Should You Outsource to Africa?

by Alex Daruty | Feb 11, 2021 | HR

In an increasingly competitive global economy, outsourcing technology development or business processing remains a powerful tool for companies looking to simplify their Organisational structure, improve customer service quality, or develop products faster and more cost-effectively. Outsourcing today is no longer limited to call centres. 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 labour 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 choose the African continent as an 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 labour market. Already today, almost half of Africa’s university graduates struggle to find jobs that utilise their education.

Competitive Labour Market

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 labour, coupled with the region’s competitive rates, makes Africa an ideal destination that can supply human capital to companies that need it.

Multiple Languages

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.

Fast-growing Infrastructure

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.

Flexible Timezones

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.

How outsourcing helps the African population

Outsourcing to Africa is more than good business; it is also good for Africa. Sub-Saharan Africa has the fastest urbanisation 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.