Opinion piece: Immigration laws and offshore investment
STRINGENT LAWS MAKE IT DIFFICULT FOR INTERNATIONAL COMPANIES TO DO BUSINESS IN SOUTH AFRICA
In order for the South African economy to grow and provide sustainable employment, there has to be an increase in offshore investment into the country. This, however, is dependent on a review of the new immigration laws as they are effectively hindering the process of attracting offshore clients. Without a review of these laws, which came into effect in May this year, we are reducing the potential the offshore contact centre industry has on economic growth.
So says Lisa Roos, General Manager of Business Development for Merchants, South Africa’s leading business process outsourcing and customer experience provider. “Offshoring brings foreign investment into the country and creates new employment. However, the process followed in setting up an offshore contact centre, requires that international expertise is brought into the country to ensure a smooth transition. Under the new immigration laws, this is becoming increasingly difficult and time consuming and this may result in many companies thinking twice about selecting South Africa as an offshoring destination.”
South Africa has always been positioned as an offshoring destination of choice due to inherent cost savings, government incentives, excellent infrastructure and the local skills available. “The competition amongst offshoring destinations is significant, however, and other geographies are making it a lot easier for international skills to enter their countries. It simply makes no economic sense for organisations to wait up to six months, and sometimes longer, for approvals of work permits for South Africa when other countries process these in much shorter time frames.”
The new laws have been deemed unconstitutional by some parties and have come under fire over the past month. “What government needs to understand is that bringing these international experts into the country is not about taking jobs away from South Africans,” she says. “Instead it is about bringing a handful of individuals into the country to impart their expertise to locals to create hundreds or even thousands of jobs. It is only by doing this that we will be able to leverage offshore opportunities to drive sustainable employment and economic growth.
“The competition amongst offshoring destinations is significant, however, and other geographies are making it a lot easier for international skills to enter their countries. It simply makes no economic sense for organisations to wait up to six months, and sometimes longer, for approvals of work permits for South Africa when other countries process these in much shorter time frames.”
“The existing grants and incentives are definitely helping in attracting offshore contracts,” says Roos. As it currently stands international companies can significantly reduce their operational costs as a result of these incentives. “This benefit, however, is becoming overshadowed by the difficulty in bringing foreign expertise into the country and this must be addressed as a matter of urgency.”
Roos believes it is imperative for the country to support offshoring initiatives by making it easier to do business in South Africa as this will lead to a fundamental increase in employment. “Effectively it will result in foreign investment flowing into the country and we will be importing much needed jobs.”