A sound monetary policy

  • leading to highly stable exchange rates
  • steadily declining inflation

 

3. Free market principles

 

  • open to foreign trade and investment

 

4. Our constitution

  • world respected
  • high economic management standards

 

5. An emerging market

  • Sophisticated and promising
  • Entrepreneurial
  • A dynamic investment environment

WORLD-CLASS INFRASTRUCTURE

Telecommunications

End-to-end domestic fibre network with uptime of 99.99%.

High international bandwidth available, with 120 Gbps available to the US.

Property

More than 16 million square feet of premier grade property available in prime locations.

Vacancy rates from 10% to 25% in major cities.

Premier international conference centres and premier hotel chains (eg. Hyatt, Sheraton).

Connectivity

55 weekly flights to the UK, direct from Johannesburg and Cape Town.

48 weekly flights to the US, direct from Johannesburg and Cape Town.

Power

The lowest electricity price in the world, according to independent UK research.

A $14bn expansion plan over the next five years.

INDUSTRY AND SERVICE PROVISION STRENGTHS

INDUSTRIES

Insurance:

Many large, experienced players with scalable insurance infrastructure.

Product sophistication, similar life products to the UK.

Mature industry: first-world insurance operations.

Banking:

Sophisticated banking environment.

Well regulated financial services environment, eg. FAIS, FSA (UK) & FSB (SA) links.

Compliance with international regulations, eg. Basel II, Data Privacy Act.

Telecoms:

Large scalable telecom infrastructure.

Many experienced players.

Flexible operations (call centre virtual model).

Good technical know-how and capability.

SERVICE LINES

Customer contact:

Strong customer service culture.

South Africans are perceived abroad as helpful and personally warm.

Accent neutral leading to high conversion rates.

Payment service:

Successful track record (Nedbank and Swisscard).

Understanding of credit due to strong credit culture.

Suitable infrastructure with appropriate technological platforms.

High-end offshoring:

Capable of achieving and exceeding service level agreements within a short period of time.

Scalable infrastructure.

Further information on South Africa’s BPO Programme can be obtained from: Incentives: The Enterprise Organisation within The Department of Trade and Industry Ms Francisca Strauss

E-mail: fstrauss@thedti.gov.za

Tel: +27(0)12 394 1259

Industry Body: Business Process enabling South Africa (BPeSA)

Mfanu Mfayela CEO

E-mail: mfanu@bpesa.org.za

Tel: +27 84 722 2266

The South African BPO Sector Support Programme through info@bpo2sa.org.za