Global companies pumping money into one South African sector

Global companies are set to significantly expand or set up operations in South Africa by the end of the decade to access its talent pool for the offshoring industry.

The offshoring industry is expected to grow to $6.8 billion by 2030, or 1.6% of gross domestic product, from an estimated $4.4 billion, or 1% of GDP, currently and create more than 212,000 skilled jobs, according to research conducted by global talent solutions firm Robert Walters. 

The growth offers a rare bright spot for a country struggling with one of the world’s highest unemployment rates at 33.2%.

It is also dealing with new pressure from US tariffs aimed at bringing companies back to America and criticism of its Black economic-empowerment policies, which were introduced after 1994 to address racial inequalities from colonialism and apartheid.

South Africa’s strong English proficiency, close time-zone alignment with Europe, and its growing reputation for high-quality business and technology services are key factors driving growth, according to the research published Tuesday.

This has enabled Africa’s largest economy to handle increasingly complex offshore functions, with demand strongest for professionals skilled in accounting, financial analysis, and auditing, it said. 

“More companies are viewing offshoring not as a cost-cutting tactic, but as a talent access strategy,” David Barr, chief executive officer for outsourcing at Robert Walters, said in the statement.

“What sets South Africa apart is its ability to offer both scale and sophistication. It’s this balance that is driving South Africa’s growing role in powering business-critical functions for international organisations.”