Poised for Growth: Nigeria’s Burgeoning BPO and Customer Experience Industry

Poised for Growth: Nigeria’s Burgeoning BPO and Customer Experience Industry

Nigeria is quickly emerging as an  ideal location for the delivery of business process, customer experience and contact centre outsourced services to the global and domestic markets. Noted for being Africa’s largest economy, the country has a heavy reliance on natural resources, especially the export of oil. Therefore, there is a need to diversify the economy and capitalise on opportunities in the business process outsourcing (BPO) and customer experience (CX) industry.

Nigeria’s BPO/CX Market

Although relatively small compared to its African counterparts, Nigeria’s BPO/CX market is already diverse and is estimated to be valued at USD280 million with about 16,540 agents and knowledge process workers servicing the domestic and international markets.

Nigeria BPO/CX Sector Split:

Source: Genesys Contact Centre Blended AI Survey (2020)

The size of the BPO/CX businesses are relatively small, most of which employ 51 to 100 call/contact centre agents, indicating the developing stages of Nigeria’s outsourcing and offshoring market. However, there are larger service providers with 800 to 1000 frontline, specialist and back-office agents, such as Outsource Global, who is servicing markets such as Japan, the United States and the United Kingdom.

Average Number of Call/Contact Agent Seats per Business:

Source: Genesys Contact Centre Blended AI Survey (2020)

Core Value Propositions:

Nigeria’s BPO/CX value proposition is diverse and includes:

  • Low labour costs;
  • Strategically geographically located for the sub-Saharan market and in a favourable time zone (GMT +1);
  • English-speaking country;
  • Strong ICT sector;
  • Young and educated workforce; and
  • Specialised BPO institutions that offer specialized training.

ICT as the Enabler of Outsourcing/Offshoring

Nigeria has the largest Information and Communications Technology (ICT) sector in Africa, which lays an excellent foundation for developing a high-quality outsourcing and offshoring industry. The country has one of the highest rates of internet penetration in Africa (50.2%) totalling 91.5 million users.

Though ICT services can be unpredictable, the recent installation of undersea cables has boosted the country’s bandwidth capacity. Therefore, there is sufficient internet capacity to cater for growth in the BPO/CX industry, which will prevent bandwidth limitations and guarantees connectivity with global clients.

Nigeria ICT Market Statistics:

Source: All Africa Global Business Services (GBS) Benchmarking Survey (2019)

The Nigerian government is looking to use its established ICT sector to create partnerships with both local and foreign investors to diversify its economy. This approach will be a key enabler of developing the growing outsourcing industry. The Nigerian government has already made headway with this through the creation of public and private incubation hubs, youth innovation programmes and science technology parks.

This enabling environment has fostered a burgeoning and diverse BPO/CX industry that includes agents and knowledge workers providing the following services:

  • Back office processing;
  • Customer experience/contact centre services;
  • Data management;
  • Desktop support;
  • Human resource management;
  • Legal services;
  • Software development; and
  • Technical services and helpdesk support.

Available Skills and Capabilities

Although markets such as India, Malaysia and the Philippines are leaders in the outsourcing/offshoring industry, their labour costs are increasing. Nigeria’s low-wages and labour costs position it favourably to deliver BPO/CX services.

Average Contact Centre Salaries:

Source: All Africa Global Business Services (GBS) Benchmarking Survey (2019)

Average ICT Salaries:

Source: All Africa Global Business Services (GBS) Benchmarking Survey (2019)

Multilingual Capabilities and Scalability

Nigeria’s official language is English which has been the case since it gained independence from Britain in 1960. English is the language of business and education, as well as for all official purposes. As a result, Nigeria is well-positioned to provide BPO/CX services to the North American, the United Kingdom and Australian markets. 

Nigeria’s workforce includes a scalable population of youth workers aged between 15 to 35 and estimated to be 70 million. These youth citizens are also highly qualified. Nigeria has 308-degree awarding institutions that produce 600 000 graduates per annum, according to research house Knowledge Executive. There is also a specialized programme for capacity building for youths in BPO services through the National Information Technology Development Agency (NITDA).

AI and Nigeria’s BPO/CX Industry

Although Nigeria’s BPO/CX industry is still in its infancy, artificial intelligence (AI) considerations are already on the mind of industry operators. The graph below shows how AI and automation are impacting contact centre operations in Nigeria. Most BPO/CX operations in Nigeria will be deploying AI in the next 12 months. Those that already have, indicated that AI is enhancing their services. This reveals the modernity of Nigeria’s BPO/CX market and how businesses are already looking to ‘future-proof’ their operations.

How AI is Impacting Nigerian Call/Contact Sector Operations:

Source: Genesys Contact Centre Blended AI Survey (2020)

The graph below shows which processes Nigerian BPO/CX companies will automate in the next 12 months:

Source: Genesys Contact Centre Blended AI Survey (2020)

Nigeria is on the cusp of an outsource export revolution, as it has elements of a developed BPO and CX market. Low labour costs, sector diversity, strong ICT infrastructure, automation transformation and multilingual capabilities places Nigeria in a strong position to become a global BPO and CX hotspot. This is impressive given the early stages of growth that the country is still going through, setting a bright future in Nigeria’s efforts to diversify its economy and create employment for its people.

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