South Africa’s business process outsourcing (BPO) sector faces a trade cliff. As tensions with the United States mount, the looming loss of African Growth and Opportunity Act (AGOA) benefits threatens to halt years of progress and thousands of future jobs.
Ambitions collide with geopolitical risk
The South African BPO industry has set a bold goal of increasing its U.S. operations by 38% in 2024. However, escalating tensions between South Africa and the U.S. could hinder this progress if the country gets excluded from AGOA. AGOA provides duty-free access to the U.S. market for certain African nations, fostering economic growth and foreign investment.
Business Process Enabling South Africa (BPESA) CEO Reshni Singh has emphasized the need for strategic support from government officials and sector partners to ensure the industry’s continued expansion. Without the trade advantages AGOA provides, South African BPO firms could face increased costs and reduced competitiveness in the global outsourcing market.
Can SA stay competitive without AGOA?
Beyond market expansion, the BPO sector aims to attract foreign investment to drive employment growth. BPESA has set an ambitious target of creating 500,000 jobs by 2030, positioning South Africa as a global outsourcing hub.
The industry’s highly skilled workforce, cost-effectiveness, and strong English proficiency have made it an attractive destination for international clients, particularly from the U.S. and the UK.
The potential loss of AGOA benefits could deter foreign investors, forcing businesses to reconsider outsourcing strategies. If South Africa’s trade relationship with the U.S. deteriorates, competitors such as India and the Philippines could gain an edge in securing contracts and investment.
Smart strategies for a shifting market
To mitigate these risks, BPESA advocates for diplomatic efforts to preserve South Africa’s trade status while exploring alternative markets. Here are some actions South Africa’s BPO sector can take to stay ahead:
- Offer more than low costs. Competing on quality and service, not just price, sets SA apart from rivals.
- Train for the future. Honing various skills, including AI, customer service, and languages, makes SA’s workforce irreplaceable.
- Expand beyond the U.S. Relying on a few markets is risky. Expanding into other regions, such as Africa, Europe, and Asia, can bring stability.
- Use AI to boost efficiency. Allowing AI to handle routine tasks so that agents can focus on more valuable work enhances productivity and scalability.
- Push for policy support. Government support is crucial. With the right policies, SA’s BPO sector could create 775,000 jobs by 2030.
- Partner for growth. Working with tech firms and universities drives innovation and talent development.
Despite the looming challenges, the South African BPO sector remains resilient. With continued government backing and a strategic approach to market diversification, the industry can navigate uncertainties and sustain its growth trajectory, ensuring long-term economic contributions and job creation.
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Briones, J. A. (2025, March 25). South African BPO sector faces U.S. tensions amid growth ambitions. Outsource Accelerator. Retrieved April 4, 2025, from https://news.outsourceaccelerator.com/south-african-bpo-sector-faces-u-s-tensions/
Moggee, R. (2025, March 11). What Trump 2.0 Means for South Africa’s BPO Sector. LinkedIn. Retrieved April 4, 2025, from https://www.linkedin.com/pulse/what-trump-20-means-south-africas-bpo-sector-ruben-moggee-uwblf/
