Tech companies will move outsourcing to Africa

Africa is becoming a new hub for outsourcing business processes (BPO), challenging industry leaders like India and the Philippines. This is reported by The Economist.

Low labor costs, a young English-speaking workforce, and government support attract international companies to the region. This could address the unemployment problem on the continent, where three out of four young people are not employed.

The key factor is the difference in salaries. In Kenya, an employee of a BPO company earns an average of $233 per month, while in the Philippines it is $284. The cost of doing business in African countries is 60-70% lower than in the US or Europe. The governments of Kenya, Nigeria, and South Africa additionally stimulate the sector with tax incentives and subsidies.

According to forecasts, the BPO industry in Africa is expected to grow by 14% per year, nearly double the global rate. In Kenya, a growth of 19% is anticipated. For example, CCI Global has already opened a new call center in the country with 5,000 job positions.

Risks and Threats of Automation

However, growth has its downside. Employees complain about poor working conditions, especially content moderators.

In Kenya, former moderators have sued Meta and its contractor Sama. After that, Meta relocated some operations to Ghana, highlighting another issue — companies can easily change jurisdictions when difficulties arise.

The main threat to the industry remains artificial intelligence. According to Genesis Analytics, more than 40% of current tasks in the African BPO sector are at high risk of automation.

Simple operations like image labeling are becoming a thing of the past. They are being replaced by more complex tasks: checking AI-generated texts or processing requests that require empathy.

In the long term, Africa's success in the outsourcing market depends on its ability to perform more complex and higher-paying work. For this, countries need to invest in education and train specialists in computer science and artificial intelligence.

Let us remind you that in February, Altvest became the first African company with Bitcoin in its treasury.

In Africa, blockchain is already being used to solve real problems.