Africa is becoming a new centre for business process outsourcing (BPO), challenging industry leaders such as India and the Philippines, according to The Economist.
Low labour costs, a young English-speaking workforce, and government support are attracting international companies to the region. This could address the unemployment issue on the continent, where three out of four young people are jobless.
A key factor is the wage difference. In Kenya, a BPO company employee earns an average of $233 per month, compared to $284 in the Philippines. Business operation costs in African countries are 60-70% lower than in the US or Europe. The governments of Kenya, Nigeria, and South Africa further incentivise the sector with tax breaks and subsidies.
Projections suggest that the BPO industry in Africa will grow by 14% annually, nearly double the global rate. In Kenya, a 19% growth is expected. For instance, CCI Global has already opened a new call centre in the country, creating 5,000 jobs.
Risks and the Threat of Automation
However, growth comes with its downsides. Employees, particularly content moderators, complain about poor working conditions.
In Kenya, former moderators have sued Meta and its contractor Sama. Following this, Meta moved part of its 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, over 40% of current tasks in the African BPO sector are at high risk of automation.
Simple operations like image tagging are becoming obsolete. They are being replaced by more complex tasks: verifying AI-generated texts or handling 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. To achieve this, countries need to invest in education and train specialists in computer science and artificial intelligence.
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