The Rise of Call Centers and Business Process Outsourcing in Africa

The call center industry in Africa is experiencing a remarkable boom with the growth of the business process outsourcing (BPO) sector. With its unique blend of a young, multilingual workforce, improving technological infrastructure, and supportive governmental policies, Africa continues to be an attractive destination for international investments. As an update to our recent blogs on Africa, Site Selection Group wanted to provide additional insight into the factors driving this growth, discuss the challenges in the region and highlight some of the recent projects that underline the continent's rising prominence in the global call center landscape.

Factors driving growth

Several key elements have contributed to the rapid expansion of Africa's BPO and call center sector:

• Young, Educated Workforce: Africa is home to the world’s youngest population, with a median age of around 19. This demographic is tech-savvy and increasingly proficient in English, French and Portuguese, making the continent ideal for multilingual call centers.
  
  
• Cost Effectiveness: Operating costs in African countries are often lower than in traditional BPO hubs like India and the Philippines, offering significant cost savings on labor and infrastructure for international firms.
  
  
• Government Support: Many African governments are actively promoting the BPO sector through economic incentives such as tax breaks, investment in ICT infrastructure and tailored training programs to enhance skills relevant to the industry.

Challenges with Africa

Setting up a call center in Africa presents several unique challenges. While the continent offers many advantages, such as a large, young, and increasingly tech-savant workforce, there are hurdles that companies must navigate to establish successful operations. Here are some of the key challenges:

• Infrastructure Limitations: The continent’s inconsistent power supply and underdeveloped telecommunications infrastructure can hinder operations, especially in more remote or underdeveloped areas. Ensuring stable internet connectivity and electricity can involve a significant initial investment and ongoing maintenance.

• Political and Economic Stability: Some African countries face political instability, fluctuating economic conditions and regulatory uncertainties. These factors can affect business operations and make long-term planning difficult. Compliance with local laws and regulations requires thorough research and possibly local legal counsel.

• Quality of Education and Skill Gaps: While there is a large available workforce, the education systems in some countries may not always meet international standards, resulting in a skills gap. Companies might need to invest heavily in training and development to bring employees up to the proficiency level required for complex customer service or technical support roles.

• Cultural and Language Barriers: While Africa is home to a multitude of languages and cultures, aligning these with the needs of global clients can be challenging. Training in language skills and cultural nuances relevant to the target market is crucial.

• Competition for Qualified Staff: In regions with established BPO industries, such as South Africa, Morocco and Egypt, competition for highly skilled workers can be intense. Attracting and retaining top talent often requires offering competitive wages and benefits.

• Data Security and Privacy Concerns: Adhering to international data security and privacy standards such as GDPR can be complex. Local legislation might not fully align with these standards, necessitating additional measures to protect client data.

• Logistics and Time Zone Differences: While being in a favorable time zone for serving Europe is advantageous, challenges may arise when catering to clients in the Americas or Asia. Additionally, logistical issues can complicate setup and operations, especially in less accessible regions.

• Scalability Issues: As operations grow, scaling infrastructure, workforce and management practices to meet increased demand while maintaining service quality can be difficult, especially without robust local management and support structures experienced in the call center industry.

• Call Center Facility Build-Out Costs: Most landlords in Africa do not fund the construction cost to build out a call center facility. As a result, call center users need to anticipate spending around $5,000 to $10,000 per production workstation to get a fully functional call center set up.

Navigating these challenges effectively requires careful planning, local partnerships and a flexible approach to adapt to rapidly changing circumstances. Companies that successfully manage these hurdles can tap into the growing potential of Africa's call center sector.

Highlighting recent projects in the region

The following recent projects in the BPO industry across Africa underscore the region's growing appeal:

• CCI Global in Tatu City, Kenya: CCI Global announced the opening of Kenya's largest call center in Tatu City. The new five-story building inside Tatu City in a 5,000-acre Special Economic Zone in Nairobi represented a $50 million investment into the Kenyan BPO industry. 

• VXI Global Solutions in Cairo, Egypt: VXI Global Solutions officially opened its Cario call center in May with approximately 500 workstations.

• Teleperformance in Gqeberha, South Africa: Teleperformance announced the planned creation of 500 new positions in the emerging city of Gqeberha in South Africa in one of the first large announcements outside South Africa’s primary cities. 

• Foundever in Cape Town: Foundever has committed to hiring approximately 3,000 employees by 2026 to support its first South Africa contact center in Cape Town. Foundever already employs 800 in the center, which opened in June 2023

• TTEC in Cape Town: TTEC announced a new global customer experience delivery center opening in Cape Town.

• Amplify5 in Cape Town: The company currently employs about 650 people across its two Cape Town offices and is building a property portfolio to expand its office space to 4,000 seats with potential hubs across the metro.

• Wipro in Cape Town:  Wipro announced the inauguration of its new office at Sable Park, Century City, in Cape Town with approximately 450 employees.

• Sigma in Western Cape: Sigma announced it is filling 600 new contact center agent vacancies at its Diep River and Retreat offices. The new hires will be in addition to Sigma’s existing 2,100-employee workforce in the Western Cape, which expanded by 800 just last year.

Conclusion

Africa’s burgeoning call center sector represents a significant development in the continent's economic landscape, offering promising career opportunities for its young population and positioning Africa as a formidable player in the global call center market. With continued investment and favorable demographics, the future looks bright for Africa's role in the international BPO industry.