Outsourcing as Catalyst for Economic Growth

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Emma Okonji writes that Nigeria stands to benefit from the global business outsourcing process initiative, should government provide the enabling infrastructure and policies

As Nigeria seeks diversification of her economy through alternative sources of revenue generation, the Business Process Outsourcing (BPO) and the Knowledge Process Outsourcing (KPO) sector presents a unique opportunity to achieve it and move the country away from the current economic recession.

But to attain this feat, experts are of the view that considerable work has to be done in terms of policy, infrastructure framework, and legislation to effectively position Nigeria in the global outsourcing world. Presently countries like Ghana and Egypt have made significant infrastructure as well as policy investments that have greatly boosted the growth of this sector in their respective countries.

Most recently, ACS services, a United States (US)-based managed services set up a BPO facility in Ghana to provide data entry services to the US insurance market. The Egyptian BPO sector is estimated to be $1 billion market while the South African BPO sector is currently valued at an annual $1.6 billion.

There is need therefore, for increased government commitment in Nigeria to ensure that the country can be competitive in the international BPO/KPO market. To achieve this, there is a great need to have a harmonised and structured approach in determining what needs to be done to promote the BPO industry and achieve the clear socio-economic opportunities it represents.

BPO initiative in Nigeria
In order to encourage and promote BPO in the country, the Nigeria Association of Information Technology Enabled Outsourcing Companies (NAITEOC), a non-governmental organisation, was conceived and initiated by the Federal Ministry of Communications under the sponsorship and guidance of the National Information Technology Development Agency (NITDA) for the growth and development of BPO/KPO industry in Nigeria.

According to the Chairman of NAITEOC, Mr. David Onu, the BPO/KPO industry is an emerging sector that represents $1 billion annual market opportunity for Nigeria with a clear potential to create a minimum of two million direct and indirect jobs in Nigeria within the next three years, replicating what has been achieved in such countries as India, the Philippines and most recently Egypt.

He said the organisation seeks to promote and position Nigeria as an alternative BPO and KPO destination of choice to companies of the world over, seeking to outsource such back-end operations as contact center operations, software development, data management services, among others, to competitive alternative destinations around the world.

Boosting BPO initiative
In order to further encourage BPO/KPO initiative in Nigeria, NAITEOC, which has been promoting the initiative in Nigeria since its inception, is currently organising an International Outsourcing Conference, scheduled to hold between December 5 and 7, 2016 in Abuja with the theme: “Outsourcing-A catalyst for Change, Economic Growth, Job and Wealth Creation.”

To move the agenda forward, the association is partnering the Office of the Vice President, Ministry of Communications, NITDA, The World Bank, Galaxy Backbone, among other stakeholders in organisng the outsourcing conference, which seeks to showcase the potentials of the Nigerian BPO/KPO industry to an international as well as domestic audience.

According to Onu, the conference would further enable the socio-economic rejuvenation of Nigeria through the creation of new businesses and ‘demand-driven’ and ‘sustainable’ jobs for the teeming unemployed in the country.
The conference is a three-day event and will include key components like Investment Forum, Job Fair, and Education/Training.

Experts view
Giving the importance of BPO to the Nigerian economy, experts are of the view that government needs to do more to improve Nigeria’s global competitiveness by building a harmonised business environment. It is imperative that this is extended to the Nigerian KPO/BPO environment where key stake holders in both the public as well as private sector can be aligned in achieving development, the experts said. They listed areas of possible alignment to include: available, affordable and reliable internet broadband and telephony services; access to affordable capital, which include debt and equity; legal framework that will protect data protection/privacy laws as well as other laws; infrastructure development like technology park and industrial clusters; regulatory policies among other areas.

“There is a need for stakeholders both in the public and private sector to take bold initiatives that are collectively geared towards the growth of our industry. There is also need for such institutions as the Ministry of National Planning, Ministry of Power, Ministry of Trade and Investment, Ministry of Finance, Bank of Industry, Central Bank of Nigeria, The sovereign wealth fund, among other institutions, to play deeper roles in the growth of the BPO/ICT space,” the BPO experts said.

ICT Outsourcing Services

The National Information Technology Development Agency (NITDA) held Nigeria’s first national outsourcing conference in August 2011. The event marked a major push by Nigeria to carve out space in the business BPO sector. The rationale behind this is clear. BPO firms are major employers in markets like India and the Philippines – a key consideration in Nigeria, where unemployment is on the increase.

While BPO in Africa as a whole is more limited, countries like Morocco, Egypt and Ghana are working to gain a larger share of the global market.
Onu, who is also the President/CEO of Interra Networks Limited, a BPO company, said with government support, BPO could become a key source of new jobs for young Nigerians in particular.