The local industry body of the high-value global business services (GBS) sector is closely monitoring the rising geopolitical shockwaves between SA and the US.
The sector has witnessed significant investment from global players in recent years, as well as brought offshore opportunities to SA, providing youth employment opportunities.
During a media briefing on SA’s enhanced GBS advantage, hosted by Business Process Enabling South Africa (BPESA), CEO Reshni Singh detailed SA’s competitive-edge in global services, its GBS master plan and three-fold growth in the last five years.
GBS sector official trade body BPESA − in collaboration with the Department of Trade, Industry and Competition (DTIC), InvestSA and Harambee − yesterday unveiled a refreshed national value proposition for the sector that champions SA as a premier destination for GBS.
The strategy also aims to attract increased foreign direct investment and create 500 000 cumulative jobs by 2030.
Singh explained the jobs target aligns with SA’s strength in the English language, with a predominant focus on markets such as the UK, US, Australia and a few other English-speaking outsource markets.
The UK remains SA’s largest source market for global business services delivery, with a 55% share in terms of headcount. However, the US market has witnessed significant grown, with 33% of globally-focused workers servicing that market, up from 1% in 2019.
Responding to a question on how the political tensions between SA and the US could impact this important market, Singh explained: “We have aspirations to be able to grow that, for this year, to at least 38%. Five percent is quite significant when talking about these kinds of numbers and job opportunities.
“Obviously, the geopolitical tensions currently between SA and the US are high on our focus area. We’ve been given a lot of assurance through the Presidency, BLSA [Business Leadership South Africa] and others around the fact that the diplomatic relations and ties between the US and SA are still there and that we shouldn’t be too concerned about it.
“We want to see some action; we want to see that things are going to happen fast because we don’t want it to impact this sector. It’s going to be something that we will be watching very closely.”
South Africa’s diplomatic relations with the US have been under strain since the start of president Donald Trump’s second term in office.
Since coming into power, Trump – together with his ally South African-born tech billionaire Elon Musk – has taken issue with SA’s policy stance on land expropriation, BBBEE policies,as well as what’s been termed enjoying close relations with countries that are not US allies.
More recently, SA ambassador to the US Ebrahim Rasool was expelled by the US State Department in Washington, for reportedlylaunching a “diplomatic attack on the US that could not be overlooked”.
The expelled ambassador was declared “persona non grata” by US secretary of state Marco Rubio on Friday, following comments he made about the Trump administration in a dialogue.
The Presidency has noted the latest developments and described them as “regrettable”. It urged relevant and impacted stakeholders to maintain the established diplomatic decorum in their engagement with the matter, expressing SA’s continued commitment to building a mutually-beneficial relationship with the US.
SA’s jobs green shoot
The GBS sector, formerly classified as business process outsourcing (BPO), was identified several years ago as a key growth driver to create jobs and aid the country in boosting economic growth. South Africa currently has a 32.1% unemployment rate, according to Stats SA.
According to BPESA, global business services grew from 65 000 jobs in 2019, to an estimated 150 000 in 2024, in SA. Market revenue grew from $1.04 billion (approximately R18.9 billion) to an estimated $2.91 billion (just under R53 billion), in the same period, driven by significant investment from global players.
Singh said the GBS sector brings in net new jobs, not only through local economic activity, but by bringing offshore opportunities to SA.
It is made up of any IT-enabled service that can be outsourced and offshored, she stated. “Predominantly, SA has strength in what is called voice BPO activity – contact centres that are set up in SA to service offshore clients. We’ve transitioned to IT-enabled services, such as digital, ITO [IT operations], finance and accounting, legal services, etc.
“We believe the sector’s unique blend of cost-effectiveness, talent and infrastructure, and its proven track record of success, competitiveness and maturity in this market will continue to attract foreign direct investment to our shores and drive inclusive growth for the country.”
South Africa’s offshoring locations are concentrated in Cape Town, followed by Durban and Johannesburg. The City of Tshwane, East London and Gqeberha are also leading locations, offering a significant pool of entry-level talent and fostering the development of future workforce potential.
Many global and regional companies have set up or expanded their operations in SA, representing a variety of industries, such as technology and communications, financial services, legal and healthcare.
This has created a positive feedback loop, reducing perceived market risk for new entrants, noted Singh.
“The GBS sector has become a powerful engine for inclusive economic growth and has the South African government’s committed support. As outlined in the latest budget speech, the sector’s competitiveness will continue to be enhanced through various incentive programmes under the DTIC, through sector-specific incentives, as well as incentives for special economic zones.”
According to Singh, BPO operators have strategically expanded into tier two and three cities, including Soweto and Alexandra in Gauteng, Ilembe and Umlazi in KwaZulu-Natal, and Mitchells Plain and George in the Western Cape.
“In the process, the sector has catalysed entrepreneurial growth through the emergence of small, medium and micro enterprises that have created sustainable, quality employment opportunities in regions previously underserved by the formal economy.
“As we work to attract significant investment and create substantial job opportunities, particularly for the youth, developing a diverse, skilled and future-proof workforce remain sour highest priority to ensure sustained growth and long-term industry resilience,” Singh concluded.
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