Africa: Call Center Industry Growth & Importance of Site Selection

The call center industry in Africa is experiencing significant growth, positioning the continent as a burgeoning hub for business process outsourcing (BPO). This expansion is driven by a combination of economic factors, a youthful and multilingual workforce, and proactive governmental policies. As companies consider establishing operations in Africa, strategic site selection emerges as a critical factor for success.

Africa's emerging call center landscape

Site Selection Group estimates that Africa's BPO sector currently employs approximately 750,000 to 1.2 million workers across the continent handling various types of outsourcing work for companies in Africa, Europe, Australia, and the United States. Some projections indicate that the continent's BPO workforce could more than double by 2030. This growth is largely attributed to global companies seeking cost-effective offshore alternatives to the Philippines and India.

Key African markets to consider

Navigating the region can be challenging, especially with the industry being relatively new in many of the countries.  Below is a summary of some of the key African countries:

• South Africa: As the most mature market in Sub-Saharan Africa for BPO services, South Africa boasts a workforce of over 300,000 call center employees at 1,200+ call center operations. The country has successfully expanded the depth of service offerings and attracted some of the largest BPO providers in the world.
  
  
• Egypt: With a well-established BPO industry of approximately 100,000 call center workers, Egypt is equipped to perform various aspects of outsourcing services. The country's strategic location and multilingual talent pool make it an attractive destination for call center operations.
  
  
• Kenya: Kenya has been very active in the last couple of years. The call center industry is poised for expansive growth, with over 40 call centers employing 50,000 workers. The majority of call centers are located in Nairobi, leveraging a young, educated, and English-speaking workforce.
  
  
• Morocco: Hosting a growing number of call centers, Morocco offers services primarily in French and Spanish, catering to European markets. The market is estimated to have 120,000 call center industry workers.
  
  
• Ghana: Companies like Concentrix, Majorel, and Webhelp operate in Ghana. The country hosts both captive and BPO call center operations supporting African, North American, and European customers. 
  
  
• Ethiopia: Ethiopia offers low labor costs, growing English proficiency, and an increasing reputation as a BPO hub; however, potential challenges such as infrastructure limitations and a developing business environment should be considered.
  
  
• Tunisia: Tunisia has a long history in the call center market, primarily supporting the European market due to its low labor costs. Tunisian agents are known for their fluency in multiple languages, particularly French, English, and Arabic, allowing them to serve a diverse customer base. 
  
  
• Nigeria: Nigeria is another emerging country that is in the early stages of call center industry growth, with an estimated 15,000 to 20,000 BPO industry workers employed. 
  
  
• Rwanda: Rwanda is an emerging country that is in the early stages of call center industry growth. An estimated 15+ companies are providing a range of outsourced BPO and ITO services to global clients and plan to create 5,000+ seats by 2025.

Challenges of operating in Africa

Despite its advantages, Africa's call center industry faces several challenges that businesses must navigate:

• Safety and Security: Crime rates in major cities such as Johannesburg, Nairobi, and Cairo present concerns for businesses and employees. Companies often invest in enhanced security measures for their premises and workforce to mitigate risks.
  
  
• Data Security and Compliance: While Africa has strong data protection regulations, including South Africa’s Protection of Personal Information Act (POPIA), ensuring compliance with international data security standards (such as GDPR for European clients) remains a priority for outsourcing firms.
  
  
• Geographic Distance and Accessibility: Africa is significantly farther from North America compared to nearshore hubs. While this distance does not impact digital communications, in-person visits, and business travel may be more complex and costly.
  
  
• Time Zone Differences: Africa’s time zones vary, aligning well with Europe but being less favorable for U.S.-based clients. Companies must structure shifts carefully to ensure sufficient coverage for North American customers.

Africa's value proposition

Despite these challenges, Africa remains a highly competitive destination for call center outsourcing, offering several key advantages:

• Cost Efficiency: Wages for English-speaking agents range from $1.50 to $3.50 per hour, comparable to rates in India and the Philippines but significantly lower than wages in the U.S., where call center employees often earn $18 to $25 per hour. This provides substantial cost savings for businesses outsourcing to Africa.
  
  
• High-Quality English Proficiency: Africa has a strong base of fluent English speakers with neutral accents, making its workforce particularly attractive for customer service operations targeting the U.S., U.K., and Australia.
  
  
• Government Support and Investment: Several African governments actively promote the BPO sector through tax incentives, training programs, and infrastructure investment to attract foreign companies.
  
  
• Cultural Affinity with Western Markets: African workers are familiar with Western business practices, customer service expectations, and cultural nuances, making them highly adaptable to international clients.

The importance of strategic site selection

Choosing the right location for call center operations in Africa involves careful consideration of several factors:

• Workforce Availability and Skills: Understanding the local labor market, including language proficiency, educational attainment, and technical skills, ensures access to a talent pool that aligns with business needs.
  
  
• Infrastructure: Assessing the availability and reliability of telecommunications and power infrastructure is essential. While urban centers like Johannesburg, Nairobi, and Cairo offer robust facilities, some regions may require additional investments to meet operational standards.
  
  
• Economic and Political Stability: Evaluating the stability of the political environment and economic policies helps mitigate risks associated with regulatory changes and potential disruptions.
  
  
• Real Estate Conditions: Real estate availability and cost vary by country. Most companies typically locate within traditional low to mid-rise office buildings; however, there have been some IT business parks developed in the region to support the call center industry. In most real estate options, the tenant will fund all of the improvements to the facility, which can be very costly. 
  
  
• Government Incentives: Many African governments offer incentives such as tax breaks, investment in ICT infrastructure, and training programs to attract foreign investment in the BPO sector. Engaging with local authorities can uncover opportunities for support and collaboration.
  
  
• Cultural Compatibility: Considering cultural factors, including work ethics, communication styles, and time zone alignment, can enhance service delivery and client satisfaction.

Conclusion

The rapid growth of Africa's call center industry presents a compelling opportunity for businesses seeking to expand their global operations. While Africa offers a highly skilled and cost-effective workforce, companies must also consider challenges related to security, data protection, and accessibility. Strategic site selection, informed by a thorough analysis of local conditions and resources, is paramount to establishing successful and sustainable operations. By carefully evaluating factors such as infrastructure, workforce capabilities, and governmental support, companies can position themselves to thrive in Africa's dynamic BPO landscape.