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Africa’s rise as GBS juggernaut

New report plots the growth of business process outsourcing and services in Africa

Key Facts and Highlights
• Africa’s GBS offshoring market is estimated to be worth $8.3 billion rising to US$11.7 billion by 2023.
• The combined domestic and international GBS/BPO market on the continent is expected to rise to $19.8 billion by 2023 from $15.1 billion in 2021.
• GBS workforces range from 1,200 est. (Mozambique) to over 261,000 est. workers (South Africa).
• Singular GBS country market sizes span US$9.7 million to over US$4.7 billion.
• Labor costs are low: the monthly cost of a contact center agent in Africa can range from US$546 to as little as US$175 per month.

The 2021 Africa Global Business Services (GBS) Benchmarking and Market Report affirms the continent’s status as a rising industry powerhouse. The report estimates that the continent’s GBS offshoring market is expected to reach US$11.7 billion by 2023 from $8.3 billion in 2021.

Notably, the combined African domestic and international GBS/BPO sector is estimated to be $15.1 billion and is expected to grow to $19.8 billion by 2023.

The Fundamental Message: Africa’s offshoring rise

The comprehensive market report reveals the key socioeconomic, demographic and technological drivers behind Africa’s rise as a GBS location of excellence, with business process outsourcing (BPO) and IT-enabling services at the forefront of Africa’s rapid growth rates.

Maturing and emerging GBS/BPO markets emerged as business continuity outsourcing/offshoring locations across the continent during the pandemic as global enterprises looked to decentralize geographic service delivery, spread and risk.

The most prolific value proposition across all African GBS locations is the continent’s extremely low labor costs. The monthly cost of a contact center agent in Africa can range from US$546 to as little as US$175 per month. A contact center manager can cost a maximum of US$2,200 to a minimum of US$406 per month.

Background to Research

These findings, along with numerous other insights, emerged from the report’s in-depth analysis which stems from the mixed methods research methodology.

To understand buy-side demand and investment priorities, the research team conducted 360 global interviews. This included over 140 interviews with global enterprise executives from organizations in Australia, Canada, Germany, France, the UK and the US that outsource, or plan to outsource, to Africa. These executives were asked to rank and rate each African country, including service level delivery across various key business process areas.

In addition, to plot the supply-side, profiling surveys were conducted on over 500 GBS service providers and delivery centers across 19 African countries. The 19 African country profiling surveys represented a mix of mature, emerging and nascent GBS locations in Africa that now serve as key locations for global and local investors and buyers.

Key Research Findings

The research findings highlight the macro- and micro-economic environments of each location and quantifies the size of Africa’s burgeoning GBS/BPO sectors. The report also provides key insights into each country’s regional GBS competitiveness, along with reviews of ICT/ITES capabilities and enabling infrastructure. The business and investment environments related to skills, services, strengths, weaknesses, threats and opportunities are also assessed and analyzed.

Moreover, market trends, sizes and salary reviews were corroborated and validated for each country, which the report shares alongside insights into future growth forecasts based on each county’s favorable environment and unique demographic profiles.

What to Look Out For

According to the research, five countries are currently positioned as maturing and emerging GBS/BPO locations: South Africa, Egypt, Nigeria, Rwanda and Botswana.

Despite ranking third in GDP ($351 billion), South Africa is the continent’s largest domestic and international GBS/BPO player by market share, which is valued at an estimated US$4.7 billion. The local sector employs over 261,082 workers. The country has a large English-speaking workforce with competencies across most outsourcing services, including digital services. Surveyed enterprise executives rated the country best in terms of contact center voice, back office processing and customer administration service delivery.

Egypt has the second largest GBS/BPO market share in Africa, valued at over US$4 billion (excluding IT services), which operates within Africa’s second-largest economy (GDP of $363 billion). The sector supports over 240,000 workers. The country offers a highly skilled, multilingual, diverse talent pool, with competitive labor costs and the second-largest youth population in Africa (36.3 million citizens aged between 18-35 years). The native Arabic language opens Egypt to the Arabic market of 300 million consumers. 

Compared to other African nations, Egypt boasts a sophisticated and developed ICT infrastructure. Unsurprisingly, enterprise executives surveyed in this research rated Egypt first for digital contact center and data management services, and second overall in terms of contact center voice, customer administration and back office processing service delivery.

Africa’s largest economy by GDP (US$448 billion), Nigeria, boasts a well-established ICT sector – the largest on the continent. This feature serves as an excellent foundation for developing the country’s GBS/BPO industry, which is already valued at an estimated US$286.8 million, employing 16,540 workers. Coupled with a focus on sector-specific skills and education, the country stands poised to take advantage of the largest population of English speakers in Africa and the highest number of youth on the continent aged between 18-35 years (53 million).

Further Detail: Emerging Regions

Rwanda is an emerging GBS/BPO market with a growing market share that is currently estimated to be US$131 million. The sector employs an estimated 6,980 GBS/BPO workers, within a country that has a large population of English and French speakers. Reliable and advanced communications infrastructure, with 95% LTE network coverage, will continue to support Rwanda’s growth as a GBS/BPO destination of choice for English and Francophone countries.

Botswana is another emerging GBS/BPO location, boasting an estimated market size of US$40.3 million and employing 2,600 workers. The country boasts macroeconomic stability and offers attractive investment incentives and a growing pool of educated, English-speaking workers.

Additional maturing and emerging African regions within the GBS/BPO space include Morocco, Tunisia, Kenya, Mauritius, Zimbabwe, Ghana and Senegal.

Morocco currently offers over 73,500 GBS/BPO workers who boast excellent French-language capabilities, coupled with a strong BPO services offering, regional technology and IT-enabling capabilities.

Tunisia, with over 86,000 GBS/BPO workers, a well-educated talent pool, excellent French native fluency, and great telecoms infrastructure is also maturing as a major player.

Kenya’s growing domestic BPO market is pivoting into the broader GBS market by leveraging its well-educated English-speaking talent pool, low labor costs, and renowned ICT infrastructure.

The island nation of Mauritius has created a burgeoning GBS/BPO market thanks in large part to excellent ICT and cyber facilities, a friendly regulatory environment, and globally competitive back office and data management services.

Other African nations to watch include Senegal, which is emerging as a strong French alternative market for BPO services; Ghana with its scalable pool of English-speaking and computer literate talent and growing youth population; and Zimbabwe, which has bold GBS/BPO development plans based on its highly educated talent pool for niche services.

To access additional research insights watch our industry webinar here. Enabling organizations, investors and buyers who wish to make informed decisions on outsourcing, co-sourcing or expanding into Africa are encouraged to purchase the extended version here, which provides deeper insights and a holistic situational analysis of each African GBS/BPO location.

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