BPESA, the dti and a delegation of 19 South African companies recently returned from a successful joint marketing trip to Sydney and the Gold Coast in Australia. The team met with analysts, consultants, advisors and business executives from Australian organisations and outsourcing vendors during their […]
BPESA, together with the dti, take pleasure in producing the international Jobs Report for the 4th Quarter of 2018. 2,738 new international jobs were created between 1 October and 31 December 2018, keeping the rolling CAGR well above 20% for the year. The 4th Quarter’s […]
Minister Davies Launches The Global Business Process Services (Bps) Incentive To Prospective Investors In London, United Kingdom
The Minister of Trade and Industry, Dr Rob Davies has launched the Global Business Services (GBS) Incentive at SA House in London, United Kingdom. Davies said that the Business Process Services (BPS) industry offers South Africa the largest job creation potential across all service sectors.
According to Minister Davies, the Business Process Services incentive that he launched four years ago in London was successful in creating jobs in the BPS Sector, stimulating economic growth and it was instrumental in enhancing cost competitiveness which was crucial to the South African business case for BPS investments. However, due to the tapering nature of the incentive and inflation, South Africa started losing its cost competitiveness in relation to its competitors.
“The 2014 BPS incentive programme, that we launched here in London had the objective of attracting investment and creating employment opportunities amongst the youth in South Africa. I am pleased to announce that the programme achieved its objectives and resulted in the creation of an additional 20,000 direct jobs in the sector with an average growth rate of twenty-two percent (22%) per annum during the period 2014-2018,” said Minister Davies.
Davies indicated that through a global benchmark study and investor engagements, the dti has been able to present a revised Global Business Services incentive. Minister Davies stated that the highlights of the revised are a 3 tier incentive program and a reduction in the minimum criteria of jobs.
“The key components of the GBS incentive include a 3 tier incentive program which includes a non-complex job, medium complexity job and high complexity job, with an increase in value across all 3 tiers. A further change includes a reduction in the minimum criteria of 50 jobs across all levels of work to a minimum of 30 jobs for medium to high complexity jobs. To ensure that South Africa delivers the best quality services at the right price, the eligibility criteria was amended to include a minimum salary threshold of R60,000 per annum for entry level agent roles,” highlighted Minister Davies.
Minister Davies has assured investors of governments continued commitment in supporting the growth of the sector.
“Although South Africa offers significant cost arbitrage in comparison to their source markets such as UK, US and Australia, without the incentives or with a decreasing incentive value South Africa may not be able to leverage off the investment opportunities which this sector presents. Therefore, a decision was taken to review the existing incentives, as a key enabler in support of South Africa’s Value Proposition. The success of the BPS sector is the strong public – private partnership between Government, industry, stakeholders and investors. The recent Job Summit highlighted the importance of this sector and the hosting of the Global Sourcing Association (GSA) Summit and Awards in South Africa, provides confidence in our ability to deliver a quality product,”
the dti has partnered with industry to develop a compelling value proposition to investors which will support governments objectives of job creation within South Africa, primarily for youth and increase export revenue. BPESA, the Industry body representing the Global Business Services Sector in South Africa, welcomed the revised incentive package which will ensure that South Africa remains highly competitive as an offshore delivery location for GBS in an increasingly more competitive global market impacted by the digital economy and the journey into Industry 4.0.
The Chief Executive Officer of BPESA, Andy Searle, the industry welcomes the changes and that they are happy with the support they are receiving from government.
“We are confident that our value proposition underpinned by these well-tailored incentives will offer real value to investors for years to come. Governments continued support for this sector is applauded and hopefully sends a clear message to investors in the UK and elsewhere that South Africa is very serious about your business and will continue to put great effort and resource into attracting and retaining your investment in SA, said Searle.
South Africa’s Value Proposition for global business services is underpinned by good quality English-speaking talent, significant cost savings, a strong foundation in contact Centre and niche services, evolving capabilities for next-gen services for digital contact centres and world class infrastructure.
Sidwell Medupe-Departmental Spokesperson
Tel: (012) 394 1650
Mobile: 079 492 1774
Issued by: The Department of Trade and Industry
South Africa sits with one of the highest unemployment rates in the world, which means new solutions are required to counter the problem. The Department of Trade and Industry (Dti) is pursuing a new project to bolster jobs for SA’s youth. The Global Service Incentive […]
A new incentive for the global business services sector will create employment opportunities for youth in SA, Trade and Industry Minister Rob Davies said. The Global Business Services incentive – which came into effect on January 1, 2019 – was first launched last month by […]
The Minister of Trade and Industry, Rob Davies, says the Global Business Services (GBS) incentive that became effective from January 1 will create employment opportunities for the youth in South Africa.
Davies launched the GBS incentive last month at South Africa House in London.
He said the opportunities would be especially in the areas of medium- to high-complexity jobs, and that young people would be exposed to servicing major global brands out of South Africa.
“Areas of special interest by potential global investors are legal services, finance and accounting and IT services. South Africa’s value proposition remains a compelling business case for most global companies that are looking to optimise their customer solutions at a globally competitive rate,” he said.
The sector has demonstrated an annual growth rate of 22% on average year on year, and it is expected that the growth rate will continue to increase over the next five years.
Davies said that through continuous monitoring of the sector, global benchmarking study and investor engagements, the Department of Trade and Industry had been able to present a revised GBS incentive.
“The key components of the incentive include a three-tier incentive programme that includes a non-complex job, medium-complexity job and high-complexity job, with an increase in value across all three tiers,” he said. “A further change includes a reduction in the minimum criteria of 50 jobs across all levels of work to a minimum of 30 jobs for medium- to high-complexity jobs. To ensure that South Africa delivers the best quality services at the right price, the eligibility criteria were amended to include a minimum salary threshold of R60000 per annum for entry-level agent roles.”
The Trade and Industry ministry said the GBS replaced the Business Process Services incentive that was launched five years ago in London, which was successful in creating jobs in the BPS Sector.
Davies said the 2014 BPS incentive programme had achieved its objectives and resulted in the creation of an additional 20000 direct jobs in the sector, with an average growth rate of 22% per annum during the period 2014 to 2018.
However, the incentive started to lose its competitiveness despite South Africa offering significant cost arbitrage in comparison with their source markets such as the UK, US and Australia, therefore a decision was taken to review the existing incentives, the ministry said.
BPESA, the industry body representing the Global Business Services Sector in the country, welcomed the revised incentive package, which will ensure that South Africa remains highly competitive as an offshore delivery location for GBS in an increasingly competitive global market impacted by the digital economy and the journey into Industry 4.0.
BPESA chief executive Andy Searle said the industry welcomed the changes.
“We are confident that our value proposition underpinned by these well-tailored incentives will offer real value to investors for years to come. The government’s continued support for this sector is applauded and hopefully sends a clear message to investors in the UK and elsewhere that South Africa is serious about your business and will continue to put great effort and resources into attracting and retaining your investment in South Africa,” said Searle.
BPESA Newsletter – December 2018 Dear Stakeholder The third Quarter (September to November) of the 2018 Financial Year has come to an end and with so much packed into the three months it passed by seemingly in a flash! A big thank you and […]
BPESA, together with the dti, take pleasure in producing the international Jobs Report for the 3rd Quarter of 2018. 3,115 new international jobs were created between 1 July and 30 September 2018, which is 4,5% more than Quarter 2, keeping the rolling CAGR well […]
In the State of the Nation Address in February, I announced that a central priority for government this year is to encourage significant new investment in our economy.
This is a necessary condition for the growth of our economy and the creation of jobs on a scale that will significantly reduce current levels of unemployment.
New investment in productive sectors of the economy is therefore vital to our efforts to reduce poverty and inequality.
Investment in our economy has declined in recent years.
While total fixed investment in our economy stood at 24% of GDP in 2008, it has declined to around 19% last year.
The National Development Plan says we need to increase this to at least 30% of GDP by 2030.
Foreign direct investment declined from around R76 billion in 2008 to just R17.6 billion last year.
This has been driven by low business confidence and regulatory uncertainty; and has resulted in slow growth, along with poor growth in employment.
Economic conditions in the country are changing, however, and we are determined to work with all social partners to seize the opportunities that are opening up for greater investment and faster growth.
In line with our commitment in the State of the Nation Address, we are therefore launching an ambitious new investment drive.
This drive will culminate in an Investment Conference to be held in August or September 2018.
The Investment Conference, which will involve domestic and international investors in equal measure, is not intended merely as a forum to discuss the investment climate.
Rather, we expect the Conference to report on actual investment deals that have been concluded and to provide a platform for would-be investors to seek out opportunities in the South African market.
We are determined that the Conference produce results that can be quantified and quickly realised.
We are aiming through the Investment Conference to generate at least US$ 100 billion in new investments over the next five years.
Given the current rates of investment, this is an ambitious but realisable target that will provide a significant boost to our economy.
In preparation for the Investment Conference, I have decided to appoint four Special Envoys on Investment, who will spend the next few months engaging both domestic and foreign investors on the opportunities that exist in this country.
These are people with valuable experience in the world of business and finance and extensive networks across major markets.
I am therefore pleased and grateful that the following South Africans have accepted our invitation to be the President’s Special Envoys on Investment:
• Mr Trevor Manuel, former Minister of Finance,
• Mr Mcebisi Jonas, former Deputy Minister of Finance,
• Ms Phumzile Langeni, Executive Chairperson of Afropulse Group and a non-executive director of several leading South African companies,
• Mr Jacko Maree, Chairman of Liberty Group and former CEO of Standard Bank.
They will be travelling to major financial centres in Asia, Middle East, Europe and the Americas to meet with potential investors.
A major part of their responsibility will be to seek out investors in other parts of Africa, from Nairobi to Lagos and from Dakar to Cairo.
This is part of a broader push by government to advance economic integration in the Southern African region and across the continent.
In addition to the processes we must undertake within the country to finalise our participation in the African Continental Free Trade Area, we will also be pursuing other initiatives to promote intra-African cooperation on investment, infrastructure development, tourism and agriculture.
I am also pleased to announce the appointment of Ms Trudi Makhaya as my economic adviser. Among her immediate responsibilities will be the coordination of the work of these Special Envoys and a series of investment roadshows in preparation for the Investment Conference.
The engagements that we expect to take place will also be part of a process towards the establishment of a Presidential Council on Investment.
This evening, I will be departing for London to participate in the Commonwealth Heads of Government Meeting.
We will use this opportunity to meet with several major global companies to brief them on recent developments in the country and on our assessment of the economic challenges, risks and opportunities.
We will be communicating a clear and consistent message – that South Africa is an investment destination with significant unrealised potential.
Some of our fundamental strengths are well known. We have a thriving democracy, an independent judiciary and strong institutions. We have an advanced and diverse economy, a sophisticated and well-regulated financial sector, and extensive transport, telecommunications and energy infrastructure.
We also have a youthful population, an improving basic education system and significantly expanded higher education enrolment. In other words, despite the challenges, we are working hard to build our skills base.
We will brief investors on the measures we are undertaking to improve the investment environment.
Further to the announcements we made in the State of the Nation Address, we are making progress in stabilising strategic state owned enterprises, improving the functioning of key institutions like SARS, finalising a new Mining Charter through consultation with all stakeholders, processing legislation for the implementation of the National Minimum Wage and the promotion of labour stability, and launching the Youth Employment Service to increase the employability of first-time job seekers.
In addition, work is underway to rationalise and streamline investment regulations and reduce the cost of establishing and running businesses.
Through the more effective use of industrial incentives, special economic zones and local procurement requirements, we aim to increase investment in manufacturing and related sectors.
We are creating more opportunities for new market entrants through our competition policy, preferential procurement measures and expanded support to small and medium-sized businesses.
After several difficult years, South Africa is emerging as an increasingly attractive destination for investment.
We are encouraged by the growth in business confidence over the last few months, the strengthened rand and improved growth estimates.
We welcome the recent assessment by Goldman Sachs that South Africa is at the top of the list of potential candidates to be the “next big emerging market story” of 2018. It notes that the growth cycle is picking up after an earlier downturn in investment growth. It says that improved confidence is likely to lead to a better outlook for growth and investment.
This is confirmed by the South African Economic Update released this month by the World Bank. While the economy’s performance is improving, it notes that higher growth will require ambitious structural policies. It estimates that a successful conclusion of the Mining Charter deliberations, for example, could increase investment in the sector by 25 percent.
It is for these reasons that we are embarking on an ambitious investment drive alongside the implementation of necessary economic reforms.
South Africa has entered a new era of hope and confidence.
The task we have now is to ensure that this becomes an era of investment, growth, job creation and meaningful economic transformation.
JOHANNESBURG – South Africa has been named the “Global Destination of the Year” by the Global Sourcing Association, the department of trade and industry (dti) said late on Wednesday. The Minister of Trade and Industry, Dr. Rob Davies says the award which is the fifth […]