Seeing the jobs and opportunities that outsourcing has brought to India, Uganda has opened up a business process outsourcing center and has been training people in Internet technology. The whole Great Lakes region is hoping that foreign companies will move key functions to Africa and bring down soaring unemployment. But Uganda's lack of IT infrastructure could hold the country back.
Flavia Aliteesa’s job may consist of little more than data entry, but still, the 26-year-old Ugandan IT graduate considers herself lucky to have a job at all. Many of her classmates, she said, have been unemployed for years.
“First of all, I was given an opportunity to start working, otherwise I would have been seated back home doing nothing. At least it has given me a sense of independence, since I earn and I can do something on my own,” said Aliteesa.
Aliteesa works for a Kampala-based company called Techno Brain, which provides business process outsourcing, or BPO, to foreign firms. The Ugandan government is hoping companies like this will be the wave of the future.
Inspired by the success of countries like India, which has become a major outsourcing hub for Western companies, Uganda has been subsidizing its fledgling BPO industry by providing free office space and Internet in a new BPO incubator in Kampala. The government has trained hundreds of graduates in BPO skills like IT, and plans to train thousands more.
James Saaka, head of the National Information Technology Authority, said BPO jobs could be the answer to Uganda’s pressing problem of youth unemployment.
“It’s a very active job, so it suits the young people. Let the young people be employed and get them off the street. Let them get the experience they need, and tomorrow they will become the entrepreneurs,” he said.
With its English-speaking population and time-zone proximity to Europe, East Africa could be an attractive location for call centers and data processing, said Rogers Karebi, head of the Uganda BPO Association. Plus, he added, labor in other countries is growing more expensive.
“Quite a number of firms in India, Asia and the Middle East have stepped up their prices, so the cost of outsourcing to the initially indigenous BPO destinations is on the rise. So, quite a number of firms in the demand markets are actually looking for alternative places to outsource to,” said Karebi.
But there are big differences between Uganda and India, not least of which is the cost and reliability of the Internet. Karebi admited that this could be a big drawback in developing Uganda as a BPO destination.
“Comparatively, right now, you find that on average, we are paying about $708 per megabyte. When you go to India, it’s close to $50. You cannot compete at that level,” he said.
Most analysts agreed that the cost of Internet in East Africa would eventually come down. But even this might not be enough, said outsourcing expert Stephan Manning of the University of Massachusetts. At the end of the day, he said, the region just might not have anything special to offer.
“These services need to be distinct enough so that they don’t enter price competition. And that’s exactly the problem. In Kenya, if you provide English-speaking call center operations, then you do nothing different than the Filipinos or India, and there’s no way you can compete on costs,” he said.
Manning suggested that the solution may lie in the regional market. By offering outsourcing services to neighboring countries, he said, Uganda could avoid competing with Asia.
In the meantime, thousands of Ugandan graduates like Aliteesa are hoping these new companies will find some way to prosper.