Latest news with #R23-billion
Daily Maverick
06-07-2025
- Business
- Daily Maverick
Don't bot against the human touch — why AI won't replace Africa's call centre jobs
Contact centres are booming on the continent despite the rise of artificial intelligence. As it turns out, people want the human touch. When I was in my second year of varsity I spent six months working the night shift in a call centre in the Cape Town CBD. It sounded like a great idea on paper: I would be answering incoming phone calls for a large German airline (in German). How exciting, I thought somewhat naively, I'm going to help people to book their holidays all over the world. It was only after I started the job that I realised the truth about call centres and the people who phone them. No happy Germans were going to call me to book flights for them. The people who were phoning were the ones who had run into a problem they couldn't solve. They couldn't reschedule a return flight, or their luggage had been lost, or their connecting flight had been cancelled. In most instances, these were problems that I, a 19-year-old student sitting in an office in Cape Town, could not solve. Instead, my job was to de-escalate the situation as much as possible. People phoned in an absolute rage and I explained to them, as nicely as possible, why the airline couldn't help them, until they resigned themselves to their fate and hung up. If I did my job well enough they would end the call slightly less angry. I thought about this story when the City of Cape Town announced the opening of a brand-new call centre by TP Group (formerly Teleperformance), one of the largest business process outsourcing (BPO) firms in the world. The centre will seat 3,500 staff and there are plans to grow this to 10,000 by the end of 2025. This is not a one-off success story either. In Cape Town alone, nearly 100,000 people work in call centres. The industry poured R23-billion into the city's economy in 2024. That's a lot of people earning a living by telling people they can't solve their problems. Africa's moment is here South Africa has become Africa's crown jewel of customer service, consistently ranking as a top destination globally for BPO. But Kenya, Egypt, Ghana, Ethiopia and Rwanda are quickly coming up behind. Africa's BPO workforce stands at about 1.2 million full-time equivalent roles, according to research from CCI Global and the Everest Group. By 2030 this number is expected to more than double, with up to 1.5 million new jobs created. So what's driving the boom? Start with cost: African markets offer labour cost savings of up to 80% compared with Western markets. Then there's the continent's demographic edge. Africa is home to the world's youngest population, brimming with digitally savvy, multilingual talent. Governments are helping too by offering tax incentives, training programmes and infrastructure that make cities like Cape Town, Nairobi and Kigali more attractive by the year. Add to that a favourable time zone, and all the stars are aligning. Global companies want quality service at lower cost. African countries want jobs. And in between, a huge, untapped workforce is saying 'let's go'. But what about the robots? Of course, no conversation about customer service jobs in 2025 is complete without bringing artificial intelligence (AI) into the room (preferably with a name like Claire or Ava and a polite British accent). The fear about AI disruption in the BPO space is real. What if all these shiny new call centre jobs are just a temporary stopgap before conversational AI replaces the need for human agents altogether? On its LinkedIn page, Phonely AI (a company offering 'natural, human-like conversations with 100+ AI voices, voice cloning and seamless turn-taking') proudly announced that one of its clients had replaced 350 call centre workers with a single subscription. Some experts estimate that AI could handle 70% to 80% of customer interactions in the next two to three years. Many of the companies that tout the virtues of AI talk about its efficiency. But most people don't call a support line because they want efficiency. They call because something has gone wrong and they need help. They want empathy. Nuance. Someone who knows the difference between 'I'm locked out of my account' and 'I'm about to lose my mind'. And no matter how much data you feed a virtual agent, emotional intelligence doesn't come standard. A total of 70% of contact centre managers, in a study by Calabrio, said they believe AI will lead to more human agents, not fewer. That's because the human touch is moving up the value chain. Agents are increasingly seen as brand guardians, trusted to manage the emotionally complex, reputationally risky or high-stakes interactions that AI simply can't handle. Think of it as a collaboration: AI handles the grunt work and human agents step into the conversations that actually matter. The future isn't AI instead of people. It's probably more like AI plus people. What this means for Africa Africa is perfectly positioned to thrive in this hybrid model. The BPO jobs being created now aren't the dead-end, headset-in-a-booth clichés. Increasingly, they're pathways into tech, training and long-term careers. As the role of the agent becomes more complex and valuable, so does the need for upskilling, and that's where African talent can shine. Many of the call centre workers of today will be the AI supervisors, customer experience designers and data interpreters of tomorrow. And the infrastructure being built (both physical and digital) will serve as a launchpad for broader tech industry growth across the continent. Cape Town's newest call centre isn't just a building. It's a bet on people. On empathy. On the idea that, in a world obsessed with automation, being able to connect with another human is still one of the most valuable skills around. DM
Daily Maverick
26-05-2025
- Business
- Daily Maverick
The fuel levy increase vs VAT hike explained
While South Africans breathed a sigh of relief at the passing of the 2025 National Budget – and the relegation of the proposed VAT increase – one announcement of note was an increase in the fuel levy. While far less politically contentious than a VAT hike, debate has emerged over whether the fuel levy increase is, in fact, a 'stealth VAT'. It's a shift that raises valid questions about regressivity, affordability, and who will bear the brunt of the cost. When the levee breaks The National Treasury had aimed to raise R75-billion over three years by increasing VAT by 0.5% and then another 0.5% next year. But following political backlash and a likely legal pushback, the proposal was withdrawn. The fiscal gap, however, remained and needed plugging. advertisement Don't want to see this? Remove ads In his revised May 2025 budget speech, Finance Minister Enoch Godongwana announced that the shortfall would instead be offset by expenditure controls and new revenue measures, including a 16c/litre increase on petrol and 15c/litre on diesel, effective 5 June 2025. This marks the first fuel levy increase since 2021/22, bringing the total to R4.01 per litre – up from R3.85. Treasury projects that the change will raise R23-billion over three years, far less than the R75-billion expected from the shelved VAT plan, but still material given the constrained fiscal outlook. Read more: 'We tread water for another year' — this fiscal offering is a stopgap, not a solution Who suffers? 'Well, it is pretty much the same,' economist Dawie Roodt told Daily Maverick when comparing the VAT proposal to the fuel levy increase. 'The only difference is the quantum – the effect area will be less, simply because the rate of increase is less.' VAT applies broadly to goods and services (excluding zero-rated essentials), while the fuel levy targets a narrower tax base, but its economic reach is wide – transport, logistics, manufacturing and food pricing are all exposed – which means that costing goes up across the value and supply chains – and even if it is the case that this increase is more distributed than a VAT hike, its impacts are still disproportional. advertisement Don't want to see this? Remove ads According to the Pietermaritzburg Economic Justice & Dignity Group, which carries out monthly research on basic household costs, a minimum-wage worker commuting by taxi can spend more than a third of their monthly income on transport. Here, even a marginal fuel price increase imposes disproportionate burdens on low-income earners. As The Outlier reported in its weekly newsletter issued on Friday, 23 March 2025: 'While the 16c increase is just another charge for some of us, it will likely impact poorer communities more. When the fuel price rises, it hits South Africa's working class the hardest.' These costs also pass through to food prices and consumer goods. 'Fuel costs increase the price of most other goods and services as they push up transport costs across the board,' the publication said. A revenue hole that still needs to be filled Taking into account that the fuel levy will raise an estimated R4-billion in 2025/26, there is still quite a gap. 'Certainly not comparable,' Roodt notes. 'These two cannot be compared in terms of quantum, but in terms of the effect on the poor, that is pretty much the same.' To close the gap, the Treasury is counting on SARS to ramp up compliance and enforcement – targeting an additional R20- to R50-billion in revenue annually. These gains remain aspirational, however, and are not yet factored into formal projections, both in terms of revenue or timeline, with much still depending on SARS Commissioner Edward Kieswetter. advertisement Don't want to see this? Remove ads advertisement Don't want to see this? Remove ads An inflation signal? Perhaps not For now, headline petrol prices are expected to drop in June, thanks to a decline in the basic fuel price. That may temporarily mask the effect of the levy increase, but longer-term pressures persist. 'Hardly any inflationary pressures will be expected from this,' Roodt argues, 'because petrol prices are coming down in any event.' April CPI data shows inflation edged up from 2.7% in March to 2.8%, with key contributors being food, beverages, housing and services. Read more: SA consumer inflation ticks up in April but remains below 3.0% While the direct inflationary impact of the levy may be limited, the pass-through effects to goods and public transport fares are likely to show over a longer horizon. Is there a better way? It can be said that a fuel levy increase, much like a VAT increase, is regressive and disproportionately affects the most vulnerable. Roodt is unequivocal: 'South Africa's total tax regime is dramatically progressive already,' he says. 'There's nothing else that can be done to make it more progressive, basically.' A detailed look at the May 2025 Budget shows that indirect taxes – including VAT, fuel levies and excise duties – account for more than 45% of gross tax revenue, compared with 39.9% from personal income tax. VAT alone contributes more than R480-billion, and domestic goods and services taxes collectively represent a third of all state income. advertisement Don't want to see this? Remove ads advertisement Don't want to see this? Remove ads In other words, while the tax code may be progressive in theory, its impact is mixed in practice – and regressive taxes still carry weight in the government's pocket – but the fuel levy, unlike income tax, charges the same amount per litre regardless of the earner's bracket. This doesn't negate additional strain on middle and low-income households, but rather illustrates the increasingly narrow options available to the Treasury in an almost zero-growth environment, saddled by debt. A tax by another name? Ultimately, the decision to withdraw the VAT hike and instead raise the fuel levy was as much political as it was fiscal. VAT increases require legislation and expose divisions in Parliament. The fuel levy, by contrast, can be adjusted via the Budget process – no legislative amendment required. Whether this amounts to a 'stealth tax' or a strategic compromise depends largely on your own perspective, but as fuel-dependent households, which includes everyone within our borders in one form or another, absorb yet another marginal increase, it is clear that we are all still paying – just not through VAT. DM
