The top-ranked business sector that’s going to help rebuild the economy: Ramaphosa

 ·12 Apr 2021

President Cyril Ramaphosa says that South Africa’s economic recovery plan will not see a return to previous systems, but will rather focus on new digital skills.

Writing in his weekly open letter to the public, the president said that this change in focus will put the economy on a fundamentally different growth trajectory.

“One of the concrete ways that we can do this is by harnessing the job-creating potential of the digital economy, whose growth has only been accelerated by the coronavirus pandemic,” he said.

He cited a recent report which ranked South Africa first in the world as a destination for global business services.

This sector includes call centres, technical support and back and front office services for major multinationals and South African firms.

“This is truly a remarkable achievement. In a short space of time, our country has propelled itself from a relatively unknown destination for offshore customer service delivery, in the shadow of large competitors such as India and the Philippines, to the very forefront of the global industry,” he said.

“The story of how this was achieved holds important lessons for what we can do if we work relentlessly as government and social partners towards a common goal.”

Why we are the best 

Ramaphosa said that South Africa has several advantages that make it an attractive destination for business services:

  • We have sophisticated digital infrastructure, including mobile networks and high-speed broadband;
  • We have a young, dynamic and skilled workforce that delivers a world-renowned quality of service, along with deep knowledge in technology and financial services;
  • We have a high level of English proficiency. And finally, we are positioned in a similar time zone to our key export markets.

He said that the Department of Trade, Industry and Competition has also worked closely with Business Process Enabling South Africa to promote the sector.

This includes the introduction of a Global Business Services incentive which has been successful in reducing costs and attracting new investors to South Africa.

“The Presidential Employment Stimulus, which we launched in October last year in response to the economic impact of the pandemic, supported the expansion of this incentive. The stimulus has enabled the creation of 8,000 new jobs in the industry during the last two quarters, most of which have gone to previously unemployed youth,” he said.

Rebuilding the economy

Ramaphosa said the sector in South Africa has grown at twice the global growth rate for the sector since 2014 and three times faster than key competitors.

It has added 40,000 jobs to the economy since 2018, with young people making up 82% of these new jobs and women comprising 65% of the workforce, he said.

“The sector generates R1.9 billion a year in export revenues and attracts significant capital investment.

“With global demand on the rise, and with a compelling and competitive proposition to global buyers and investors, the sector in South Africa is on track to achieve its target of 100,000 new jobs by the end of 2023 and 500,000 new jobs by the end of 2030.”

As the country moves forward with its economic reconstruction and recovery, the president said the country must recognise and nurture ‘green shoots’ such as these.

“Too often, we get caught up in our immediate challenges and lose sight of our true potential. Our country has all of the ingredients that we need for economic success. We only need to recognise these, and put them to use.”

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