Nigeria loses $1bn annually to BPO services
The Nigeria Association of Information Technology Enabled Outsourcing Companies (NAITEOC) has said that Nigeria loses about $1 billion to Business Processing Outsourcing (BPO) services by both foreign and local companies annually.
Business Process Outsourcing (BPO) is the type of outsourcing where organisations contract out the non-core processes of their business to other organizations, leaving them to concentrate on their core mandate to remain in business.
Mr. David Onu, chairman of NAITEOC disclosed this at the Nigeria International Outsourcing Conference held in Abuja, adding that of the amount spent annually by public and private sectors, less than 2 percent go to local IT market, which is mostly support service.
Onu cited Indian example as best model in the world for BPO adoption and urged Nigeria to adopt BPO as a game changer capable of reversing the present economic down turn with a huge contribution and major turnaround in the economy.
According to him, there is need for the right synergy between public and private operators in the economy as Nigeria has the potential to compete with any country in the world in outsourcing of IT services.
‘‘We estimated that Nigeria’s local BPO ICT market is over $1 billion. Of that amount, being spent by both the public and private sector annually, less than 2 percent go to local entities, which are mostly support services.
‘‘We are strong and fit for local content. We are asking that we should be given the opportunity to compete. If we can get 20 percent of that $1 billion being spent on both sides, that is about $300 million, it will translate into huge leap in the economy, recite locally, and more companies will come in and more people employed.
‘‘We believe that BPO can change this economy with the right synergy. But we want everybody to come together because we have the answer to our local problem. We can do the same thing India did. All we need to do is to be more intentional and realistic to its actions.’’
He revealed that the only reason internet services are expensive in Nigeria is because most internet services are being hosted outside Nigeria.
The Chairman canvassed for localization of internet content to bring cost of internet services down to the level of common man.
He disagreed as untrue the reason given by the telcos for attempting to increase cost of data services in Nigeria.
Dr. Isa Ibrahim, Director General of National Information Technology Development Agency (NITDA), speaking on the paper entitled: “Outsourcing: A Catalyst for Change: A new Economy, Job Creation and Wealth Generation”, said that the conference theme and subtheme are apt as they portray a dedication to solving Nigeria’s current challenge of economic challenges by fashioning ways of reversing the ugly trend of economic recession quickly.
The DG NITDA said that an effectively harnessed BPO industry portends economic, political and social benefits including: helping to redirect energy and personnel into core business of the organisation and relieves management of day-to-day process procurement and disbursement challenges; improves efficiencies through economies of scale; reduces the risk of technology obsolesce, amongst others.
He pointed out that the initial and immediate benefits includes: reduction of running cost, equipment cost, overhead cost, a concise team that is focused, articulate and capable to face and conquer the competitiveness that is brought about by globalization.
He explained that that BPO provides countries that are outsourcing services, the opportunity to grow their economy by creating countless employment opportunities in the various sectors of the outsourcing landscape for its population, growing the financial capabilities of the citizenry, and economic activities culminating in the improving on the GDP.
