Africa’s outsourcing boom: young talent fuels industry growth

The business process outsourcing (BPO) sector in Africa – currently employing 1.2m full-time equivalent posts across more than 400 contact centres handling international outsourcing contracts – is set for exponential growth. A recent report by CCI Global, a prominent player in African outsourcing, projects that the continent’s BPO workforce will more than double by 2030. This surge is fuelled by the growing demand from global companies seeking outsourced customer service.

The report, conducted in collaboration with research firm Everest Group, forecasts the creation of up to 1.5m new BPO jobs in Africa over the next six years. South Africa, Kenya, and Egypt are poised to reap significant benefits, while emerging hubs such as Ghana, Ethiopia, and Rwanda are also positioned for substantial growth.

Several factors are fueling this expansion. Foremost among them is the fact that Africa offers significant cost advantages, with labour costs up to 80% lower than Western markets. Additionally, nearly half (45%) of companies surveyed report that African governments are actively creating a business-friendly environment through tax breaks, infrastructure development, and workforce training programs. Africa’s young, multilingual population further strengthens its appeal as an outsourcing destination.

Access to motivated talent pool

Martin Roe, CEO of CCI Global, a major outsourcing firm, attributes Africa’s booming BPO sector partly to the continent’s high youth unemployment. In an interview with African Business, Roe explains: “Our view as a company is that talent is actually quite well distributed globally, but opportunities are not, and unfortunately in many African countries highly educated and motivated young people can’t get a job.”

BPO companies like CCI Global are creating significant new private-sector jobs across Africa, Roe says, benefiting from this motivated talent pool. The firm has about 15,000 employees across South Africa, Kenya, Ghana, Rwanda, Ethiopia, and Egypt.

“What characterises all those markets for us is the availability of highly talented people to be able to deliver better outcomes,” says Roe, highlighting metrics such as sales, conversion, net promoter score and customer satisfaction.

CCI Global primarily serves the US market, the largest BPO market globally, as well as the UK, Australia and other mature global markets. “We’ve been building our business in Africa since 2006 and 70% of our business is servicing the American market,” he says, emphasising that CCI Global specialises in handling complex customer interactions for major brands. CCI Global has about 80 clients drawn from sectors such as telecoms and media, high-end retail, financial services, and the new economy and high-growth technology businesses.

“The business process outsourcing industry has traditionally focused on low-cost, high-volume interactions between companies and consumers. However, automation, self-service options, chatbots and AI are rapidly reducing the need for such services,” Roe explains. As a result, the remaining interactions tend to be “complicated and highly emotional”.

According to Roe, traditional offshore locations such as the Philippines or India, and even source markets such as the US, the UK, and Australia, lack the specific skill set required for these complex, emotional interactions.

“We think the kind of humans that can handle complex and emotional interactions exist in pretty large numbers in Africa.”

Customer connection

Language is also a key factor when BPO companies consider setting up shop in Africa, Roe notes. CCI Global is predominantly anglophone in terms of the end markets it serves. However, “it’s about more than just speaking English,” he says. “It’s understanding the nuances of English, like sarcasm and irony and having a connection with a customer.”

While English speakers are in demand, CCI Global is expanding its language capabilities to match linguistic trends in source markets. “We’re building multilingual services in Rwanda and Egypt,” he says.

Roe sees a “huge opportunity” for Africa to become a major player in global BPO. However, he emphasises that Africa needs to adequately prepare to make the most out of the expected wave of investment. The good news is that governments across Africa increasingly recognise the BPO sector’s job creation potential, he argues.

“Increasingly in Africa governments are recognising that rapid job creation is really difficult and there are very few sectors that can create as many jobs as quickly as the BPO sector.”

This recognition has translated to “enabling policies and regulations” for the industry in some countries.

“The playing field in terms of legislation and ease of doing business is improving for sure. But that historically has been a challenge.”

However, bottlenecks remain. “Infrastructure can be unreliable, and currency instability can be a problem,” Roe acknowledges.

Kenya stands out

The company in May unveiled a new call centre in Tatu City, a 2000-hectare special economic zone (SEZ) on Nairobi’s doorstep. CCI’s new call centre represents a $50m investment and is said to be the largest facility of its kind so far in East Africa.

“Our decision to expand across Kenya reflects our profound confidence in the country’s thriving BPO industry and its capacity for sustained growth,” Roe said during the launch.

He tells us that the company now employs around 5,000 people in Kenya. “We recognise that raw talent exists in very large numbers in Kenya, that is why we entered the Kenyan market in 2016 and are growing at such a rate.”

“We’re a people business and we go where the talented people are. Kenya has been a major success story and that’s entirely down to the kind of people that we’ve managed to hire,” Roe says.

Investor confidence grows

According to Brenda Mbathi, CEO of Two Rivers International Finance and Innovation Centre (TRIFIC), the rapid growth of SEZs dedicated to business services has helped bolster investor confidence in Kenya’s BPO sector.

She argues that SEZs offer a compelling package for businesses, including tax breaks, streamlined regulations, and high-quality infrastructure.

Investors are recognising the potential of SEZs dedicated to business services and are actively backing them, says Mbathi. She points to the fact that TRIFIC, Kenya’s first privately owned SEZ focused on business services, recently secured a $47.5m investment from Vantage Capital, an African investment firm.

“This funding will support several key projects, including the expansion of our state-of-the-art business facilities, the development of advanced IT infrastructure, and the enhancement of our service offerings,” she notes.

Some of the benefits that TRIFIC offers would-be-investors interested in operating their businesses from its premises include streamlined procedures for business registration, licensing, and compliance.

“Incentives available to businesses include competitive corporate tax rates, exemptions on import and export duties, VAT exemptions, and simplified customs procedures. We also offer incentives for talent mobility and ease of repatriation of profits,” she says.

Additionally, TRIFIC provides tailored support services, including talent acquisition and training programs, to assist BPO companies in recruiting and retaining skilled personnel.

Mbathi highlights TRIFIC’s strategic location in Nairobi’s diplomatic blue zone. It is backed by Nairobi Securities Exchange listed investment firm, Centum. It encompasses residential developments and dining, retail, and entertainment venues.

Mbathi believes that the outlook for the BPO sector in Kenya is highly promising due to the availability of talent.

“With a growing young and tech-savvy population, Kenya has a vast pool of talent that BPO companies can tap into. The government’s focus on improving ICT infrastructure and promoting the digital economy further enhances the sector’s potential.”

However, continuous skills development, cybersecurity threats, and infrastructure upgrades need to be addressed, she argues.

“The opportunities lie in expanding service offerings beyond traditional call centres to include higher-value services such as IT support, financial services, and healthcare.”