BPO rivals tourism as Western Cape’s economic driver
WESTERN CAPE, SOUTH AFRICA — The Business Process Outsourcing (BPO) sector has emerged as a major economic driver for South Africa‘s Western Cape province, now contributing as much to the regional economy as the tourism industry.
This revelation came during a presentation by the Western Cape Department of Economic Development and Tourism (DEDAT) to parliament. The presentation highlighted that the BPO industry employs 70,000 people in the province, mostly servicing offshore clients.
DEDAT Chief Director of Skills Development and Innovation Nezaam Joseph explained that each offshore job contributes R350,000 (US$18,766) in foreign revenue when accounting for associated services.
“With offshore BPO operators creating 70 000 jobs in the province, it implied that it contributes around R24 billion (US$1.29 billion) into the region’s economy, which made it as large as the tourism sector in terms of economic impact,” he stated.
The continued growth of BPO remains a key priority to address unemployment in the region. In its 2022/2023 annual report, DEDAT revealed that its support program helped create 7,900 new jobs servicing offshore BPO destinations, bringing in R2.7 billion (US$144 million) in foreign revenue.
Western Cape’s provincial government is also actively partnering with BPO companies on training programs to supply the talent needed for growth. Around 80% of graduates typically gain full-time jobs after completing these specialized skills courses.
“The BPO industry allows those individuals to transition into employment, and the cost of R15,000 (US$804) a job, makes the sector one of the cheapest in absorbing youth into employment,” Joseph added.
On the national level, the South African government has invested R3 billion (US$160 million) and implemented a Sector Masterplan to drive growth and development within the sector.
Minister of Trade, Industry, and Competition Ebrahim Patel also allocated R569 million (US$30 million) in initiatives for this financial year, with a further goal to create 500,000 BPO jobs nationally by 2030.
Patel also said that South Africa’s BPO industry would be focusing on expanding operations across provinces and towns, with a strong emphasis on high-value services in IT, finance, health, legal, and retail.
