Outsourcing in Africa
By: Leah Ngari
In an increasingly competitive global economy, outsourcing technology development or business processing remains a powerful tool for companies looking to simplify their organizational structure, improve customer service quality, or develop products faster and more cost-effectively. Outsourcing today is no longer limited to call centers. Companies today outsource their IT, finance, and HR functions to cut costs and focus on their core business functions.
Traditionally, the go-to outsourcing destinations have been Asia, Latin America, and the Middle East. Now, the growing economy and aging population in these regions is making labor in these regions more expensive and, therefore, less attractive to companies looking for remote, cost-effective staff. Africa, with its large population of educated unemployed and underemployed individuals, is emerging as the next top destination for offshore staff sourcing.
Why companies should consider Africa as their outsourcing destination
Africa is the world’s youngest continent with a median age of about 18 years. A large share of Africa’s population will join the workforce in the next couple of years and face an increasingly competitive labor market. Already today, almost half of Africa’s university graduates struggle to find jobs that utilize their education. The large population of young, working-age people, coupled with the increasing lack of employment within the continent, creates a pool of potential employees for companies looking to outsource. The availability of labor, coupled with the region’s competitive rates, makes Africa an ideal destination that can supply human capital to companies that need it.
Multiple languages are spoken throughout Africa. English is a common first language in countries like Ghana, Nigeria, South Africa, Botswana, whereas Senegalese, Moroccans, Malagasy and others speak French. Mozambique has a large population of Portuguese speakers. As a result, many Africans can communicate easily at a native level with customers and clients worldwide.
The growing infrastructure in the region also makes it a great offshore outsourcing destination. Many countries like Madagascar enjoy fast speed internet. Fast-growing telecom networks and increased access to technology is creating an enabling environment for digital and remote work.
Africa and Europe lie along similar latitudes, and so African countries and European countries often share overlapping or similar time zones. For instance, South Africa and the UK have a time difference of 2 hours, as do Senegal and France. And where there is a more significant difference between client and outsourcing companies, the increasing adoption of flexible work hours eases these concerns.
Benefits for Africans
Outsourcing to Africa is more than good business; it is also good for Africa. Sub-Saharan Africa has the fastest urbanization rate globally, but job openings are not keeping up. Youth unemployment and underemployment are a growing challenge. International companies that turn to Africa for their staffing needs will create jobs on the continent that can give Africans a chance to learn or perfect a marketable skill while earning a living and feeding their families. Local outsourcing companies that connect clients with qualified professionals contribute to economic growth and private sector expansion on the continent.
One major worry when it comes to outsourcing is that the jobs created are only temporary. Thanks to technological advances, the type of jobs that are outsourced today might be carried out by AI machines and other digital innovations in the future. But this does not mean that the continent and its people cannot benefit from outsourcing even after the outsourced jobs dry up. The right macroeconomic and social policies can turn the increased employment and economic activity into sustainable, long-term growth.
There is also always the possibility of companies shifting their business models and letting go of employees that rely on their outsourcing services. Andela, a software development company established with the vision of training young Africans to fill junior development positions, let go of hundreds of developers when the proliferation of programming boot camps in Western countries flooded with the market with local entry-level engineers. More recently, the company closed its brick and mortar offices and transitioned to remote working arrangements, making it difficult for some of its African engineers with poor home internet connections to compete with their counterparts elsewhere.
But the Andela story also offers hope, since much of the laid off tech talent was able to use their skill-sets and experience of working with multinational companies to find new jobs in local tech companies. This, in turn, will benefit the African tech ecosystem.
Companies looking to source staff in Africa in a cost-effective yet socially responsible way can turn to “impact sourcing.” Impact sourcing involves companies recruiting individuals from lower-income communities and emerging markets and intentionally providing them with sustainable jobs and professional training that can ultimately lead to a lifetime of full employment. By engaging in impact sourcing in Africa, companies can find dedicated, reliable, and cost-effective labor while positively impacting some of the world’s most impoverished areas.
Services Outsourced to Africa
Many services can be outsourced to Africa, including website and app development, content creation and writing services, transcription, IT support, SEO optimization, data entry and database management, call center services, and data labeling. These services can be acquired using outsourcing companies within the continent and through freelance networks that connect freelancers with potential clients.
Technology-related services provided on the continent range from expert product design and management to the simple tasks such as data labeling. Africa’s is the word’s fastest-growing continent for software development, and major tech giants such as Microsoft and Google offer programming courses and mentorship programs that will further expand the tech talent pool in Africa.
Tech jobs on the continent are not reserved only for those with advanced programming skills. AI algorithms still rely on human judgment for a large variety of purposes, such as data-labeling and training self-driving cars. As IT infrastructure continues to improve across the continent, Africa is becoming an ideal destination for AI-supporting services that require human perception.
Prominent African IT support and development companies
Several African companies offering IT and software development services on the continent have expanded beyond their country of origin and opened additional branches throughout the continent. As these companies train and employ an increasing number of Africans, tech talent improves on the continent, boosting Africa’s private sector and its interconnectedness with the global economy.
Below are five pan-African software sourcing companies to keep in mind next time your team is looking for experienced engineers or entry-level programmers:
- Code of Africa is a company that trains software developers in Rwanda and Kenya and connects them to the European market, specifically targeting Germany, Australia, and Switzerland.
- Techno Brain Group provides professional and academic training in IT to Africans through its training branch based in Kenya. It also offers consultancy and outsourcing services to governments, NGOs, and private organizations across the globe.
- Tunga works to source employment for skilled Africans with limited access to job opportunities in the field of software development. It targets individuals from impoverished backgrounds to help them get jobs in the IT sector. It currently works with African developers from Uganda, Nigeria, and Egypt.
- Andela trains software engineers and assigns them to different leading tech companies worldwide; their client list includes Coursera and Github, and their engineers come from Nigeria, Egypt, Uganda, Kenya, Rwanda, and more. Originally, the company trained its own junior software engineers. However, it has recently transitioned to hiring more senior engineers due to the increased number of junior developers in its target market, the USA. While it currently only operates a brick-and-mortar training program in Kigali, Rwanda, Andela has partnered with Facebook to offer remote technical training that will give individuals all over the world the opportunity to gain marketable skills.
- Software Group offers digital banking and integration solutions for financial service providers. It serves clients from diverse locations, including Ghana, India, the United States, and Australia.
In the midst of the COVID-19 pandemic that has seen outsourcing investments reduce drastically, numerous companies have been forced to slow down their operations. Cutting costs has become necessary for survival, and businesses need to go back to the drawing board and restrategize. While the popular outsource markets for IT and software-related needs in countries like Vietnam and Ukraine continues to operate, Africa is slowly emerging as a strong contender in the IT sector.
Many tech hubs are popping up across the continent from Ethiopia’s silicon valley of Sheba Valley to Kenya’s Silicon Savannah. By outsourcing tech development to Africa, you can create more employment on the continent while benefiting from the readily available skilled labor offered.