Africa is becoming the biggest source of growth for South African businesses, according to the managing director of Sage VIP software, Anton van Heerden.

The MD made the comments in Johannesburg at the launch of Sage VIP’s next instalment of its human resources (HR) and payroll software, dubbed ‘VIP People’.

Sage VIP has over 25,000 HR and payroll customers in South Africa, according to van Heerden. But the business has an existing presence in markets such as Namibia and Kenya as well.

Talking about Sage VIP’s African business at the event, van Heerden said the percentage of turnover his firm gets from the continent has jumped from 2-3% about three years ago to 19% for the financial year ending September 2012.

He went on to say that Sage VIP’s percentage of African turnover could be “more than 50% in the next three to four years.”

And van Heerden has said his business is placing more emphasis on its African expansion with plans to establish regional East and West Africa offices to service more countries.

“(Africa) is probably the biggest growth source for South African businesses, especially considering how mature -- I won’t use the word saturated -- the market is in South Africa,” said van Heerden.

“More than half of our new business will come from non-South African countries in the future. And it’s happening at a rapid pace,” added van Heerden.

However, South African ICT consultant at Global Research Partners, Paul Booth, has told ITWeb Africa that an almost saturated South African market could be the reason for Sage VIP looking to focus more on Africa.

"I imagine they're reaching to a certain extent a saturation point in South Africa,” said Booth.

"In the rest of Africa, there are lots of SME businesses, in particular, that they can sell to and service and grow from as well," Booth added.

Booth told ITWeb Africa that more South African businesses are switching on to the economic rise of Africa, which recorded 5.8% regional GDP growth in 2012 according to the World Bank.

However, Booth adds that doing business in Africa is not easy.

Issues such as different languages, high travelling costs and the standard of local skills required to implement the likes of payroll software are challenges that South African businesses have to overcome.

"You can get your fingers burnt very easily.

"You've got to look at country by country and do it slowly," said Booth.

Nevertheless, van Heerden is upbeat about Africa’s growth prospects for Sage VIP as he says the rest of Africa is a “huge growth opportunity for us.”

Sage VIP changed its name from Softline VIP in a brand change. Softline - which has been the holding company for South African software products such as Pastel Accounting and Payroll, VIP Payroll, Sage 300 ERP (Accpac) and Sage ERP X3 - changed its name to Sage South Africa this year.