As Nigeria struggles to promote alternative sources of income in the period of recession, the National Association of Information Technology Enabled Companies (NAITEOC), has urged the Federal Government to explore the potential of outsourcing in the country.
Chairman of NAITEOC, David Onu, at the weekend, said that outsourcing can absorb five million youths from the unemployment market and also earn the nation more than $5 billion in the next five years, if the right steps are taken.
Onu said outsourcing at present has created jobs for more than 10,000 people and contributed about one per cent to the national Gross Domestic Product, adding, “With the right policy and necessary infrastructure in place, outsourcing has the potential to create five million direct and indirect jobs in Nigeria in the next five years.”
The NAITEOC chairman identified the absence of legal framework, poor social and IT infrastructure and high tax regime as some of the challenges facing the development of outsourcing in the country.
He said although government was working hard to develop the sector, more efforts and collaboration from the private sector was needed for its development.
Onu stressed the need for government establishments and corporate organisations to embrace outsourcing. He noted that a vibrant outsourcing sector would not only help to create jobs, it would also promote economic development and accountability in government.
He said: “The BPO/KPO industry is an emerging sector that represents $1 billion yearly market opportunity for Nigeria with a clear potential to create a minimum five million direct and indirect jobs in Nigeria within the next five years, replicating what has been achieved in such countries as India, the Philippines and most recently Egypt.
“The organisation seeks to promote and position Nigeria as an alternative Business Process Outsourcing (BPO), and Knowledge Process Outsourcing (KPO), destination of choice to companies the world over seeking to outsource such back-end operations as contact centre operations, software development, data management services etc. to competitive alternative destinations around the world.”
He added, “In line with the Federal Government push to diversify the Nigerian economy, the BPO/KPO industry presents a unique opportunity to create a new economy, with the establishment of new businesses and the creation of ‘demand driven’ and ‘sustainable’ jobs. We estimate that this industry within five years can employ well over five million people in Nigeria directly and indirectly.
“To move this agenda forward, our association in partnership with the Office of the Vice President, Ministry of Communications, NITDA, the World Bank, Galaxy Backbone, DFID, NIPC, NEPC, (to mention a few key stakeholders) is organising an International Outsourcing Conference from December the 5th through the 7th . This seeks to showcase the potential of the Nigerian BPO/KPO industry to an international as well as domestic audience and further enable the socio-economic rejuvenation of Nigeria through the creation of new businesses and jobs for the teeming unemployed in the country.
“The association stakeholders’ companies in the Nigerian BPO/KPO space, today, collectively employ well over 5,000 people; as such, have clear understanding of where the jobs are and how they can be created.”
The BPO/BPM/KPO/ITES industry is a global $1.2 trillion industry and presently accounts for about 8.92 per cent of India’s GDP with revenues in excess of $100 billion.
The Nigerian domestic market is estimated at present to be over $1 billion based on domestic expenditure and it is projected to grow to over $5 billion in five years as the domestic market expands and the export of BPO/KPO services from Nigeria increases.
As Nigeria seeks diversification of the economy and alternative sources of revenue, the BPO/KPO sector presents a unique opportunity to achieve this. But to achieve this, considerable work has to be done in terms of policy, infrastructure 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, Onu said.
Most recently, ACS Services, a U.S. based managed services set up a 3,000 seat BPO facility in Ghana to provide data entry services to the US insurance market. The Egyptian BPO sector is estimated to be a $1 billion market, while the South African BPO sector is currently valued at a yearly value of $1.6 billion.