
Since its inception, Business Process Outsourcing (BPO) has
been heralded as the magic formula for addressing unemployment and driving
economic growth in the developing world, especially in Africa. Critics are for
the opposite and the arguments put forward in support include that it promotes
employment, encourages foreign direct investment and globalisation of local
economies. On the other hand, historical and current experiences of workers
across the African continent in BPO reflect a different discourse in which
workers are used, underpaid and with structures of oppression and inequality
reproduced.
Africa alone is deemed to have more than 1.4 billion people
and overall youth unemployment is now standard across the continent at around
12%, as reported by the ILO. Unfortunately for developing countries,
unemployment rates are much higher, particularly in South Africa, Nigeria and
Kenya where educated youths are without jobs over 30%. The beauty of BPO is
that it provides a market for this talent pool by outsourcing jobs from more affluent
countries. These roles are often typified by data entry, customer relations and
IT support roles – work that demands relatively skilled labor but can be
geographically easily relocated due to developments in telecommunications and
globalization.
Exploitation is another area of this system that has its
projection towards a dark side. BPO workers from African states are normally
paid lower wages than their counterparts from developed countries or the Global
North. For example, the call center agents in Nairobi are paid $2 per hour but
those in the United States are paid $50 for the same. This partly shows that
Africa is still on the periphery of the current globalization where it is just
a factory and market for cheap labor.
This problem is not incidental; this problem arises from the
world economic systems that support such inequalities. Africa’s participation
in Business Process Outsourcing (BPO) only confirms the ability to strip Africa
of its resources cheaply for gain in other regions. As this article shows, BPO
is not the answer to Africa’s economic problems and that Africa needs to
process and manufacture to empower its citizens.
Why BPO is Failing Africa
1. Wage Exploitation and the Global Value Chain
The main idea of BPO is to reduce expenditure. Organizations
in developed countries hire workers from areas such as Africa to minimise
expenses. Though this would mean creating job posts, the remuneration
associated with these products is sometimes appalling. For instance, an
outsourced tech support position in Nigeria could receive $2-$4/hour, and this
is far lower than the minimum wages earned in the US at $7.25/hour and more in
states that include California at $15/hour.
This wage differential cannot be explained by variation in
the cost of living alone. The work done is the same and Africans can contribute
equally or even better than the competition. The underpayment reflects a deeper
issue: a world economy system where Africa is systematically positioned as a
service provider of cheap labor regardless of the goods or services being provided merit.
2. Lack of Economic Spillover
Unlike industries such as manufacturing that can generate
wider economic gains through local infrastructure, development of technology
and training of human resources, BPO hardly has anything to leave behind. It is
a low capital-intensive industry with high turnover rates and it is usually
characterized by the orientation towards the realization of short-term
objectives excluding development objectives.
For instance, hundreds of employees may be engaged in a call
centre in Lagos; however, due to weak infrastructural investments or high-level
skills, the outcome is limited to meagre wages. Of the profits made, the
majority go back to the Global North countries — rather than enhancing the
recipients’ capability for independent production.
3. Undermining Africa’s Potential for Value Addition
Any map that outlines the distribution of mineral endowment
across the globe depicts Africa as a ‘highly endowed ‘entity. This has however
persisted to see the continent in the middle of a vicious cycle of exporting
raw unprocessed products at low prices and importing processed products at very
high costs. This focus on BPO diverts attention from redressing this basic
imbalance.
For African nations to turn around their economic growth
potential, it is advised that they should concentrate on more local processing
and manufacturing to be derived from industries such as agriculture, mining and
technology among others. For example:
- Cocoa processing: Even as Africa generates more than 70 per
cent of global cocoa, it contributes only about 4 per cent to chocolate
production. When cocoa is processed locally this will produce employment
opportunities, retain value within the continent and allow African brands to
compete globally.
- Mineral beneficiation: Something to note is that Africa
holds a conducive variety of resources that are fundamental to EVs and
renewable markets, such as cobalt and lithium. The processing of these minerals
within the continent would help its shifts up the value addition chain and
therefore bargain from a vantage point.
4. The Global North’s Reluctance to See Africa Prosper
Historical and present realisations of the global economy
seem to show that the powers of the Global North have been keen to prevent
structural transformations which could afford Africa a level playing field.
Holding a supply chain dynamic that preserves cheap labor in Africa, and
thereby makes the African economies remain vulnerable these nations entrench
their economic supremacy.
Within BPO there isn’t much motivation for firms to offer
reasonable wages or undertake worthy development. It is not a question of
philanthropy but business and African welfare are not important here.
The Path Forward: Prioritizing Local Industries
The only way for these African states to free themselves
from this exploitative relationship is to develop their ers processing and manufacturing
industries. Here’s how:
1. Invest in Infrastructure and Technology: Politicians and
private investors should always consider infrastructure projects that stimulate
production to be undertaken. These investments are from power generation to transport
networks necessary for manufacturing sector buoyancy.
2. Policy and Regulation for Economic Leverage: Governments
of African countries should encourage local industries rather than encourage
outsourcing in other countries. For example, giving a tax credit to enterprises
that engage in local processing facilities or levying payable on raw materials
that are exported encourages value addition.
3. Regional Collaboration for Scale: Africa’s broken down
economy has to mutually cooperate through such structures as the African Continental Free Trade Area (AfCFTA). It means the creation of a single market
allows African countries to bring their funds as well as a set of common rules,
encouraging large-scale investments in processing and manufacturing industries.
4. Education and Skills Development: Though BPO services may
imbibe new skills, setting up a manufacturing industry needs fresh technical know-how. The governments of Africa need to link up with educational facilities
so that the populations within these nations can be empowered with knowledge in
engineering, technology, and entrepreneurship.
Conclusion
The hope that BPO holds for Africa as an economic panacea is
simply an illusion – a veneer of over-exploitation instead of providing genuine
solutions for jobless economies and third-world countries. As essential and
crucial as the BPO might be, it suffices to indicate that the entire sector
prolongs the African continent’s role of providing cheap labor, consequently
keeping Africa helpless and powerless politically.
Africa does not need to continue being part of the global
economy as a mere benefactor but has to reinvent itself. Through local
processing of commodities, manufacturing, and value addition, African countries
will not only graduate from supplying only raw materials and cheap labor but
they will become economic giants in the world.
This change will not be overnight and will call for an
integrated effort, innovative and charismatic leadership, and an
entrepreneurial mindset. But the objective—an economically developed and
independently functioning African region, an interaction with the rest of the
world on equal terms – is worth it. We should not accept the little we are
seeing in life when the fullness of life is achievable.