SA Is The Stepping Stone To Africa - For Now

Published: 24 February 2012

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By Annelize Van Rensburg

Johannesburg: Current executive recruitment trends in Africa are rapidly becoming both a confirmation of conventional wisdom and a challenge to it. Yes, SA is the springboard into Africa for many companies, as our national strategists say. But how long will that status hold, given the high rate of growth in alternatives such as Nigeria?

Several trends demand attention. The first relates to Africa’s growing appeal in a changing world no longer dominated by the European and US markets. Africa’s population topped one billion in 2009, according to a United Nations revision of population numbers. So, increasing numbers of consumers underpin economic growth across sub-Saharan Africa.

Africa’s economic growth shows faster recovery than many European and North American economies. The numbers also show that growth is often stronger outside SA ’s borders.

Africa’s rapidly improving prospects are reflected by changing volumes at an executive search specialist such as Talent Africa. By the middle of last year, 21% of search assignments were for placements elsewhere in Africa, or with African scope from a South African base. That percentage has doubled in two years.

Several other developments deserve comment. The South African diaspora is beginning to go into reverse. South Africans who left for overseas find their skills are less marketable in low-growth economies. They are returning to SA and often welcome deployment in Africa.

This trend supports our hub positioning, as does the current mix of Africa-bound candidates. South Africans predominate, followed by executives from Zimbabwe, then Nigerians (a fast-growing category), then Kenyans.

Even when candidates are Nigerian or Kenyan, hub infrastructure such as OR Tambo International Airport is often helpful. Top executive performers are frequent flyers. It is possible to make initial contacts and carry out interviews at the airport or in nearby Sandton before they fly out to other African destinations.

In some important respects, official policy could ultimately undermine SA’s positioning as a talent hub. Some recruitment requirements are extremely onerous. For instance, before skilled expatriates can be recruited by SA -based companies, it must be proved that local candidates cannot do those jobs to the same level of competence.

SA is happy to import flat-screen TVs but not so happy to import skills that grow the economy.

Further challenges are created by the application of black economic empowerment legislation to multinationals and some smaller businesses.

Other developments also challenge SA’s hub status. Many places with rising placement volumes are much closer to East or West Africa than SA. The discovery of oil in Uganda has led to a strong focus there. The oil and non-oil economy of Nigeria also attracts growing attention. Placements into the Democratic Republic of the Congo and Ghana are also rising.

In recent months, the top four placement destinations outside SA have been Lagos, Nairobi, Dar es Salaam and Kampala. Volumes are tilting to the north.

The quality of African candidates from outside SA is also material. Executives from other African countries frequently have stellar qualifications and may have studied in Europe or the US. This creates a challenge to SA’s education system to produce top performers capable of having an effect in the business world.

The sheer weight of numbers being hired in high-growth economies to the north is also pertinent. The African Economic Outlook report by the African Development Bank estimated growth in Nigeria and Tanzania last year at 6,9%, with the Congo expected to grow by 8,4%. The report put Nigeria among Africa’s 10 fastest growing economies, with SA among the 10 slowest.

Admittedly, SA has a large economic base and a head start over most of Africa, but a lot of business excitement is now focused further north.

The speed with which some African authorities process international executive work permits is also an eye-opener. In an increasingly global economy, ready access to top talent helps drive continued growth.

Therefore, talent acquisition has to be promoted rather than stalled. Winning nations that grow jobs are both business-friendly and relocation-friendly.

All in all, SA retains its position as the stepping stone into Africa. But the question gathers urgency: For how long?

• Van Rensburg is director of Talent Africa.