The Department of Trade and Industry (DTI) has approved grants worth more than R157 million for the Business Process Outsourcing (BPO) Incentive Scheme.
In response to a parliamentary question in the National Council of Provinces, minister Rob Davies said grants are worth R157 760 000.
He also said they will be disbursed to 10 projects over the next three years and will create more than 11 000 jobs.
“The incentives will be utilised to offset expenditure in order to make applicants more globally competitive, when servicing offshore clients out of South Africa. The grants cover only a portion of the operational costs related to the project. Disbursements are not made upfront but are paid only after confirmation that jobs have been created.”
The minister said there were no additional restrictions placed over and above the normal forex regulations on how companies can utilise their grants.
He explained that the jobs created by the beneficiaries have to be in place for a minimum period of three years.
“This implies that if a company creates additional employment at the end of the third year, it will have to retain all jobs over a period of five years. There are no further restrictions preventing companies from ceasing operations after the incentive period.”
Companies that will receive the grants include Old Mutual Assurance, Amicorp South Africa, Amazon Development Centre, First Call Centre Solutions and Call Centre International, according to the department.
Local attraction
SA has been ranked among the top three emerging BPO destinations in the world.
A recent Everest Consultancy survey, undertaken among 340 respondents, found SA is ranked among the top three outsourcing destinations when established markets such as India and the Philippines are excluded.
BPO was meant to be one of the country's key economic drivers when the Accelerated and Shared Growth Initiative for SA was launched more than five years ago.
The growth plan, which aimed to halve unemployment and poverty by 2014, has since been replaced by the New Growth Plan. This scheme seeks to create five million jobs in the next decade, a target that could be aided by the BPO sector.
However, SA's BPO sector has battled to reach its potential for several years, facing constraints such as rising electricity prices, the high cost of communications, and an insufficient pool of skilled workers.
The DTI's incentive plan, launched in January, will trim operating costs by up to 20% since investors will be paid R112 000 for each full-time job created and maintained.
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