Outsourcing in Africa: finally a reality…
2014 would be the best year of the decade for the outsourcing market in EMEA, according to the Information Services Group. Indeed, the use of outsourcing of internal service activities is growing these days.
Globalization and the development of new technologies have made many countries more attractive to international companies. Indeed, in a rather tense global economic context, outsourcing appears to be THE solution to obtain economies of scale and thus reduce costs. But if a few years ago, outsourcing opportunities were mainly based on the low cost of labor, today they are based on specific assets such as: differentiation of service offers, risks and market potential, skills, environment, quality of infrastructures, cultural and linguistic affinities, etc. Confident of its assets, Africa wants to take advantage of the game and set out to conquer this flourishing market.
Outsourcing: a promising market and a vector of development
Advances in information and telecommunication technology, combined with a qualified and low-cost workforce, have made the Black continent the new Eldorado for outsourcing certain activities. Although Asia remains one of the main geographical areas for outsourcing, this market will soon reach saturation. For Africa, this is a real opportunity, because even if the main attraction remains its cheap labor, we note that some countries attract high-end activities, mainly in R&D.
Indeed, some analysts consider that ICT outsourcing is a dynamic market on the black continent and this is reflected in important infrastructure projects. Africa is thus emerging as THE new outsourcing platform in the face of countries that are already leaders in the sector such as India, China, etc. The outsourcing of business processes (software, business expertise, etc.) is a fundamental trend that African countries want to capture because, for them, the benefits are numerous: increase in foreign direct investment; fight against youth unemployment; positioning on the global chessboard of services export; etc. Thus, far from being a mature market, Africa has all the assets to seduce multinationals both in terms of infrastructure and dedicated offers.
States with key roles in the development of outsourcing activities
Countries such as South Africa, Morocco, Tunisia, Kenya, Senegal and Benin have understood the importance of undertaking profound structural and social reforms in order to position themselves as suppliers of choice for international contractors. In order to meet certain global standards and attract international capital, significant investments have been made: progress in ICT; an abundant and young qualified workforce; ongoing investments in infrastructure improvements (transport, real estate, energy) and the business climate.
The Moroccan authorities were the first to understand the challenges of outsourcing. They have taken advantage of their geographical proximity to the old continent and have made outsourcing and the IT sector a spearhead of their industrial policy. Already in 2013, the country was serving 18 countries in 8 languages and wanted to strengthen “in six strategic sectors including outsourcing and shared services”. Morocco is now very attractive to French and international companies and is setting an example on the continent.
Other countries, such as the Congo, are also beginning a process of modernization and industrialization. The Congo has just created the Investment Promotion Agency (API), an organization responsible for revitalizing the economic fabric and encouraging entrepreneurship through incentives to facilitate investment. With this new “actor”, the country wishes to improve its attractiveness to international investors. To this end, a trade fair dedicated to outsourcing in Africa should be held in Brazzaville, proof if any were needed that the country’s leaders have finally decided to jump on the bandwagon.
Faced with considerable untapped potential, African leaders are confident about the growth prospects of their economies in the coming years and are not hesitating to invest to finally boost their growth.
Source : https://employerofrecord-africa.com/