Alex Blues, Head of IT Sourcing at PA Consulting Group, comments on Africa's rising popularity as a offshoring destination.

According to the 2009 A.T. Kearney Global Services Location index, Africa has become one of the fastest growing offshoring destinations in the world.

• Egypt is the 6th most popular location moving up from 13th,

• Ghana has moved from 27th to 15th,

• Tunisia 26th to 17th,

• Senegal 39th to 26th,

• Morocco from 36th to 30th

• And interestingly South Africa has moved the other way from the 31st to 39th.

Looking at Africa it is important to realise that you can divide the country into three areas, firstly Northern and Saharan Africa, the up and coming West and East African countries and then Southern Africa, particularly South Africa.

Northern Africa

Egypt has become a much more popular destination as American giants such as IBM and EDS have both had operations here for some time and interestingly, Wipro and Infosys have been expanding into Cairo, thereby taking advantage of the availability of low cost well qualified people. Egypt, like Morocco, also has huge support from the government to expand this ability which is key to sustainable success.

Moving along the African coast, then Morocco has rapidly found its presence as a supplier of outsourcing services to the French market. Until recently, Morocco’s outsourcing market had focused on call centres, but its expansion into banking/ insurance, telecommunications and information technology is being supported by infrastructure investment and the development of four outsourcing hubs at Fes, Marrakech, Tangier and Casablanca. A good example of increased presence is Capgemini’s recent investment in Morocco, providing sourcing services to the French market. Tunisia meanwhile is looking to emulate Morocco’s success.

West and East Africa

Kenya is heavily promoting itself as an offshore destination. As part of Kenya’s strategic plan called ‘Vision 2030’, BPO (Business Process Offshoring) has been selected as one of the six main economic pillars. With this is mind, Kenya hopes to quickly become one of the top three destinations in Africa, and government goals by 2012 are to create 7500 jobs in the BPO industry of which 5000 will be located in BPO parks.

Countries in West Africa, particularly countries like Ghana and Senegal, are growing from a very small base and outsourcing in these countries is quite often done by providing outsourced services to other West African or Central African countries. However these countries are ones to watch for the future.

Southern Africa

Moving further south, to South Africa, 5-6 years ago this was a very popular destination particularly for call centres and for financial service applications, especially in and around Cape Town and to a lesser extent Johannesburg and Durban. Interestingly, the reason for the decline is an increasing concern about the increasing value of the rand, as the economic case becomes less compelling and concerns about infrastructure deterioration grow.

Like Egypt, South Africa has looked to partner with India. The reason for this is that India is geographically closer to Europe than South Africa by roughly four hours but the time zone difference in Africa is no more than two hours + or – GMT.

In all, we are seeing much more complex relationships, with countries such as South Africa for the UK market and Morocco for the French and Spanish markets, providing first line support with India providing second and third line support, making Africa one of the fastest growing offshoring destinations in the world.