Deloitte SA Blog


The importance of electricity to continental growth in Africa

Confronted by pedestrian growth and sovereign debt risk in the developed markets, investors are looking to emerging markets for growth. For Africa, this is an opportunity to finally realise the potential inherent in natural resources and the growing middle class (demographic dividend potential). It is estimated that Africa’s GDP will grow at an average of 5% in the next decade, with six of the
fastest growing economies located in the continent. Growth can only be guaranteed by ensuring that appropriate energy resources are in place.

For a more detailed discussion please contact Shamal Sivasanker (Deloitte Southern Africa Power Industry Leader) at

Building energy platforms on a solid foundation

Many African countries have escaped the worst consequences of the recent global economic meltdown and have been displaying levels of year-on-year GDP growth that is second only to China and India. It is anticipated that the external demand of oil and mineral resources from China and India are the main drivers of growth of Africa’s demographics which will ensure that this growth is sustained. According to the World Bank, by 2015 up to 45% of the African population will be under 15 years old. This generation is expected to be better educated with increased disposable income and will drive Africa’s growing urbanisation and consumption spending. According to the City Mayors, an independent think-tank, which studies urban affairs Bamako in Mali and Lagos in Nigeria are two of the fastest growing cities in the world since 2006 and the growth is expected to continue until 2020.

Economic growth in Africa has however highlighted the infrastructure deficiencies that would require, according to the Economist Intelligence Unit, as much as US$93bn in the power sector alone. In recent years, electricity access has increasingly also been at the forefront of the African governments mind, with many of the countries in the continent having at least one agency looking after rural electrification programmes.

As leaders across the continent move to create investor friendly environments, it has become increasingly obvious that sustainable growth can only be achieved through infrastructure growth driven by a strong energy sector. For example, the study by Solarin Sakiru Adebola published in 2011, found that that capital formation in Botswana will have adequate impact on the economy if there is sufficient electricity in the economy.

Although it is realistic to expect that world-class energy facilities can be built to meet the many and varied infrastructure projects across Africa, the continent as a whole still has to face the allied challenges of acquiring the correct skills for energy development projects as well as the funds required to finance technologies that can vary from coal-burning power stations in the South of Africa to the establishment of world-class geothermal projects in East Africa.

For a more detailed discussion please contact Shamal Sivasanker (Deloitte Southern Africa Power Industry Leader) at

Read the full article . . . . Navigating to a new African future

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Emerging market growth strategies, practices and outlook

This Deloitte paper presents the results of a survey conducted amongst 628 executives to understand where they perceived the greatest revenue opportunities in emerging markets, which growth strategies have proved most successful, and the challenges companies face.

Fortresses and footholds – Emerging market growth strategies, practices and outlook

At a time when most developed economies are still struggling to fully recover from the 2008 global financial crisis, China, India, Brazil, and other emerging markets are projected to account for a majority of the growth in global gross domestic product (GDP) over the next several years. While multinational companies have historically used emerging markets primarily to reduce costs, organizations are increasingly looking to these markets as a platform for revenue growth through 2014 and beyond.

In mid-2011, Deloitte Consulting LLP conducted a survey of 628 executives to understand where they perceived the greatest revenue opportunities in emerging markets, which growth strategies have proved most successful, and the challenges companies face. The survey respondents included 389 executives from companies that currently generate revenues from one of 10 key emerging market countries or regions: China, India, Southeast Asia, South Korea, Brazil, Latin America outside Brazil, Eastern Europe and Russia, Turkey, Egypt, and South Africa.

The companies surveyed found that the greatest success in emerging markets came not from simply establishing a sales office and selling their existing products and services. Instead, these companies came to understand the special requirements of customers in each market and then designed offerings to meet their needs at market appropriate prices. A key ingredient in success was to establish company-owned production, service, distribution, R&D, and other operations in emerging markets to become closer to customers and part of the local business community.

Download the paper . . . . Fortresses and footholds – Emerging market growth strategies practices and outlook

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Deloitte Human Capital Trends 2012 – Operation Globalisation

Many companies around the world are moving to new global operating models, driven by the rapid rise of emerging and developing economies — both as customers and as sources of talent — and by continuing pressure to reduce costs.

Historically, companies doing business outside of their home country have tended to rely on one of two operating models. First is an entrepreneurial model (sometimes known as an international model) in which the rest of the world is subordinate to the company’s home market. Second is a federated model (sometimes known as multidomestic) in which multiple geographies are all treated as distinct and separate.

Looking beyond these two established models, many leading companies are increasingly shifting toward a third model, where major business operations (including both front- and back-office functions) are globally integrated, with the company’s home market treated as just one of many global markets.

The move toward a globally integrated operating model is likely to be one of the most significant transformations a company will ever face. Much of it involves people-related issues, such as change, talent and HR operations — and HR has important roles to play in this transformation. The question is how can HR leaders and their teams prepare to meet the challenge?

What’s driving this trend?

Rise of global customer markets

Different economies around the world are growing and recovering at different speeds. Mature markets in North America and Europe face flat or uneven demand, while emerging and developing markets — such as China, India, Latin America, Southeast Asia and the Middle East — are widely recognized as the primary engines for future growth. In Brazil, economic growth continues on the strength of its export economy, but also rising domestic demand. An estimated 35 million people joined the middle class between 2003 and 2009 and 20 million more are expected to be included by 2014.i In China, the middle class is already larger than the entire population of the United States.ii

Rise of global talent markets

Over the past decade, the talent pool has become increasingly global — and not just for commodity activities, such as offshore manufacturing, transactions and call center operations. Many companies are now using offshore resources for high-value activities, such as R&D, knowledge processing and advanced analytics. The United States used to lead the world in the number of 25- to 34-year-olds with college degrees. Now, it ranks 12th among 36 developed nations.iii Also, China produces 10 times more natural sciences graduates than the United States.iv While the quality of science and engineering graduates from emerging markets may not be as high as those from developed markets, the overall trend is clear.


Technology is accelerating the rise of global customer and talent markets by making it easy for people to communicate and collaborate, whether they are in adjacent cubicles or halfway around the world. In a business environment where everything is connected to everything else, geographic distances and national boundaries are almost irrelevant.

Cost pressure

The need to cut costs used to be the main reason for moving work to lower-cost locations and remains a key driver thanks to a tough economy that has prompted the most significant cost restructuring in decades. However, reducing costs is now just one of many important reasons for tapping the global talent pool.

Regulatory and capital requirements

In the financial services sector, increased regulation (both nationally and globally) and higher capital and solvency requirements are forcing many companies to adjust their global footprints and change how they operate.

Click here to read more about this trend.

Contact David Conradie at for a more detailed discussion

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Deloitte Human Capital Trends 2012 – Growth is job #1

Growth is at the top of the CEO agenda for many companies, with many organisations today focusing on three key strategies: emerging markets, mergers and acquisitions (M&A), and innovation. Although these strategies can offer significant growth opportunities, they each present a wide range of people-related challenges. CEOs expect Human Resources (HR) to play a much more active role in enabling these strategies.

What’s driving this trend?

Emerging markets represent significant new opportunity. Developing economies are growing much faster than mature economies and are becoming a primary source for revenue, profits, and talent. Understanding the capabilities, employability, and cultural implications of talent in these markets is critical to effectively prioritising growth objectives and leveraging the opportunities they represent.

M&A is often the fastest way to expand a business. But it’s not just a numbers game. These days, more and more companies are using M&A to obtain specific capabilities and talent in order to gain a competitive edge. Sustaining that advantage through thoughtful talent and organisation planning is important to realising the expected strategic value of the acquired assets.

Innovation can drive growth, even in a sluggish economy. A more holistic approach to innovation can enable companies to stimulate innovation broadly across their workforces and more effectively capture the resulting strategic advantages.

Click here to read more about this trend.

If you require a more detailed conversation on the subject, feel free to contact David Conradie at

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Results of the Deloitte Insomnia Index – Challenges and opportunities mining companies could face in Africa

If you require a more detailed discussion with our mining leaders, contact the Deloitte South Africa Mining Leader,  Tony Zoghby, at +27 (0)11 806 5130 or and the Deloitte South Africa Mining Advisory Leader, Abrie Olivier, at +27 (0)82 874 6040 or

Investing in African Mining Indaba Insomnia Index Findings

Delegates at the Investing in African Mining Indaba 2012 had the unique opportunity to participate in the Deloitte Insomnia Ondex. The fourteen themes selected had specific emphasis on challenges and opportunities mining companies could face when expanding their business into Africa. The Mining Indaba Insomnia Index results show that the top four opportunities mining professionals see in Africa are Exploration, Emerging Markets, Mergers & Acquisitions and Technology. The top four challenges identified by the Indaba delegates are: Infrastructure, Price volatility, Skills and Reporting & Compliance.

Mining the Detail


  1. Africa is home to the majority of the world’s mineral wealth and is therefore seen as a huge opportunity for mines and making exploration top of the opportunity list. Many parts of Africa are seen as an untapped market and therefore a potential growth opportunity.
  2. The expected demand from emerging markets for minerals could be seen as an offset to some of the risk that entering a new market brings. Africa’s relatively central location to emerging markets can be seen as a benefit from a supply chain perspective, both inbound and outbound.
  3. The major players in mining are typically target acquisition of developed assets and possibly see acquisitions of existing mid-tier mines operating in Africa as a faster growth and penetration strategy. Mergers & Acquisitions could overcome the lack of skills, local knowledge, goodwill and technology that mines could encounter when expanding into Africa. The consolidation of the mid-tier market specifically in South Africa could be another influencer for delegates seeing Mergers & Acquisitions as a big opportunity.
  4. Technology is an enabler for mines to mine deeper, assist with health and safety analytics and practices, employee training and to optimise operating efficiencies to name a few. It is therefore no surprise that miners see technology as an opportunity when considering expanding their business into Africa.


  1. The impact on operating efficiency due to lack of infrastructure in Africa is seen as a massive challenge for mines. The lack of rail and road, as well as power and water in large parts of Africa make it incredibly difficult for companies to start operations in Africa. Mines need to consider the extra funding and potential partnerships with local governments in order to operate in Africa.
  2. Price volatility is a global challenge and so it is not a surprise that executives see this as a challenge when considering doing business in Africa. The large fluctuations could impact significantly on profitability, cash flow and input costs which ultimately negatively impact the investment case.
  3. The respondents listed skills as a main challenge when considering doing business in Africa. Mid-tier miners who are not afforded the same access to a global network of skills that the large-scale miners have, may see this as more of a challenge as the cost of importing skills to remote areas in Africa can be very high. Attracting skills into remote locations continues to be a problem mines face as well as making careers in the mining industry attractive to Generation Y.
  4. Reporting and compliance in the different countries in Africa can be difficult to navigate without local knowledge and understanding of the specific requirements. Respondents listed this as the fourth biggest challenge when looking to expand their operations into Africa.


Africa clearly has many growth opportunities for the mining industry. The questions now are how do mines overcome the major lack of infrastructure, skills and local knowledge in order to leverage off these opportunities? And will the demand from emerging markets continue to grow and will mines in Africa be able to supply this demand in time in the most cost efficient manner?

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Deloitte Human Capital Trends 2011 – Emerging markets – The front line for growth and talent

This is the seventh article in the Deloitte Human Capital Trends 2011 series, titled Emerging markets – The front line for growth and talent

In 2010, leading U.S. automobile companies manufactured and sold more cars in China than in the United States. Not a bad indication of how the new world works. Today, businesses in many industries are scrambling to enter and expand operations across the globe. Emerging markets are the world’s growth engines — and are on the C-suite agenda. What does this mean for HR and talent?

For many HR organizations, emerging markets used to be the last thing they focused on. Now it’s becoming the first.

HR today is increasingly asked to support global growth strategies, with a specific focus on emerging markets. In fact, a recent Deloitte and Forbes Insight Survey highlighted the competition for talent that is occurring globally and in emerging markets as the most pressing talent concern today.

While some organizations and their HR leaders are well prepared for this shift in focus, many are not. Many companies find themselves with HR teams and capabilities, primarily sitting in the United States and Europe, with little experience and depth in emerging markets. The expected growth in demand — in both product and talent markets — in emerging countries has led to a significant shift in the emphasis and configuration of HR capabilities that will accelerate over the next few years.

Download the full article . . . . Emerging markets – The front line for growth and talent

Join the Deloitte South Africa – Human Capital group on LinkedIn

Vist the Deloitte Consulting South Africa website

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