Outsourcing software development to South Africa is a relatively new phenomenon. The South African government has been pushing for changes in the country’s legislation in order to attract more companies. A blurp from ZDnet:
A delegation from the country, including deputy president Phumzile Mlambo-Ngcuka, addressed industry members at the South African embassy in London on Monday, with Ms Mlambo-Ngcuka insisting that information and communications technology (ICT) was not merely “flavour of the month” in South Africa.
“We’re not necessarily trying to compete with the cheapest localities in the world,” said Mandisi Mpahlwa, a South African trade and industry minister, at the event. Mpahlwa pointed to recent investments by Barclays and Vodafone as examples of the “fair balance between cost and quality” the country could offer.
Although the South Africa claims it’s not competing with India on price, they’ve introduced one-off investment grants that partially offset the labor cost difference.
The two biggest problems that investors are facing are the state monopolies and the very high crime rates. Obviously, if you’re simply outsourcing a project (rather than setting up a company), you’ll not be directly affected by this.
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