Why is South Africa still a relevant investment destination despite the negative press especially last year?

South Africa is one of the most advanced economies on the continent and it will continue to be for a long time, which makes it attractive as a platform for investment into Africa.
It is not only a point of entry but it has advantages: the quality of infrastructure, the sophistication of the financial services industry, the stock exchange, the regulatory environment, the maturity of the auditing profession in the services industry, ICT infrastructure, the availability of high-quality ports, roads, rail networks.
The challenge is to sustain this competitive advantage.

80% of Deloitte’s business in Africa comes from South Africa. Will that continue?

We see contribution from other African markets increasing as we move forward, but I see 60-70% of our revenue coming from South Africa for the next 5 years.
The contribution from East and West Africa will increase. The question is: “in what time frame?” There are a number of factors that need to come together around supporting services industry growth. First among them would be the allocation of capital and funding for technology implementation projects. Secondly, procurement practices need to be predictable. Currently, we are faced with long and complex procurement processes in many sectors, making the sales cycle long. The ability in firms like ours to invest in those markets for a predictable overturn is impacted by that. The ability of clients to internalise and implement solutions, the ability of local talent, and the ability to make mobility more efficient, all come together in terms of how quickly you can invest and drive sustainable growth in a local market.

Is “Innovation and Technology to leapfrog Africa into industrialisation” feasible?

South Africa is a well industrialised economy and that’s a great legacy for the journey onward. The World Economic Forum talks about the Fourth Industrial Revolution going into the digital age. It is the age of exponential technologies: robotics, artificial intelligence, the internet of things. In general, it is a dematerialisation: financial services sold through digital channels, automation, etc. We have a base that is a natural step into the Fourth industrial Revolution from where we are.
If you want to implement IoT, AI and robotics, you need to do it with businesses and eco-systems that are reasonably sophisticated. What these technologies do is create customer access at a low incremental cost. For example, if you want to make a banking product available to the unbanked, digital technology does create a transformative effect. The challenge in the banking system lies in high transaction costs and the cost of maintaining customers who don’t transact on the platform. If you have a digital banking platform, that changes. South Africa has all the ingredients for these eco-systems to materialise.
It is always a challenge but there is the opportunity to maintain the innovative South African spirit in order to establish and drive new innovation and to serve global markets.

What is Deloitte’s strategy to reach a client base in Africa through digitalisation?

We have already built digital transaction platforms for banks and insurance companies. We are seeing high levels of interest from both East and West Africa to embrace digital platforms. The organisations of the future will be focussed on the use of algorithms to answer clients more quickly and at a significantly lower cost. The competitive advantage is the level of engagement you generate.
Our formula for success is in our spirit of innovation, entrepreneurship, and thinking differently. One of the reasons why people are attracted to come to consult at Deloitte is the culture. There is a balance between the structure you need to be sustainable and the space people need to think differently and do new things.