Positioning Nigeria as outsourcing hub
While a few factors could be said to be in Nigeria’s favour, many more are glaringly negative. This has limited the full exploitation of opportunities offered by outsourcing, which have helped many countries in Asia and other parts of the world to prosper.
Outsourcing is a germane opportunity for countries that may not be as technologically developed to be able to provide services for companies and businesses as those in more developed climes using the comparative advantage.
Not surprisingly, policymakers in both industrial and developing countries have been debating appropriate policy choices that can maximise the huge prospects that outsourcing holds for economic growth and development.
Statistics show that the global market size of outsourced services in 2018 was valued $85.6 billion. Revenue from global Information Technology Outsourcing industry in 2018 was $62 billion, while revenue from global Business Process Outsourcing (BPO) industry was $23.6 billion.
However, with increase in unemployment, outsourcing brings to any economy, the advancement in technology, the rise of automation has paved the way for developments like Robotic Processes Automation (RPA), and Artificial Intelligence (AI), which in the future could pose challenges to the continued growth of outsourcing.
This is just as it has been predicted that more than one million jobs are at risk in the USA, Poland, India, and Philippines, largely due to the threats of RPA and AI.
Also, recent conservative trade policies that the U.S. is adopting if allowed could snowball, and might set back the growth recorded so far in global outsourcing.
At the gathering of outsourcing professionals recently at the 2019 Outsourcing Expo, experts argued that based on certain factors such as financial attractiveness, skills, and availability, and business environment scores could vividly bring Nigeria on the front burner as the next outsourcing hub.
Currently, Nigeria is not on the list of 50 top global outsourced countries in Africa.
Globally, India, China, Malaysia, and Indonesia are among the countries leading the outsourcing business while in Africa, Egypt, Mauritius, Morocco, and Kenya top the list.
The keynote speaker, Mazi Sam Ohuabunwa, who spoke on ‘Nigeria: The Next Outsourcing Hub’, said with the global market worth about $85 billion, Nigeria can take advantage of it as she is financially active.
He noted that the rate of returns is still above average, which is why many investors are still willing to come to Nigeria despite the risks.
“Imagine when we de-risk our country; the kind of inflow of foreign direct investments (FDIs) that would come into the country would be huge. Nigeria should know how to promote investment with the fact that our economic problems would be largely resolved both for outsourcing and our economic development.
“The political environment is beseeched with so much instability. Our economic environment is beseeched with so much policy flip-flop while the social environment is beseeched with high level of unemployment with exclusive governance; people are left on the fences and are now repelled against the system, which has proliferated as insecurity around the country. These things distract and prevent Nigeria from being the preferred destination for investment.”
According to him, outsourcing from a domestic perspective can help to improve corporate efficiency in operations, breach the gap that leads to very low level entrepreneurship activity, as the money used for their development can be overwhelming for many companies.
He said government needs to do a lot of things to push for more human capital development, enthrone some sensible training policies that would make Nigeria a preferred destination, ensuring that law and order help to close the knowledge gap to create the funding opportunities for companies and businesses.
He added that the private sector has to become more ambitious and begin to do things that will it help do better than it is currently doing, and to have a voice to speak and advice government, and also protest when government is not doing the right thing.
On the business and legal structure in outsourcing, the Managing Partner, Hybrid Solicitors, Bimbo Atilola, disputed that outsourcing promotes casualisation and discourages career growth as argued by some labour leaders.
He said there is nothing wrong with outsourcing, but it can be regulated, noting that government needs to put in place policies that guarantee the benefits of workers.
Citing instances, he noted the International Labour Organisation (ILO), has not brandished outsourcing as an unfair labour practice.
“The increasing waves of industrialisation across the globe, and the need for organisations to remain focused on their core business, inter alia, contributed to the transition from the conventional bilateral to tripartite employment relationships.
“Any economy must not be hooked into one road of carrying out any economic activity; it becomes oppressing, which means those who cannot meet up should not do business. The issue in Nigeria is that there is no appropriate regulation, and when we have them sometime, they are implemented default, we don’t force regulation when we have them,” he said.
President, Association of Outsourcing Professionals of Nigeria (AOPN), Prof. Obiora Madu, said in tackling some of the sectoral challenges, the sector needs government to create enabling environment for businesses to thrive.
He said there are the need for disruptive technology, the big data as well as effective tax regime, infrastructural development, and the need to step up advocacy in order for Nigeria to be an attractive outsourcing destination.
He said the association would go into advocacy with a view to growing the unexploited domestic Business Processing Outsourcing (BPO) industry to attract external opportunities.
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