Globalization Advisory

Destination Africa: Is Africa Emerging As A Viable Outsourcing Destination?

Dr. Pradeep K. Mukherji

The unprecedented growth in the global sourcing of Technology, Business and Knowledge Managed Services has seen the emergence of multiple geographies and countries as provider destinations of these services. As clients evaluate alternate service provider geographies; many African countries, with an inherent advantage of a large, young workforce as well as good linguistic capabilities are gaining traction to exploit this market shift.

The unprecedented growth in the Global Sourcing of Technology-Business and Knowledge services has seen the emergence of multiple geographies and countries as provider of these services. While countries like India and China address more than 80% of the demand for global sourcing of services, regional clusters like those in Eastern Europe and Latin America have emerged. These locations provide certain advantages while servicing near-shore markets in Europe and US.

The ongoing economic downturn and rising cost of labor in countries like India, has prompted organiza-tions in US and Europe, contemplating global outsourcing, to evaluate alternate service provider geogra-phies. European companies, though relatively later to realize the benefits of outsourcing, have been pur-suing an aggressive strategy over last few years. Many African countries, with the advantage of younger demographics and good English and French language skills, are realigning their focus to address this market shift. While South Africa has already established itself as a major outsourcing destination in the continent, many other African countries like Kenya, Ghana, Egypt, Mauritius, Tunisia and Morocco are also honing their respective Business Process Outsourcing (BPO) offerings to address the opportunity.

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