Outsourcing to africa full report arindam bose

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Outsourcing to africa full report arindam bose

  1. 1. A Relative Ranking of 15 Country LocationsOUTSOURCING TO AFRICAOUTSOURCINGTOAFRICAARelativeRankingof15CountryLocations
  2. 2. OUTSOURCING TO AFRICAA Relative Ranking of 15 Country Locations02_Africa_Report09_FR.indd Sec3:i02_Africa_Report09_FR.indd Sec3:i 2/26/09 12:14:04 PM2/26/09 12:14:04 PM
  3. 3. OUTSOURCINGTOAFRICADisclaimerThis comparative ranking report and the following fifteen country reports provide a general overview ofcurrent activities and issues related to ICT Outsourcing in the country. The data presented here shouldbe regarded as illustrative rather than exhaustive. ICT Outsourcing is at a particularly dynamic stage inAfrica; new developments and announcements are happening almost on a daily basis somewhere on thecontinent.Therefore, these reports should be seen as ‘snapshots’ that were current at the time they weretaken; it is expected that certain facts and figures presented may become outdated very quickly.The findings, interpretations and conclusions expressed herein are a faithful representation of the respond-ents of the interviews and secondary data collected. Strict analytical analysis has been carried out with theminimal influence of the authors/team members. References to data sources have been made as far aspossible. In the case of the detailed data parameters used for scores and ranking, the same data sourceand timeline has been used for all the fifteen countries compared. In the descriptive section of the countryreports, all data received from the individual country has been used in order to give a complete assess-ment. Thus, countries that have provided more information have a better coverage than those that havenot been able to provide data to the research team.Board of Executive Directors of the CBC or CyberMedia cannot guarantee the accuracy of the dataincluded in this work. The boundaries, colours, denominations, and other information shown on any mapin this work do not imply on the part of the CBC and CyberMedia any judgment of the legal status ofany territory or the endorsement or acceptance of such boundaries.Neither the firm nor its directors, employees, agents or representatives shall be liable for any damages,whether direct or indirect, special or consequential including lost revenue or profits that may arise from orin connection with the use of this information. The information is in review and will be subject to changeand amendments as appropriate.“The content of this report is of a general nature and is not intended to address the circumstances ofany particular individual or entity. Although we endeavour to provide accurate information, there can be noguarantee that such information is accurate as of the date it is received or that it will continue to beaccurate in the future. No one should act on such information without appropriate examination of theparticular situation.”Any clarifications/queries on the information should be addressed to CyberMedia.02_Africa_Report09_FR.indd Sec3:ii02_Africa_Report09_FR.indd Sec3:ii 2/26/09 12:14:05 PM2/26/09 12:14:05 PM
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  5. 5. OUTSOURCINGTOAFRICADEDICATIONDevelopment and education have come to many African nations but have the aspirationsof all the African people been met? How many have employment opportunities matchingtheir capabilities? How many people of African origin have reached the top positions in therest of the world?This study is dedicated to the youth in developing African nations, where unemployment ishigh and employment opportunities are low.Although the central theme of outsourcing of services is cost-cutting, outsourced ICT tasks toyouth at IT-enabled service centers in developing nations, is an opportunity to give dignifiedemployment to the educated youth. Such experience in work done remotely in Africa toserve the developed world enable the youth to obtain skills, experience and fierce competi-tive capabilities to face the challenging global world.This study focuses on what all the African nations covered in this study could do to improveand leverage the benefits that outsourcing can offer.Arindam BoseResearch Advisor Global ServicesCyberMedia India02_Africa_Report09_FR.indd Sec3:iii02_Africa_Report09_FR.indd Sec3:iii 2/26/09 12:14:05 PM2/26/09 12:14:05 PM
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  7. 7. vOUTSOURCINGTOAFRICAForeword by Director General CBC viiPreface by Chairman CyberMedia ixIn This Study 1Methodology 1Scope and Definitions 2Project Team 21. Africa Situation Overview 31.1. Introduction 31.2. Overview of the Fifteen African Countries as Outsourcing Destinations 61.3. Outsourcing Attractiveness Overall Scores and Ranking 71.4. Infrastructure, People & Skills and Business Environment Scores and Ranks 92. Methodology 232.1. Geographical Coverage 232.2. Research Framework and Design 242.3. Normalization and Calculation 252.4. Definitions of Lower Level Abstraction, Constructs, and Major Data Points 282.5. Definitions of Data Parameters, Units of Measurements, and Source 34Glossary 37Appendix I: Infrastructure Data Table 40Appendix II: People and Skills Data Table 42Appendix III: Business Environment Data Table 44Appendix IV: Fifteen Africa Country Profiles 47TABLE OF CONTENTS02_Africa_Report09_FR.indd Sec3:v02_Africa_Report09_FR.indd Sec3:v 2/26/09 12:14:05 PM2/26/09 12:14:05 PM
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  9. 9. viiOUTSOURCINGTOAFRICAI am delighted to present this report on the outsourcing potential of Africa, which is thefirst of its kind to outline the key issues that face the continent. Whilst there are dominantnations in the outsourcing arena such as India, Philippines, Mexico, and China, there is astrong case emerging for African nations. With vastly improved connectivity; proximity to keymarkets; multi-lingual skills; lower wage costs and suitable time-zones, many African nationsare now vying for a share of the global outsourcing business.Having been given the mandate from the Commonwealth Heads of Government in 1997 toinvolve the private sector in the promotion of trade and investment within the Common-wealth, the Commonwealth Business Council set out its vision for “sharing global prosperityby making globalisation work for all”. Since then, CBC has pursued its mission through thepromotion of global trade and investment with an enhanced role for the private sector.The Commonwealth Business Council is committed to pursuing the agenda on outsourcingin Africa. This report, as well as providing a clear picture of the current state of play withregard to infrastructure, society and economics, should act as a springboard for identifyingnew areas for projects to flourish. I sincerely hope that governments and the private sectorfind this report useful.We look forward to working together to achieve our common goals for economic growthand sustainable development in Africa.FOREWORDby Dr Mohan Kaul, Director General, CBC02_Africa_Report09_FR.indd Sec3:vii02_Africa_Report09_FR.indd Sec3:vii 2/26/09 12:14:05 PM2/26/09 12:14:05 PM
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  11. 11. ixOUTSOURCINGTOAFRICAPREFACEby Mr. Pradeep Gupta, Chairman, CyberMediaThe world of outsourcing is going through major changes with a number of countries emerg-ing as challengers to grab a share of the rapidly expanding pie. CyberMedia has witnessed,chronicled and catalyzed the growth of the Indian outsourcing industry. CyberMedia waspart of the World Bank funded study in 1992, which looked into India’s competitiveness inIT services. At that time, India’s total exports were under $150mn. In seventeen years, thisfigure has risen to a stupendous $17bn. As part of the Steering Committee of that study, Isaw how seeds of an idea can be converted into strategy and executed to make a completetransformation of an industry and indeed a nation.Africa is ready to chart this journey. Of course, the path followed by India, will not worktoday. A new strategy has to evolve relevant for a mature market with formidable players.It is with this background that CyberMedia became the knowledge partner with Common-wealth Business Council in putting together this report that compares 15 African nationsand provides pointers and data for their growth into the outsourcing area.This is merely the first step. I am sure the Africans nations covered in the study will evolvetheir future strategies on the strength of this report.02_Africa_Report09_FR.indd Sec3:ix02_Africa_Report09_FR.indd Sec3:ix 2/26/09 12:14:06 PM2/26/09 12:14:06 PM
  12. 12. 1OUTSOURCINGTOAFRICAMethodologyThe attractiveness of a nation as an outsourcing destination depends on the ICT and othersupporting infrastructure available, the skill levels of the people and their availability, andthe business environment.In this study, a framework comprising of qualitative and quantitative assessment was followed.Parameters pertaining to outsourcing were carefully selected from reputed international stud-ies. The data collected was converted to merit scores for Infrastructure, People and Skills andBusiness Environment and sub elements of these aspects. This unique ‘CyberMedia ResearchMethodology’ used to calculate the scores are described in chapter two of this report.Multi-faceted observations, which cannot be directly measured, were observed. The followingqualitative aspects important in attracting a potential investor coming to the country to setup an outsourcing operation have been analysed by survey of literature—Internet searchand limited country visits and telephonic interviews:Country, Political and Economic Profile.Principal Government Officials.Foreign Relations.Living, Security, and Safety Perceptions.ICT Policy, ICT Infrastructure and Service.ICT and BPO Industry Environment.Human Resource Efficiency and Cost.Legal and Enforcement Issues.Labour and Expatriate Worker’s Permits.Revenue, Tax, and Repatriation Issues.Investment Policy and Incentives.Government Agencies Giving Support to Outsourcing.In case of the detailed data parameters used for scores and ranking, the same data sourceand timeline has been used in order to give as complete an assessment as possible, for ranksand scores. The ‘Infrastructure’ scores are calculated on the various infrastructure-relatedparameters, and thereafter scores are divided into three bands i.e. ‘Ready’, ‘Upcoming’,and ‘Yet to be ready’, for becoming an attractive outsourcing destination. In ‘Outsourcing••••••••••••IN THIS STUDY02_Africa_Report09_FR.indd Sec1:102_Africa_Report09_FR.indd Sec1:1 2/26/09 12:14:06 PM2/26/09 12:14:06 PM
  13. 13. 2OUTSOURCINGTOAFRICAAttractiveness Index’, there are two abstraction levels—‘People and Skills’ and ‘BusinessEnvironment’, having equal weightage in overall rankings of index.The final outsourcing attractiveness index is produced keeping infrastructure rankings as thebase; only the countries which are able to qualify in infrastructure bands are placed higherin the outsourcing attractiveness index.Scope and DefinitionsWhilst there are dominant nations in the outsourcing arena such as India, Philippines,Mexico, and China, etc., there is a strong case emerging for African nations.With improving connectivity, proximity to key markets, multi-lingual skills, lower wage costsand physical infrastructure costs, and suitable time-zones many African nations are now vyingfor a share of the global outsourcing business.To make the best of this emerging opportunity, the Commonwealth Business Council (CBC)with Global Services (GS), a CyberMedia (India) group company, is presenting the firstever ‘African Outsourcing Summit’ in 2009. This summit will bring representatives fromover fifteen African nations together with key decision makers and other stakeholders fromEuropean and global outsourcing industry.This research effort by CyberMedia-Global Services (India) benchmarks fifteen African coun-tries on many different parameters that will help decision makers in matching the rightoutsourcing destinations with outsourcing needs. This report is the background paper forthe summit.Project TeamMr. Kamal Vohra, Assistant Manager, CyberMedia IndiaMr. Kapil Dev Singh, Senior Vice-President, CyberMedia IndiaMr. Arindam Bose, Research Advisor, CyberMedia IndiaMr. Hoshie Ghaswalla, President, CyberMedia IndiaMs. Keerthi Nair, Sr. Manager (Editorial), CyberMedia India (Editorial Support)Mr. Bhupendra Bhanu, GM, CyberMedia India (Production Co-ordinator)Mr. Satish Khankriyal, Manager (R&D), CyberMedia India (Design & Layout)Mr. Ashimendu Dey, Associate Art and Ms. Poonam Ujjainwal, Sr. Illustrator,CyberMedia India (Illustrations)Mr. Raj Kishore, Graphic Designer, CyberMedia India (Cover Design)1.2.3.4.5.6.7.8.9.In This Study02_Africa_Report09_FR.indd Sec1:202_Africa_Report09_FR.indd Sec1:2 2/26/09 12:14:06 PM2/26/09 12:14:06 PM
  14. 14. 3OUTSOURCINGTOAFRICA1.1. IntroductionThis research effort by CyberMedia-Global Services (India) benchmarks fifteen African coun-tries on many different parameters that will help decision makers in matching the rightoutsourcing destinations with outsourcing needs.Whilst there are dominant nations in the outsourcing arena such as India, Philippines,Mexico, and China, there is a strong case emerging for African nations.With improving connectivity, proximity to key markets, multi-lingual skills, lower wage costsand physical infrastructure costs, and suitable time zones many African nations are now vyingfor a share of the global outsourcing business.Africa is vast and varied and, thus, to begin, the diversity and commonality of these fifteencountries is presented.Diversity: Africa is vast and diverse, but perhaps the greatest variation is in the wealthand population of different countries. It is worth looking at these absolute figures forthe countries in this study.GDP per capita (USD)70006000500040003000200010000* GDP below USD 2000Egypt*MauritiusSouthAfricaTunisiaMorocco*BotswanaGhana*Zambia*NamibiaKenya*Senegal*Mozambique*NigeriaTanzania*Uganda*Source: CyberMedia, Global Services, CBCFigure 1: GDP per capita (USD)•1. AFRICA SITUATION OVERVIEW02_Africa_Report09_FR.indd Sec1:302_Africa_Report09_FR.indd Sec1:3 2/26/09 12:14:06 PM2/26/09 12:14:06 PM
  15. 15. 41. Africa Situation OverviewOUTSOURCINGTOAFRICAEgypt**Mauritius**SouthAfricaTunisia**Morocco**BotswanaGhana**Zambia**NamibiaKenyaSenegalMozambiqueNigeria**Tanzania**Uganda**60.00Population unemployed (% of labour...)50.0040.0030.0020.0010.000** Unemployment below 20%Source: CyberMedia, Global Services, CBCFigure 2: Population unemployedThe gross national per capita income, population, population density, un-employment,poverty, and other major characteristics are very diverse and at times seemingly contra-dictory. All possible combinations are there across these fifteen nations, namely:Low GDP* and Low Unemployment**: Egypt, Morocco, Tanzania, Uganda,Ghana, and Zambia.High GDP and Low Unemployment: Mauritius, Nigeria, and Tunisia.Low GDP and High Unemployment: Kenya, Mozambique, and Senegal.High GDP and High Unemployment: Botswana, South Africa, and Namibia.Commonality: There is one aspect common to Africa and specially sub-Saharan Africa—severe limitations in broadband connectivity. This diagram shows the severe limitationsof this continent with reference to all other continents.Fiber in use as of year-end 2004>500 500 50 10GbpsSource: TeleGeography Research @ 2006 PriMetrica.lnc.Figure 3: Existing broadband connectivity to Africa•02_Africa_Report09_FR.indd Sec1:402_Africa_Report09_FR.indd Sec1:4 2/26/09 12:14:06 PM2/26/09 12:14:06 PM
  16. 16. 1. Africa Situation Overview5OUTSOURCINGTOAFRICAAttempts to improve this situation are in progress and will take till 2011 to materializewith the following systems coming up to connect African countries:SeacomEast Coast.13 700 km undersea cable.To connect Southern and East Africa.To India and Europe via Madagascar, Mozambique, Tanzania, Kenya.Complete by June 2009.To provide low-cost broadband.EASSyEast Coast.10 000 km.To connect South Africa, Mozambique, Madagascar, Somalia, Djibouti, Sudan.To be complete by end of 2010.Financed by World Bank and DBSA.InfracoWest Coast to UK.To be complete by first half of 2010.Originally built by State Companies Eskom and Transnet—both shareholders atNeotel.This is the expected scenario by 2011.Source: CyberMedia, Global Services, CBCFigure 4: Anticipated broadband scenario by 2011•••••••••••••••••02_Africa_Report09_FR.indd Sec1:502_Africa_Report09_FR.indd Sec1:5 2/26/09 12:14:06 PM2/26/09 12:14:06 PM
  17. 17. 61. Africa Situation OverviewOUTSOURCINGTOAFRICAConsequently the cost of connectivity is extremely high—negative to outsourcingefforts; the figure below shows the comparison of connectivity costs of African coun-tries with others.South AsiaUS$per100kbps(2006)Middle East &North AfricaEurope &Central AsiaLatin America& CaribbeanEast Asia &PacificSub-SaharanAfrica020406080100120Comparison of Regional Average Broadband Retail PricesSource: ITU 2007a. World Bank staff analysisFigure 5: Broadband connectivity costs by regionWith the developments expected this situation should improve. This graph clearly shows anadvantage that North Africa has over sub-Saharan, central, and southern Africa on outsourc-ing infrastructure. Still, Africa is far disadvantaged as compared to East Asia, Pacific, andeven Latin America and the Caribbean.1.2. Overview of the Fifteen African Countries asOutsourcing DestinationsOutsourcing has arrived in Africa. This report quantitatively shows what is possible. In spiteof the negative perceptions that Africa has only places like Somalia with pirates, Congo fullof rebels, Nigeria the citadel of cyber crime, and South Africa the hotbed of carjacking andWild West type of shootouts, Africa has the most peaceful, clean, and serene locations. Todaymost ‘Bollywood’1and even some ‘Hollywood’ movies are shot in Africa. Thus outsourcinghas come for good, and it is for the African nations to come together and spread the rightmessage to propagate the right image of Africa as an outsourcing destination.The findings reveal that Africa has arrived in outsourcing with North Africa leading andSouth Africa close behind. The broadband connectivity projects in hand due to be com-pleted in the next few years will make parts of Africa, more tranquil, sparsely populated, andenvironmentally clear and clean—the next preferred outsourcing destination.1Citadel of the Indian Cinema Industry—Hollywood of India02_Africa_Report09_FR.indd Sec1:602_Africa_Report09_FR.indd Sec1:6 2/26/09 12:14:07 PM2/26/09 12:14:07 PM
  18. 18. 1. Africa Situation Overview7OUTSOURCINGTOAFRICAMorocco *MoroccoTunisia *Geographical Coverage and RankTunisiaEgypt *EgyptSenegal *SenegalGhanaGhanaNigeriaNigeriaUgandaUgandaKenyaKenyaTanzaniaTanzaniaZambiaZambiaMozambique MozambiqueBotswanaBotswanaNamibiaNamibiaSouthAfricaSouth AfricaMauritiusAfrica*Non-Commonwealth CountriesMauritiusSource: CyberMedia, Global Services, CBCFigure 6: Map of Africa showing the countries in the three bands—Ready,Upcoming, and Yet to be ready Infrastructure Status1.3. Outsourcing Attractiveness’ Overall Scores and RankingThe overall outsourcing attractiveness depends primarily on the infrastructure readiness fol-lowed by a combination of people and skills and business environment. The countries arefirst categorized in bands depending on infrastructure readiness followed by ranking withinthe bands based on the sum of the people and skills and business environment scores. Peopleand skills and business environment have equal importance, hence equal weightage.Outsourcing Attractiveness IndexCountries are ranked within their bands based on theirBE + People & Skill ScoresCountries are ranked within their bands based on their:People & Skills ScoresplusBusiness Environment ScoresSource: CyberMedia, Global Services, CBCFigure 7: Deriving outsourcing attractiveness ranking02_Africa_Report09_FR.indd Sec1:702_Africa_Report09_FR.indd Sec1:7 2/26/09 12:14:07 PM2/26/09 12:14:07 PM
  19. 19. 81. Africa Situation OverviewOUTSOURCINGTOAFRICAThe following final ranks and scores emerge:Outsourcing Attractiveness RankGhanaKenyaBotswanaSenegalMozambiqueNamibiaZambiaUPCOMMINGBotswanaGhanaZambiaNamibiaKenyaSenegalMozambique6.576.325.915.915.825.795.351234567NigeriaTanzaniaUganda1236.305.685.68InfrastructureBand CountryTunisiaSouth AfricaEgyptMoroccoMauritiusREADYBE + People & SkillsRanks Country ScoreEgyptMauritiusSouth AfricaTunisiaMorocco123457.187.086.986.776.43NigeriaTanzaniaUgandaYET TOBE READYSource: CyberMedia, Global Services, CBCFigure 8: Outsourcing attractiveness rankingEgypt turns out as the most attractive location in Africa. Egypt will have strong competitionfrom all the others in the infrastructure ready band as all are working hard to improve. Egypthas an edge because ICT is supported and believed in by the leadership and all actions arecoordinated. Further with the close coordination between different departments, especially theInformation Technology Industry Development Agency (ITIDA) and the General Authority forInvestment and Free zones (GAFI), makes a real single window service for any industry comingin to Egypt. An additional strength is the serious and coordinated efforts that the governmentand other stakeholders are making to maintain a steady supply of trained human resources ona continuing basis. Egypt is first in the people and skills score in this study. Egypt will howeverhave to look at cyber laws, tax rates, and general living conditions and infrastructure to maintainthis position. Again, in January 2009, Egypt has done very well according to a study completedby Gartner. The biggest challenge that Egypt will face is strong competition from South Africa,Morocco, Tunisia, and Mauritius. South Africa will soon overtake all others in banking, finance,and sensitive operations that need a strong security base. Also South Africa will forge closer tieswith the United Kingdom and United States of America than any other in the region.In the next band Botswana is topping and may jump soon if the promises made in various poli-cies and programmes are kept. The Botswana Innovation Hub and how it actually works andkeeps up the announced promises will pave the future as far as Botswana’s position is concerned.If Botswana does jump to the ‘Ready’ band it may well overtake some of the current leaders.In the Yet to be ready band Nigeria falls just short of the required infrastructure score. IfNigeria improves to enter the infrastructure upcoming band it will be within the top threein that band; thus there is potential to be taken advantage of here. Nigeria currently is thebest out of the fifteen in export of ICT services.02_Africa_Report09_FR.indd Sec1:802_Africa_Report09_FR.indd Sec1:8 2/26/09 12:14:08 PM2/26/09 12:14:08 PM
  20. 20. 1. Africa Situation Overview9OUTSOURCINGTOAFRICA1.4. Infrastructure, People & Skills and BusinessEnvironment Scores and RanksA. Infrastructure ReadinessThe ‘Infrastructure Readiness’ of a nation is the most important factor in the nation becom-ing an attractive outsourcing destination. This readiness is in terms of the availability andpenetration on one side, and the infrastructure cost on the other. The two infrastructureconstruct scores come from the major data points of availability/penetration of infrastruc-ture and cost of infrastructure.To access the Infrastructure Data Table for all these fifteen countries, please see Appendix I.6.26.16.16.05.85.75.567891011121314154.94.33.7Rank Country Score123457.87.26.86.76.5GhanaKenyaBotswanaSenegalMozambiqueNamibiaZambiaTunisiaSouth AfricaEgyptMoroccoMauritiusNigeriaUgandaTanzaniaReady Scores of at least 6.5Scores of between 5.5 and 6.5Scores of at least 5.4UpcomingYet to be readySource: CyberMedia, Global Services, CBCFigure 9: ‘Infrastructure Readiness’ scores and rankingOn the infrastructure readiness, Tunisia is far ahead of other countries with 7.8; SouthAfrica is following with a score of 7.2. Egypt, Morocco and Mauritius also easily passed inthe infrastructure to the ready category/band. The upcoming band contains Ghana, Kenya,Botswana, Senegal, Mozambique, Namibia, and Zambia. The countries scoring very low oncurrent infrastructure state are, Tanzania, Nigeria, and Uganda ranking fifteen, fourteen,and thirteen, respectively, out of the list of fifteen African countries.Infrastructure—Availability & Penetration and CostThere are two main factors that lead to the complete infrastructure score; infrastructureavailability and penetration and infrastructure cost. In the case of the outsourcing needs,the first is critical and time consuming and thus has a greater role. Infrastructure cost isimportant but second to the first as large outsourcing operators have the negotiating advan-tage of large volume and can manage better costs.02_Africa_Report09_FR.indd Sec1:902_Africa_Report09_FR.indd Sec1:9 2/26/09 12:14:08 PM2/26/09 12:14:08 PM
  21. 21. 101. Africa Situation OverviewOUTSOURCINGTOAFRICAInfrastructure availability and penetrationThis construct score is made up of the major data point (MDP) scores Network Readi-ness, Internet Bandwidth, Electricity Availability, and the Road and Rail Network.Infrastructure Availability & Penetration5.554.543.532.521.510.50EgyptMauritiusSouthAfricaTunisiaMoroccoBotswanaGhanaZambiaNamibiaKenyaSenegalMozambiqueNigeriaTanzaniaUgandaReadyUpcomingYet to be readySource: CyberMedia, Global Services, CBCFigure 10: Infrastructure Availability and Penetration Scores and RankingInfrastructure—costThis construct score is made up of the major data point (MDP) scores coming from costof space and facilities (Africa Research Report, Knight Frank); Cost of Stay and Trans-port (UNDP rates and prevailing air fares) and data transfer costs (World Bank).3.5Infrastructure CostReadyUpcomingYet to be ready32.521.510.50TunisiaSouthAfricaMozambiqueGhanaKenyaMauritiusEgyptBotswanaSenegalMoroccoZambiaNigeriaNamibiaTanzaniaUgandaSource: CyberMedia, Global Services, CBCFigure 11: Infrastructure costs scores and rankingIt is now pertinent to look at each one of the individual ‘Major Data Points’ (MDPs)that go towards these two constructs, namely availability and cost.••02_Africa_Report09_FR.indd Sec1:1002_Africa_Report09_FR.indd Sec1:10 2/26/09 12:14:08 PM2/26/09 12:14:08 PM
  22. 22. 1. Africa Situation Overview11OUTSOURCINGTOAFRICAInfrastructure—availability/penetration-network readinessEgyptMauritiusSouthAfricaTunisiaMoroccoBotswanaGhanaZambiaNamibiaKenyaSenegalMozambiqueNigeriaTanzaniaUgandaReadyUpcomingYet to be readyNetwork Readiness9.008.007.006.005.004.003.002.001.000.00Source: CyberMedia, Global Services, CBCFigure 12: Network readiness ‘MDP’ scoresIn this MDP score all the fifteen countries are scoring between 5.79 (for Mozambique)and 7.78 (for Tunisia, which is the best).Infrastructure—availability/penetration-international Internet bandwidthReadyUpcomingYet to be readyMoroccoZambiaTunisiaKenyaSouthAfricaMozambiqueMauritiusGhanaNigeriaEgyptSenegalBotswanaNamibiaUgandaTanzaniaInternational Internet Bandwidth12.0010.008.006.004.002.000.00Source: CyberMedia, Global Services, CBCFigure 13: International Internet bandwidthIt is important to recognise that all these will improve as soon as broadband connectionfrom all the new projects are complete in 2009 to 2011.••02_Africa_Report09_FR.indd Sec1:1102_Africa_Report09_FR.indd Sec1:11 2/26/09 12:14:08 PM2/26/09 12:14:08 PM
  23. 23. 121. Africa Situation OverviewOUTSOURCINGTOAFRICAInfrastructure—availability/penetration-electricity availabilityReadyUpcomingYet to be readySouthAfricaTunisiaMozambiqueGhanaKenyaMauritiusEgyptBotswanaSenegalMoroccoZambiaNigeriaNamibiaTanzaniaUganda12.00Electricity Availability10.008.006.004.002.000.00Source: CyberMedia, Global Services, CBCFigure 14: Electricity availabilityThe availability of electricity is crucial for any industry to set up and flourish. And forthe offshore outsourcing where downtime is crucial for make or break, electricity avail-ability plays a major role.South Africa with a weighted ‘MDP’ score of 9.80 out of ten is topping the list inelectricity quality and availability, which is followed by Egypt, Morocco, Mozam-bique, Zambia, Ghana, Kenya, Namibia, Nigeria, and Tunisia.The rest of the countries like Botswana, Tanzania, Mauritius, Senegal, and Uganda,having scored below half the maximum score, need to improve their electricityinfrastructure to make themselves world standard.At the same time there is a likehood of acute electricity shortages in South Africaand the southern African region with the demand increasing and supply remain-ing the same. This shortage of power appears to be a satire as the region is a richcoal bed with investors ready to put in power plants if they can arrange economiesof scale by negotiating long-term power purchase agreements with more than onecountry in the region.Botswana, currently scoring low in this data point, is one country that could takeadvantage of this opportunity both in terms of an outsourcing destination as wellas a supplier of power from its abundant reserves of coal and exploitation of theabundant solar radiation.•••••02_Africa_Report09_FR.indd Sec1:1202_Africa_Report09_FR.indd Sec1:12 2/26/09 12:14:09 PM2/26/09 12:14:09 PM
  24. 24. 1. Africa Situation Overview13OUTSOURCINGTOAFRICAInfrastructure—availability/penetrationEgyptMauritiusSouthAfricaTunisiaMoroccoBotswanaGhanaZambiaNamibiaKenyaSenegalMozambiqueNigeriaTanzaniaUgandaReadyUpcomingYet to be readyRoad/Rail Network and Air Travel9.008.007.006.005.004.003.002.001.000.00Source: CyberMedia, Global Services, CBCFigure 15: Road and rail networkMore than half the countries score high in this major data point (MDP) withTunisia, Namibia, and Botswana leading, though Botswana and Namibia are in theUpcoming band.Infrastructure cost—rental and cost of commercial premisesThe rental and cost of commercial premises is a Major Data Parameter (MDP) thathelps in calculating overall cost of rental (per sq ft) and cost of ownership of premisesfor commercial activity. It is worth remembering that a higher score means a morecost-effective space and facilities. Thus space and facilities in Botswana are more costeffective than those in South Africa or Egypt.EgyptMauritiusSouthAfricaTunisiaMoroccoBotswanaGhanaZambiaNamibiaKenyaSenegalMozambiqueNigeriaTanzaniaUgandaReadyUpcomingYet to be readyRental and Cost of Commercial Premises12.0010.008.006.004.002.000.00Source: CyberMedia, Global Services, CBCFigure 16: Costs of inputs in terms of space and facilities••02_Africa_Report09_FR.indd Sec1:1302_Africa_Report09_FR.indd Sec1:13 2/26/09 12:14:09 PM2/26/09 12:14:09 PM
  25. 25. 141. Africa Situation OverviewOUTSOURCINGTOAFRICAInfrastructure cost—stay and travel ‘MDP’ scoresTravel and stay costs of the people travelling to support the outsourcing industriesfrom countries that buy these services need to be considered. This ‘MDP’ is based onthe UNDP travelling allowance rates and prevailing cost of tickets from London to thedestination country as the detailed data points.ReadyUpcomingYet to be readyTunisiaSenegalMoroccoBotswanaEgyptZambiaGhanaMauritiusNigeriaNamibiaMozambiqueSouthAfricaTanzaniaKenyaUganda8.00Cost of Stay & Travel6.007.005.004.003.002.000.001.00Source: CyberMedia, Global Services, CBCFigure 17: Costs of inputs in travel and stayInfrastructure cost—telecom/data transfer ‘MDP’ costThe Telecom/Data Transfer Cost major data parameters is based on the detailed dataparameter for call charges (mobile/landline) to major world cities and the Internet/data transfer tariff per month. South Africa has the lowest telecom and data transfercost and is topping the list of fifteen African countries; it is followed closely by Egyptand Tunisia. Namibia, Tanzania, Uganda, Botswana, and Kenya have to improve theefficiency of their telecom infrastructure in this sector to lower the cost.ReadyUpcomingYet to be readySouthAfricaMoroccoNigeriaMauritiusGhanaTanzaniaEgyptKenyaUgandaTunisiaSenegalZambiaMozambiqueBotswanaNamibia8.009.00Telecom/Data Transfer Cost6.007.005.004.003.002.000.001.00Source: CyberMedia, Global Services, CBCFigure 18: Costs of inputs in terms of telecom/data transfer••02_Africa_Report09_FR.indd Sec1:1402_Africa_Report09_FR.indd Sec1:14 2/26/09 12:14:09 PM2/26/09 12:14:09 PM
  26. 26. 1. Africa Situation Overview15OUTSOURCINGTOAFRICAB. People and SkillsThis lower level abstraction covers the resources in terms of people and skills-set require-ments that go into an outsourcing engagement from the point of view of people and avail-able skill sets to successfully operate outsourcing operations. People and skills lower levelabstraction score emerges from the construct scores related to availability, suitability and HRCosts and is based on the following MDP’s:Quantity and Working Satisfaction.Quality.ICT Exposure and Education.Language and Domain Skills.Personnel Compensation and Cost of Living.3.2153.1733.0092.9642.9482.9332.88467891011121314152.8792.8672.640Ranks Country Score123453.6203.5433.4913.4473.385BotswanaMoroccoKenyaUgandaTanzaniaNamibiaZambiaEgyptGhanaSouth AfricaTunisiaMauritiusNigeriaSenegalMozambiqueReadyUpcomingYet to be readySource: CyberMedia, Global Services, CBCFigure 19: People and skills—ranking and scoresTo access the People and Skills Data Table for all these fifteen countries, please seeAppendix II.In people and skills rankings, Egypt is leading the list with a weighted score of 3.620 out of10, closely followed by Ghana and South Africa with a weighted score of 3.543 and 3.491,respectively. Although the total population of Tunisia and Mauritius is much lower than theSouth Africa, Ghana, Nigeria, Morocco but the high availability of educated skilled work-ing population and their capability to cater to the niche of outsourcing market helped intheir favour.In the lower band of People and Skills rankings, Uganda, Tanzania, Namibia, Zambia,Nigeria, Senegal, and Mozambique have to improve their teaching standards, quality andsupply of human resources for the human intensive outsourcing industry.•••••02_Africa_Report09_FR.indd Sec1:1502_Africa_Report09_FR.indd Sec1:15 2/26/09 12:14:10 PM2/26/09 12:14:10 PM
  27. 27. 161. Africa Situation OverviewOUTSOURCINGTOAFRICABotswana, Morocco, Kenya, Uganda and Tanzania are in the mid ranks and can improveby improving the ICT exposure and by adopting better teaching standards suitable for out-sourcing industry.To conclude, the variation in this lower level abstraction covering people and skills is notso great among all the fifteen countries.The contributing factors to these findings are illustrated in the next section in graphs thatshow the scores achieved by each country in a given contributing parameter.People and skills—availabilityThis construct gives a score that indicates the availability of human resources requiredfor an outsourcing destination. The major data points are the quantity and workingsatisfaction in the country. Quantity is based on a number of detailed data parametersrelated to population, literacy, education levels, and unemployment rates.The findings for the fifteen countries are shown as under.People & Skills — AvailabilityTunisiaSouthAfricaMozambiqueGhanaKenyaMauritiusEgyptBotswanaSenegalMoroccoZambiaNigeriaNamibiaTanzaniaUgandaReady1.41.210.80.60.40.20Working Satisfaction QuantityUpcoming Yet to be readySource: CyberMedia, Global Services, CBCFigure 20: People and skills availabilityIt is interesting to observe that with diverse population figures from as low as 1.1 mil-lion to figures as high as 141 million all countries do contribute. The study has comeup with tangible scores for all countries. The variation of the scores among the diversecountries is not so great. This shows that all fifteen countries have potential, and ourmethodology caters for such a fair assessment in such diversity.•02_Africa_Report09_FR.indd Sec1:1602_Africa_Report09_FR.indd Sec1:16 2/26/09 12:14:10 PM2/26/09 12:14:10 PM
  28. 28. 1. Africa Situation Overview17OUTSOURCINGTOAFRICAPeople and skills—suitabilityThe detailed data points relevant data from international sources as indicated in themethodology. The findings for the fifteen countries are shown as under.EgyptMauritiusSouthAfricaTunisiaMoroccoBotswanaGhanaZambiaNamibiaKenyaSenegalMozambiqueNigeriaTanzaniaUgandaPeople & Skills—SuitabilityICT Exposure QualityEducation, Languages, and Domain skills0.80.70.60.50.40.30.20.10Ready Upcoming Yet to be readySource: CyberMedia, Global Services, CBCFigure 21: People and skills suitabilityThis construct assesses the suitability of the human resources available in the countryfor outsourcing operations. The major data parameters include ICT exposure, educa-tion, language and domain skills, and quality.The graph shows that there is a relatively large variation in ICT exposure among thedifferent countries with the countries in the infrastructure ready and upcoming bandsleading. In the case of education and quality all countries are comparable.People and skills—human resource costsThis construct assesses the human resource cost factor in outsource operations and isbased on scores for personnel compensation and the cost of living. The detailed dataparameters used are from the UNDO local salary rates and cost of living index fromWorld Bank World Development indicators. The findings from the fifteen countries arepresented in the graph below. It is important to remember that a low score for the costof living indicates an expensive country and similarly a high personal compensationscore represents a lower salary rate. Thus Botswana, Ghana, and Tanzania are morecompetitive than South Africa or Tunisia.••02_Africa_Report09_FR.indd Sec1:1702_Africa_Report09_FR.indd Sec1:17 2/26/09 12:14:10 PM2/26/09 12:14:10 PM
  29. 29. 181. Africa Situation OverviewOUTSOURCINGTOAFRICAPeople & Skills—HR CostHR Cost — Personal compensation10.80.60.40.20Cost of livingTunisiaSouthAfricaMauritiusEgyptMoroccoMozambiqueGhanaKenyaBotswanaSenegalZambiaNamibiaNigeriaTanzaniaUgandaReady Upcoming Yet to be readySource: CyberMedia, Global Services, CBCFigure 22: People and skills—HR costsC. Business EnvironmentThis lower-level abstraction covers a large number of factors that go into making a businessoperation successful in the country especially with reference to outsourcing. Factors likethe economic outlook, corruption perception, rule of law, government policies related tooutsourcing, tax policies, risk factors, and financial aspects are considered in this data set.3.3263.2613.0262.9762.9272.8132.78167891011121314152.7352.7132.711Ranks Country Score123453.6953.5583.4863.4193.357TunisiaMoroccoZambiaNamibiaSenegalKenyaGhanaMauritiusEgyptSouth AfricaNigeriaBotswanaTanzaniaUgandaMozambiqueReadyUpcomingYet to be readySource: CyberMedia, Global Services, CBCFigure 23: Business environment—scores and rankingThe Business Environment lower-level abstraction score emerges from five constructscores indicated:02_Africa_Report09_FR.indd Sec1:1802_Africa_Report09_FR.indd Sec1:18 2/26/09 12:14:11 PM2/26/09 12:14:11 PM
  30. 30. 1. Africa Situation Overview19OUTSOURCINGTOAFRICABusiness Environment Index.ICT Industry Activeness.Economic Outlook.Risk Parameter.Tax and Financial Incentives.The detailed framework links the lower level abstraction with the constructs and major datapoints covered in Chapter 2 (Methodology).To access the Business Environment Data Table for all the fifteen countries, please seeAppendix III.In the business environment rankings, Mauritius is leading the list with weighted score of3.695 for its business-positive environment. Egypt is at second position with a weighted scoreof 3.558; closely following is South Africa with weighted score of 3.486. Startlingly, the rank-ings of Tunisia and Morocco are trailing the list at sixth and seventh positions with weightedscores of 3.326 and 3.261, respectively.The contributing factors to these findings are illustrated in the next section in graphs thatshow the scores achieved by each country in a given contributing parameter.Contributing Constructs and Major Data PointsBusiness environment—ease of doing business scoreThis construct gives a score and a measure of the steps that need to be completedbefore starting a business. This is determined by one Major Data Parameter ‘Ease ofDoing Business’ derived from considering detailed data parameters that include proce-dures to start a business, protecting investors, and corruption perception index.TunisiaSouthAfricaMozambiqueGhanaKenyaMauritiusEgyptBotswanaSenegalMoroccoZambiaNigeriaNamibiaTanzaniaUgandaReady Upcoming Yet to be ready0.400.350.300.250.200.150.100.050.00Ease of Doing BusinessSource: CyberMedia, Global Services, CBCFigure 24: Business environment—ease of doing business score••••••02_Africa_Report09_FR.indd Sec1:1902_Africa_Report09_FR.indd Sec1:19 2/26/09 12:14:11 PM2/26/09 12:14:11 PM
  31. 31. 201. Africa Situation OverviewOUTSOURCINGTOAFRICAMauritius, South Africa, and Botswana are leading and are closely, followed by Egypt,though in practice Egypt is perhaps doing much better after the establishment of theGeneral Authority for Investment and Free Zones (GAFI) as a true single window;in the case of outsourcing industry in Egypt, the Information Technology IndustryDevelopment Agency (ITIDA) supports the GAFI. The time and effort were found tohave really improved as a result of this initiative. South Africa and Mauritius have simi-lar agencies in place working for the last few years, and once the Botswana InnovationHub (BIH) is operational Botswana would improve further.Business environment—ICT industry attractiveness scoreThe ICT industry attractiveness has been determined by the ICT Legislation andenforcement procedures in place and the magnitude of ICT in exports.ICT Industry Attractiveness0.450.40.350.30.250.20.150.10.050TunisiaSouthAfricaMauritiusEgyptMozambiqueGhanaKenyaBotswanaSenegalZambiaNamibiaNigeriaTanzaniaUgandaICT Security; Cyber Laws and IPR Scores Expot & Share of ICTReady Upcoming Yet to be readyMoroccoSource: CyberMedia, Global Services, CBCFigure 25: Business environment—ICT industry attractiveness scoreIn ICT laws and its enforcement South Africa and Kenya lead (most banks do theirback-office processing there). Even Egypt, Botswana, Morocco, and Tunisia need toimprove. Nigeria has a moderate score here, but this is a bit of a surprise as cybercrime literature reports that most cyber crime and related negative actions originate inNigeria. Further, Nigeria has the highest score of ICT exports; however, it is in the Yetto be ready band. Perhaps this is due to the population of 141 million and several Nige-rians working abroad. It is a case of ‘Buddy Shopping’ like in the old days in India.•02_Africa_Report09_FR.indd Sec1:2002_Africa_Report09_FR.indd Sec1:20 2/26/09 12:14:11 PM2/26/09 12:14:11 PM
  32. 32. 1. Africa Situation Overview21OUTSOURCINGTOAFRICABusiness environment—economic outlook scoreThis is based on economic and trade parameters.TunisiaSouthAfricaMozambiqueGhanaKenyaMauritiusEgyptBotswanaSenegalMoroccoZambiaNigeriaNamibiaTanzaniaUgandaReady Upcoming Yet to be ready0.400.350.300.250.200.150.100.050.00Economic OutlookShare of Services in GDP, Economy Size and Growth, InflationShare of Exports, Share of Services in ExportsCountry Forex ReservesSource: CyberMedia, Global Services, CBCFigure 26: Business Environment—economic outlook scoreAs per the report, South Africa, Mauritius, and Botswana lead with Egypt and Tunisiafollowing close behind.Business environment—risk parameter scoreThis factor is determined from the perceived risk in the country from geopolitical,currency fluctuation, and legislative risk.Business Environment—Risk Parameter0.600.500.400.300.200.100.00TunisiaSouthAfricaMauritiusEgyptMoroccoMozambiqueGhanaKenyaBotswanaSenegalZambiaNamibiaNigeriaTanzaniaUgandaGeo-Political Risk Currecy Risk Legislative RiskReady Upcoming Yet to be readySource: CyberMedia, Global Services, CBCFigure 27: Business environment—risk parameter score••02_Africa_Report09_FR.indd Sec1:2102_Africa_Report09_FR.indd Sec1:21 2/26/09 12:14:11 PM2/26/09 12:14:11 PM
  33. 33. 221. Africa Situation OverviewOUTSOURCINGTOAFRICAEgypt, Tunisia, and Morocco lead with the least risk in all three factors followed bySouth Africa and Botswana in all aspects except the currency risk where South Africa,Botswana, and Namibia (all ties to the rand basket) are the worst in Africa.Business environment—tax and financial incentive scoresThis is based on the overall tax on profit and cost of finance.Business Environment—Tax & Financial Incentive0.350.500.450.400.300.250.200.150.100.000.05TunisiaSouthAfricaMauritiusEgyptMoroccoMozambiqueGhanaKenyaBotswanaSenegalZambiaNamibiaNigeriaTanzaniaUgandaTax Rate Easy & Cost of financeReady Upcoming Yet to be readySource: CyberMedia, Global Services, CBCFigure 28: Business environment—tax and financial incentive scoresIn tax benefits Botswana and Zambia lead with South Africa and Mauritius not farbehind. Egypt, Tunisia, and Morocco fall far behind.In the cost of finance South Africa leads with Botswana and Egypt following.Although there is a vast variation in tax rates across the fifteen countries, the costof finance is comparable.••••02_Africa_Report09_FR.indd Sec1:2202_Africa_Report09_FR.indd Sec1:22 2/26/09 12:14:12 PM2/26/09 12:14:12 PM
  34. 34. 23OUTSOURCINGTOAFRICA2. METHODOLOGYThis part of the report describes the research methodology followed2.1. Geographical CoverageIn this report, fifteen African nations shown in the following map have been covered.Morocco *Tunisia *Egypt *Senegal *Ghana NigeriaUgandaKenyaTanzaniaZambiaMozambiqueBotswanaNamibiaSouthAfricaMauritiusAfrica*Non-Commonwealth CountriesSource: CyberMedia, Global Services, CBCFigure 29: Geographical coverage02_Africa_Report09_FR.indd Sec1:2302_Africa_Report09_FR.indd Sec1:23 2/26/09 12:14:12 PM2/26/09 12:14:12 PM
  35. 35. 24OUTSOURCINGTOAFRICA2.2. Research Framework and DesignCyberMedia Research FrameworkIn this research the broad framework shown in the following diagram has been followed.A multi-faceted concept,which cannot be directlymeasuredSub aspects of theabstraction flow fromthe topSpecific measurableaspects, more clear thanabstraction but still broadVariables actuallymeasure the entitieson the basis of definedscaleMeasurementScaleLower LevelAbstractionDetailed Date Parameters andOperational Variables (DDP’s)Constructs, Sub-Constructs, MajorDate Points (MDP’s)AbstractionSource: CyberMedia, Global Services, CBCFigure 30: Research approachAbstraction: At this level, multi-faceted observations which cannot be directly measuredare observed. The following aspects, important in attracting a potential investor com-ing to the country to set up an outsourcing operation, have been analysed by survey ofliterature, Internet search, and limited country visits and telephonic interviews.Country Political and Economic Profile.Principal Government Officials.Foreign Relations.Living, Security, and Safety Perceptions.ICT Policy, ICT Infrastructure and Service.ICT and BPO Industry Environment.Human Resource Efficiency and Cost.Legal and Enforcement Issues.Labour and Expatriate Worker’s Permits.Revenue, Tax, and Repatriation Issues.Investment Policy and Incentives.Government Agencies Giving Support to Outsourcing.Lower-level abstraction: At this level the qualitative aspects augment the quantitativescores coming up from the scores at the ‘Construct’ and ‘Major Data Point’ levels. As••••••••••••••2. Methodology02_Africa_Report09_FR.indd Sec1:2402_Africa_Report09_FR.indd Sec1:24 2/26/09 12:14:12 PM2/26/09 12:14:12 PM
  36. 36. 25OUTSOURCINGTOAFRICAthe scores have to be added in a weighted sum depending on the relative importanceof each data point, a careful normalisation and calculation method has been evolved.The weightage is defined in detailed research framework charts. These are explainedin the next sections.Constructs: These are specific and more measurable aspects, broad but clearer, than thelower level abstraction. The construct scores are derived by a weighted sum of ‘MajorData Points’. The principles are the same as indicated for lower level abstracts.Major data points: These are more specific and more measurable aspects. The ‘Major DataPoints’ scores are derived by the average of all the ‘Detailed Data Points’ allotted to that‘Major Data Point’. The principles are the same as indicated for lower level abstracts.Detailed data points: These are variables actually measured on the basis of unit and skill.In this research, such data has been collected from reliable internationally recognisedand published reports. The data that has been used is in two forms:Rating Scores representing the result of any extensive survey and study conductedby a recognised board like World Economic Forum’s Global Information TechnologyReport or Global Competitiveness Report, the United Nations Human DevelopmentsReports. Such scores are in a skill of one to ten, one to seven, or zero to one.Absolute values of data like number of procedures to start a business, total tax as apercentage of profit (World Bank doing Business Report or International InternetBandwidth [Bits per person]).2.3. Normalization and CalculationNormalizationAll the scores need to be added, averaged, or proportionately averaged; thus normalisationis necessary. Thus scores for the ‘Detailed Data Points’ are determined as follows:All rating scores in the range of zero to one, one to seven, or one to ten are normalisedproportionately to a range of one to ten across all the data. All scores used further arethus in the range of one to ten before the weightage specified in the detailed frame-work are applied.All data in the form of absolute values are normalised to a score by using the follow-ing formulaeScore = Score = 1+ ((LOG10 (Actual Value)-LOG10 (Min Value))/(LOG10 (Max Value)-LOG10 (Min Value)))*9CalculationThe calculations are done as follows:‘Lower Level Abstract’ Score = Weighted Average of contributing ‘Constructs’ Scores.‘Construct’ Scores = Weighted Average of contributing ‘Major Data Point’ Scores.•••••••••2. Methodology02_Africa_Report09_FR.indd Sec1:2502_Africa_Report09_FR.indd Sec1:25 2/26/09 12:14:13 PM2/26/09 12:14:13 PM
  37. 37. 26OUTSOURCINGTOAFRICA‘Major Data Point’ Scores = Average of contributing ‘Detailed Data Point’ Scores.‘Detailed Data Point’ Score = the normalised value of the score as per the rule andformulae given above.The overall ‘Outsourcing Attractiveness Index’ is determined by the following method:People and Skills(50%)BusinessEnvironment (50%)OutsourcingAttractivenessRankLower Level AbstractionDetailed FrameworkSource: CyberMedia, Global Services, CBCFigure 31: Detailed framework—outsourcing attractivenessOutsourcing Attractiveness IndexCountries are ranked within their bands based on theirBE + People & Skill ScoresCountries are ranked within their bands based on their:People & Skills ScoresplusBusiness Environment ScoresSource: CyberMedia, Global Services, CBCFigure 32: Components leading to outsourcing attractivenessA. Infrastructure BandsThe ‘Infrastructure’ lower level abstraction score is calculated as per the detailed frame-work and the normalisation and calculation method indicated above.The countries with an infrastructure score greater than 6.5 are placed in the ‘Ready’band.••••2. Methodology02_Africa_Report09_FR.indd Sec1:2602_Africa_Report09_FR.indd Sec1:26 2/26/09 12:14:13 PM2/26/09 12:14:13 PM
  38. 38. 27OUTSOURCINGTOAFRICAThe countries with an infrastructure score between 5.5 and 6.5 are placed in the‘Upcoming’ band.The countries with an infrastructure score less than 5.5 are placed in the ‘Yet to beready’ band.B. People & Skills and Business Environment ScoresThe ‘People and Skills’ lower level abstraction score is calculated as per the detailedframework and the normalisation and calculation method indicated above.The ‘Business Environment’ lower level abstraction score is calculated as per the detailedframework and the normalisation and calculation method indicated above.C. Overall Outsourcing Attractiveness Scores and RanksThe ‘Outsourcing Attractiveness’ score of the country is determined for countries ineach band. This is the sum of the ‘People and Skills’ score and ‘Business Environment’score.The rankings are made in each band using this total score.The following diagram shows this approach graphically.The ApproachPolitical Economic Social Technology People✓Attractiveness in terms of Outsourcing✓Characteristics of a countrySkill-setsBusiness Environment People & SkillsReady/UpcomingYet to be ReadyInfrastructureSource: CyberMedia, Global Services, CBCFigure 33: Detailed framework—outsourcing attractiveness••••••2. Methodology02_Africa_Report09_FR.indd Sec1:2702_Africa_Report09_FR.indd Sec1:27 2/26/09 12:14:13 PM2/26/09 12:14:13 PM
  39. 39. 28OUTSOURCINGTOAFRICA2.4. Definitions of Lower Level Abstraction, Constructs,and Major Data PointsLower-Level AbstractionInfrastructure: This ‘Infrastructure Ready/Upcoming/Yet to be ready Decision’ scoresare calculated on a separate scale and cover all the important parameters needed to set-up the facility for outsourcing work. This scale would judge the nation’s infrastructureon a scale denoted by Ready/Upcoming/Yet to be ready. These parameters includetwo major ‘Constructs’: Availability/Penetration and Cost.People and skills: This ‘Lower level abstraction’ covers the extent to which the humanresource needs of the outsourcing engagement are met by the country in terms ofnumber of personnel available, their suitability for outsourcing, and the cost of person-nel meeting these needs. There are three constructs: availability, suitability, and cost.Business environment: This has five constructs that cover various aspects of the businessenvironment that make a country favourable or otherwise to attract an outsourcingoperation.Constructs and Major Data PointsInfrastructureInfrastructureInfrastructure Cost (40%)Availability/Penetration (60%)Lower Level Abstraction ConstructsDetailed Framework—InfrastructureMajor Data PointsNetwork Readiness Index (33%)International Internet Bandwidth (34%)Electricity Availability (16%)Road/Rail Network, Air Travel (16%)Rental, Cost of Commercial Premises (25%)Cost of stay, Travel Cost (25%)Telecom/Data Transfer Cost (50%)Source: CyberMedia, Global Services, CBCFigure 34: Detailed framework—infrastructure readinessThe major data points come from a number of carefully selected detailed data points.•••2. Methodology02_Africa_Report09_FR.indd Sec1:2802_Africa_Report09_FR.indd Sec1:28 2/26/09 12:14:13 PM2/26/09 12:14:13 PM
  40. 40. 29OUTSOURCINGTOAFRICAInfrastructure—availability/penetration: This ‘Construct’ gives a score that covers thepenetration of IT communication network by using the ‘Network Readiness Index’, andavailability of other resources like Internet bandwidth, electricity, commercial space,railways, and air travel; the four ‘Major Data Points’ are as follows:Network readiness index: This ‘Major Data Point’ is based on a report produced bythe World Economic Forum in cooperation with INSEAD, published for the seventhconsecutive year with record coverage of 127 economies worldwide, the report hasbecome the world’s most comprehensive and authoritative international assessmentof the impact of ICT on the development process and the competitiveness of nations.This index is a standard measure of the availability and penetration of ICT infra-structure in a country. This is updated annually. In this case no separate detaileddata parameters will be considered as this ‘Network Readiness Index’ will be takenas it is (33 per cent weightage).International Internet bandwidth: This ‘Major Data Point’ is based on World Develop-ment Indicators produced by the World Bank. This is indication of availability of Inter-national Internet Bandwidth in mbps in each country (34 per cent weightage).Electricity availability: This ‘Major Data Point’ is based on ‘Detailed Data Parameters’like electricity production, consumption and import. (5 per cent weightage).Road/Rail/Air travel: This ‘Major Data Point’ is based on few ‘Detailed Data Param-eters’ like number of major railway stations, length of rail network (in km), lengthof road network (in km); number of major airports, connectivity with major citiesof the world, frequency of flights, etc. (16 per cent weightage).Infrastructure cost (40 per cent weightage): This ‘Construct’ will give us a score thatincludes the entire infrastructure cost incurred by business to acquire infrastructureresources, i.e., Communication, Electricity, Transportation, Railways, Air-Travel, etc.The three ‘major data points’ are as follows:Rental and cost commercial premises: This ‘major data point’ is based on ‘DetailedData Parameters’ that is used in calculating overall cost of rental (per sq. ft.) andcost of ownership of premises for commercial activity (25 per cent weightage).Cost of stay and travel: This ‘Major Data Point’ is based on ‘Detailed Data Parameters’that helps calculating the cost of stay for the expatriate executive; it includes boardand lodging charges and travel costs to major countries where the outsourcingmarket exists (25 per cent weightage).Telecom/Internet service cost: This ‘Major Data Point’ is based on ‘Detailed DataParameters’ like call charges (mobile/landline) to major world cities, Internet/datatransfer tariff per month, etc. (50 per cent weightage).•••••••••2. Methodology02_Africa_Report09_FR.indd Sec1:2902_Africa_Report09_FR.indd Sec1:29 2/26/09 12:14:14 PM2/26/09 12:14:14 PM
  41. 41. 30OUTSOURCINGTOAFRICAPeople and SkillsH R Cost (30%)People and SkillsAvailability (40%)Suitability (30%)Quantity (75%)Working Satisfaction (25%)ICT Exposure (53%)Education, Languages, and Domain Skills (33%)Quality (14%)Personnel Compensation at Various Levels (66%)Cost of Living (34%)Detailed Framework—People and SkillsLower Level Abstraction Constructs Major Data PointsSource: CyberMedia, Global Services, CBCFigure 35: Detailed framework—merit of people and skillsPeople and skills—availability: This ‘Construct’ gives a score that gives us an idea ofthe quantity of personnel available along with the attrition rates of available person-nel leaving; this will give a score to assess the availability of personnel in the country.(40 per cent weightage). The two ‘Major Data Points’ thus are as follows:Quantity: This ‘Major Data Point’ is based on a number of ‘detailed data parameters’like population, education, qualified personnel available, ease of meeting shortfalls byexpatriate employment, unemployment rate, and so on (75 per cent weightage).Working satisfaction: This major data point is derived from the UNDP human develp-ment report 2008. This HDI Index, a number from 0 to 1, indicates the overallsatisfaction in working in that country. (See Table B of section 2.5, S. No. 9 tounderstand it better.)People and skills suitability: This ‘Construct’ gives a score that gives us an idea of thecompatibility of personnel to the outsourcing work, based on quality of personnel, theirlanguage skills, and exposure to the cultures of other countries that are the outsourcedservice markets, (30 per cent weightage). The four ‘Major Data Points’ are as follows:ICT exposure: This ‘Major Data Point’ will give an idea of the familiarity that thepeople or the available work force has to ICT. Detailed data parameters like densityof PCs, mobile phones, Internet, etc., among the people will be used to assess thisfactor (53 per cent weightage).Education, languages, and domain skills: This ‘Major Data Point’ is based on a few‘detailed data parameters’ like knowledge of European languages, management, andICT/domain skills relevant to outsourcing operations. The level of accreditation••••••2. Methodology02_Africa_Report09_FR.indd Sec1:3002_Africa_Report09_FR.indd Sec1:30 2/26/09 12:14:14 PM2/26/09 12:14:14 PM
  42. 42. 31OUTSOURCINGTOAFRICAof these skills and qualifications to international standards will also be considered(33 per cent weightage).Quality: This ‘Major Data Point’ is based on a few ‘detailed data parameters’ likethe attitude of people towards work, health conditions affecting efficient operations,and related issues (14 per cent weightage).People and skills—HR cost: This ‘Construct’ gives a score that gives us an idea of thecost of personnel doing the outsourcing work (30 per cent weightage). The two ‘MajorData Points’ are as follows:Compensation at various levels: This ‘Major Data Point’ is based on a few ‘detaileddata parameters’ like the cost of a fresh graduate, cost of a professional with fiveyears’ experience, average cost of all other personnel, and related parameters(66 per cent weightage).Consumer price index: This ‘Major Data Point’ is based on a few ‘detailed dataparameters’ like the cost of living index, cost of medical insurance, cost of children’seducation, and similar factors (34 per cent weightage).Business EnvironmentBusinessEnvironmentBusiness Environment Index (10%)ICT Industry Attractiveness (20%)Economic Outlook (20%)Risk Parameter (30%)Tax & Financial Incentives (20%)Lower Level Abstraction ConstructsDetailed Framework–Business EnvironmentSource: CyberMedia, Global Services, CBCFigure 36: Detailed framework—merit of business environment••••2. Methodology02_Africa_Report09_FR.indd Sec1:3102_Africa_Report09_FR.indd Sec1:31 2/26/09 12:14:14 PM2/26/09 12:14:14 PM
  43. 43. 32OUTSOURCINGTOAFRICAICT IndustryAttractiveness (20%)Economic Outlook(20%)Business EnvironmentIndex (10%)Ease of Doing Business (100%)ICT Security, Cyber Laws ans IPR (66%)Exports and Share of ICT (34%)Share of Services in GDP, Size and Growth, Inflation (40%)Share of Exports, Share of Services in Exports (40%)Foreign Exchange/Gold Reserves (20%)Constructs Major Data PointsDetailed Framework—Business EnvironmentSource: CyberMedia, Global Services, CBCFigure 37: Detailed framework—components of business environmentRisk Parameter (30%)Tax & Financial Incentive (20%)Geopolitical Risk (33%)Currency Risk (33%)Legislative Risk (34%)Tax Rate (50%)Ease & Cost of Finance (50%)Constructs Major Data PointsDetailed Framework—Business EnvironmentSource: CyberMedia, Global Services, CBCFigure 38: Detailed framework—components of business environmentBusiness Environment—business environment index: This ‘Construct’ will give us ascore that covers all the important parameters needed for positive business environ-ment of a nation. This data will be taken from the World Bank ‘Ease of Doing Business’research that examines a number of factors like starting a business, licences, employingworkers, property, taxes, credit, protecting investors, enforcing contracts, trading acrossborders, and closing a business (10 per cent weightage).Business Environment—ICT industry attractiveness: This ‘Construct’ will give us a scorethat covers all the important parameters needed for ICT Industry Attractiveness of anation (20per cent weightage). It includes the following ‘Major Data Points’:••2. Methodology02_Africa_Report09_FR.indd Sec1:3202_Africa_Report09_FR.indd Sec1:32 2/26/09 12:14:14 PM2/26/09 12:14:14 PM
  44. 44. 33OUTSOURCINGTOAFRICASecurity/IPR law: This ‘major data point’ will be based on ‘Detailed Data Param-eters’ like IPR laws, Cyber laws, etc. (66 per cent weightage).Export and share of ICT industry: This ‘major data point’ will be based on ‘DetailedData Parameters’ that helps us estimate the ICT industry size of a nation. It will alsocover factors like total export/import of services, telecommunication revenue, etc.(34 per cent weightage).Business Environment—economic outlook: This ‘Construct’ will give us a score thatcovers all the important parameters needed to define Economic Outlook of a nation(20 per cent weightage). It includes the following ‘Major Data Points’:Percentage of services of GDP, size and growth and inflation: This ‘Major Data Point’will be based on ‘Detailed Data Parameters’ like Total GDP, percentage of share ofServices, increase of GDP, and Economic Growth, Inflation of a nation (40 per centweightage).Percentage share of exports and share of services: This ‘major data point’ is basedon ‘Detailed Data Parameters’ like percentage of Exports in overall economy of anation (40 per cent weightage).Foreign exchange/gold reserves: This ‘major data point’ is based on ‘DetailedData Parameters’ like foreign exchange/gold reserves of a nation, etc. (20 per centweightage).Business Environment—risk parameters: This ‘Construct’ gives us a score that cov-ers all the important risk parameters needed to define the risk to operate a business(30 per cent weightage). It includes the following ‘Major Data Points’:Geo-political risk: Political risk, also known as ‘geopolitical risk’—the risk that aninvestment’s returns could suffer as a result of political changes or instability in acountry. This ‘major data point’ is based on instability affecting investment returnscould stem from a ‘Detailed Data Parameters’ like change in government, otherforeign policy makers, or military control, factors in enforcement of contracts, etc.(33 per cent weightage).Currency risk: The risk that a business’ operations or an investment’s value is affectedby changes in exchange rates. This ‘major data point’ is based on ‘Detailed DataParameters’ like rate of currency fluctuation, changes in the value of the currencyrelative to the American dollar, total loss or gain on the investment when the moneyis converted back, etc. (33 per cent weightage).Legislative risk: The risk that a new law or a change in an existing law, cost, andefforts in the enforcement of a contract could have a significant impact on an invest-ment. This ‘Major Data Point’ is based on ‘Detailed Data Parameters’ like stability inlegislative reform, judicial independence, etc. (34 per cent weightage).Business Environment Tax and Financial Incentive (20 per cent weightage): This ‘Con-struct’ gives us a score that covers the entire imperative parameters needed to computethe financial depth of a nation. It includes the following ‘Major Data Points’:Tax rate (per cent of profit): This ‘Major Data Point’ is based on ‘Detailed DataParameters’ like corporate tax rates, VAT, property tax, stamp duty on advertisements,••••••••••••2. Methodology02_Africa_Report09_FR.indd Sec1:3302_Africa_Report09_FR.indd Sec1:33 2/26/09 12:14:15 PM2/26/09 12:14:15 PM
  45. 45. 34OUTSOURCINGTOAFRICAtax on insurance premiums, social security contributions, tax concessions for IT-enabled services exports, etc. (50 per cent weightage).Ease and cost of finance: This ‘Major Data Point’ will be based on ‘Detailed DataParameters’ like bank interest on finances necessary for setting up outsourced serviceindustry, Financial market sophistication, extent, and effect of taxation, etc. (50 percent weightage).2.5. Definitions of Data Parameters, Units of Measurements,and SourceTable A. Infrastructure Data PointsS. No. Detailed Data Parameter and Units SourceAvailability/PenetrationNetwork readiness1 Network Readiness Index (Score from one toseven)WEF Global ITInternational Internet bandwidth2 International Internet Bandwidth(Bits/Person)WDIElectricity availability3 Electricity Consumption (Bn KWH) CIA Fact Sheet4 Electricity Production (Bn KWH) CIA Fact Sheet5 Electricity Import (Bn KWH) CIA Fact Sheet6 Quality of electricity supply WEFRoad/Rail network, air travel7 Quality of railroad infrastructure (Score from oneto seven)Global Competitiveness Report2008, WEF8 Quality of roads (Score from one to seven) Global Competitiveness Report2008, WEF9 Quality of air transport infrastructure (Score fromone to seven)Global Competitiveness Report2008, WEFInfrastructureCostRental, cost of commercial premises10 Average rent per month (USD/sq. meter) Africa Property Research Report2007: Knight Frank11 Average cost of Commercial space (USD/sq. meter) Africa Property Research Report2007: Knight FrankCost of stay & travel12 Hotel tariff (USD) UN Travel Allowance13 Other Charges (USD) UN Travel Allowance14 Cost of Air Travel (USD) (London—Nearest Int.Airport)Prevailing Ticket RateTelecom/Data transfer cost15 Call rate for US (USD/3 min) World Bank16 Internet Service Cost/Month (USD) World Bank•2. Methodology02_Africa_Report09_FR.indd Sec1:3402_Africa_Report09_FR.indd Sec1:34 2/26/09 12:14:15 PM2/26/09 12:14:15 PM
  46. 46. 35OUTSOURCINGTOAFRICATable B. People and Skills Data PointsS. No. Detailed Data Parameter SourceAvailabilityTotal scoreQuantity1 Total population (in Millions) UNDP HDR 20082 Population in urban areas/100 UNDP HDR 20083 Population over 15 yrs./100 UNDP HDR 20084 Adult literacy/100 UNDP HDR 20085 Population educated at school/100 UNDP HDR 20086 Population educated at tertiary/100 UNDP HDR 20087 Availability of educated at science & engineeringgraduates (Score from one to seven)WEF Global IT8 Population unemployed (% of labour force) UNDP HDR 2008Working satisfaction9 Overall satisfaction in working in that country (HDIIndex from zero to one)UNDP HDR 2008 (HDI*100)SuitabilityICT exposure10 Proportion of households with a computer (%) World Bank Indicators11 Internet Users/1000 UNDP HDR 200812 Landline/1000 UNDP HDR 200813 Mobile/1000 UNDP HDR 200814 Internet Access in Schools WEF Global ITEducation, languages, and domain skills15 Quality of Scientific Institution (Score from one toseven)WEF Global IT16 Quality of Education System (Score from one toseven)WEF Global IT17 Extent Staff Training (Score from one to seven) WEF Global IT18 Quality of Math’s & Science education (Score fromone to seven)WEF Global IT19 Quality of Management Schools (Score from one toseven)WEF Global IT20 University - Industry research collaboration (Scorefrom one to seven)WEF Global ITQuality21 Business Impact of HIV (Score from one to seven) Global Competitiveness Report2008, WEF22 Business Impact of TB (Score from one to seven) Global Competitiveness Report2008, WEF23 Business Impact of Malaria (Score from one toseven)Global Competitiveness Report2008, WEF2. Methodology02_Africa_Report09_FR.indd Sec1:3502_Africa_Report09_FR.indd Sec1:35 2/26/09 12:14:15 PM2/26/09 12:14:15 PM
  47. 47. 36OUTSOURCINGTOAFRICAS. No. Detailed Data Parameter SourceHRCostPersonnel compensation at various levels24 Cost of fresh graduate Agent (USD per yr) Local UN Salary Rates25 Cost of experienced Agent Local UN Salary Rates26 Cost of Executives Local UN Salary Rates27 Cost of Manager Local UN Salary RatesCost of living28 Consumer price index (2000=100) WDITable C. Business Environment Data PointsS. No. Detailed Data Parameter SourceBEIndexEase of doing business1 No. of procedures to start a business Global Competitiveness ReportWEF 20082 Protecting Investors (Score from one to ten) Doing Business3 Corruption Perception Index (zero least desirableto ten most desirable)Africa Development Indicators,World BankICTIndustryAttractivenessICT security, Cyber laws and protection ofintellectual property rights4 Laws Related to ICT (Score from one to seven) WEF Global IT5 Intellectual Property Protection (Score from one toseven)WEF Global IT6 Accessibility of digital content (Score from one toseven)WEF Global ITExports and share of ICT7 Computer, Communication, and other services(% of commercial service imports)WDI8 Computer, Communication, and other services(% of commercial service exports)WDI9 Telecommunication Revenue (% of GDP) WDIEconomicOutlookShare of services in GDP, economy sizeand growth, inflation10 Total GDP (USD Bn) UNDP HDR 200811 Share of Services in GDP CIA Fact Book12 GDP per capita (USD) UNDP HDR 200813 GDP growth rate UNDP HDR 200814 Inflation Rate CIA Fact BookShare of exports, share of services in exports15 Exports (USD Bn) CIA Fact Book16 Share of export in GDP (% of GDP) UNDP HDR 200817 Total export of services (% of Export) CIA Fact BookForeign exchange/gold reserves18 Foreign exchange/gold reserves (USD Bn) CIA Fact Book2. Methodology02_Africa_Report09_FR.indd Sec1:3602_Africa_Report09_FR.indd Sec1:36 2/26/09 12:14:15 PM2/26/09 12:14:15 PM
  48. 48. 37OUTSOURCINGTOAFRICAGLOSSARYCost of Living This measure will give an estimate of the overall cost of living for thecountry taking the cost of living index, expenses on children’s education, medical insurancecosts, and so on.Cost of Stay and Travel The cost of stay and of travel to the outsourcing facility in thehost country/city from the major world cities for the expatriate executive; it includes board-ing and lodging charges.Cultural Exposure A score or rating that will give an idea of the exposure of the availablework force to the cultures of European and Western countries where the outsource servicemarket exists.Detailed Data Parameter The parameters measured and used by Global InformationTechnology Report produced by WEF would be used as such.Ease and Cost of Finance It provides a measure of ease of availability of finance andeasy tax rates.Education, Languages, and Domain Skills A score or rating that will give an idea of thereadiness of the work force to language, ICT, and other skills to make an outsource opera-tion successful.Electricity Cost The cost of electricity for the commercial establishment.Foreign exchange/Gold Reserves It gives us a measure of stability of the government bycomputing the debt and foreign exchange/gold reserves of a nation.Geopolitical Risk It gives measure of geopolitical risk that could cause an instability affect-ing the investment returns.Human Development Index A score or rating that will give an idea of the number ofpersonnel at various levels that leave an organisation for better prospects or better livingconditions after gaining experience and contacts in an outsourcing assignment.ICT Exposure A score or rating that will give an idea of the exposure of the PC, Internet,and mobile connectivity to the people and work force available in the country.ICT Industry Size This score will be an estimate of the ICT Industry size of a nation,Import/export of ICT services, and telecommunication revenue.ICT Security, Cyber Laws and Protection of Intellectual Property Rights This scorewill give an estimate of the trust that can be placed on transactions and interactions overICT and cyber space. It relates to enactment implementation, enforcement, and executionof Cyber, IPR, and related Laws.02_Africa_Report09_FR.indd Sec1:3702_Africa_Report09_FR.indd Sec1:37 2/26/09 12:14:15 PM2/26/09 12:14:15 PM
  49. 49. 38OUTSOURCINGTOAFRICAInternational Internet Bandwidth A standard measure of availability International Inter-net Bandwidth (in mbps) throughout the country prepared annually by the World Develop-ment Indicators by World Bank.Legislative Risk It provides a measure of how frequently law changes to the extent thatbusiness and investors are affected by it.Network Readiness Index A standard measure of availability and penetration of ICTInfrastructure throughout the country prepared annually by the World Economic Forum(WEF) Report (The Global Information Technology Report 2006–07).Personnel Compensation at Various Levels Direct cost to the outsourcing business forthe personnel recruited for this purpose.Quality Attitude of people towards work, health conditions affecting efficient operationsand related issues.Quantity A score or rating that will give an idea of the number of personnel at variouslevels who will be available for an organisation wishing to start outsource operations in thecountry .Rental, Cost of Commercial Premises A month’s cost to take a commercial space (in sq.feet) on rent for business activity.Share of Exports in GDP, Share of Services in Exports It is measure of share of exportsin total GDP and percentage share of services in the total export by a nation.Share of Services in GDP, Economy Size and Growth, Inflation It denotes the percent-age share of services in total GDP, the total size of economy, GDP of the country.Telecom/Internet Service Cost The cost of data transfer and call rate from the Africannation to the Europe, Americas, and Australia.Glossary02_Africa_Report09_FR.indd Sec1:3802_Africa_Report09_FR.indd Sec1:38 2/26/09 12:14:15 PM2/26/09 12:14:15 PM
  50. 50. OUTSOURCINGTOAFRICAAPPENDICESAppendix I: Infrastructure Data TableAppendix II: People and Skills Data TableAppendix III: Business Environment Data TableAppendix IV: Fifteen Africa Country Profiles02_Africa_Report09_FR.indd Sec1:3902_Africa_Report09_FR.indd Sec1:39 2/26/09 12:14:15 PM2/26/09 12:14:15 PM
  51. 51. Availability/PenerationNetworkReadiness1NetworkReadinessIndex(Scorefrom1to7)WEFGlobalIT3.594.053.743.493.343.963.672.823.333.323.463.174.333.063.02InternationalInternetBandwidth2InternationalInternetBandwidth(Bits/Person)WDI161912692115337711811030.01126411ElectricityAvailability3ElectricityConsumption(BnKWH)CIAFactSheet2.6241926.94.4220.679.12.816.881.81.1911.171.67864ElectricityProduction(BnKWH)CIAFactSheet0.9126411775.52.3521.3713.171.6822.52.151.8812.851.988.855ElectricityImport(BnKWH)CIAFactSheet1.7511.320.1680.4610.280.010.8029.51.560.010.010.1360.010.010.4656QualityofelectricitysupplyWEF3.85.95.14.14.75.44.83.55.14.24.83.55.83.33.7Road/RailNetwork,AirTravel7Qualityofrailroadinfrastructure(Scorefrom1to7)GlobalCompetitivenessReport2008,WEF3.63.531.32.31.63.21.84.31.41.71.84.41.51.78Qualityofroads(Scorefrom1to7)GlobalCompetitivenessReport2008,WEF4.54.83.43.42.84.53.625.42.33.22.54.92.52.59Qualityofairtransportinfrastructure(Scorefrom1to7)GlobalCompetitivenessReport2008,WEF4.53.45.23.23.75.45.23.751.62.52.35.81.92.9S.No.DetailedData Parameter andUnitsSourceBotswanaSouthAfricaGhanaEgyptMauritiusKenyaMoroccoMozambiqueNamibiaNigeriaSenegalTanzaniaTunisiaUgandaZambiaAPPENDIXIINFRASTRUCTUREDATATABLE02_Africa_Report09_FR.indd Sec1:4002_Africa_Report09_FR.indd Sec1:40 2/26/09 12:14:15 PM2/26/09 12:14:15 PM
  52. 52. InfrastructureCostRental,CostofCommercialPremises10Averagerentpermonth(USD/sq.metre)AfricaPropertyResearchReport2007:KnightFrank14162514101520121525201912161911AveragecostofCommercialspace(USD/sq.metre)AfricaPropertyResearchReport2007:KnightFrank7008001250700500750100060075012501000950600800950CostofStay&Travel12Hoteltariff(USD)UNTravelAllowance111147147.994156158158891351481561419419615613OtherCharges(USD)UNTravelAllowance6170107.15386979787211221136990688414CostofAirTravel(USD)(London—NearestInt.Airport)PrevailingTicketRate3971372119413450346828599134471447137212260361096338744471Telecom/DataTransferCost15CallrateforUS(USD/3min)WorldBank2.880.791.451.9931.591.691.1751.4913.1723.211.4116InternetServiceCost/Month(USD)WorldBank18.211.651215.816.22732.948.711.325.8363.199.633.302_Africa_Report09_FR.indd Sec1:4102_Africa_Report09_FR.indd Sec1:41 2/26/09 12:14:16 PM2/26/09 12:14:16 PM
  53. 53. AvailabilityTotalScoreQuantity1Totalpopulation(inmillions)UNDPHDR20081.8047.9072.8022.5035.601.2630.5020.502.00141.4011.8038.5010.1028.9011.502Populationinurbanareas/100UNDPHDR200857.4059.3042.8047.8020.7042.4058.7034.5035.1048.2041.6024.2065.3012.6035.003Populationover15years/100UNDPHDR200864.4067.9066.7041.0057.4076.7069.7055.8060.9055.7057.8055.6074.0050.6054.304Adultliteracy/100UNDPHDR200881.2082.4071.4057.9073.6084.3052.3038.7085.0069.1039.3069.4074.3066.8068.005Populationeducatedatschool/100UNDPHDR200860.0062.0082.0037.0042.0082.0035.007.0039.0027.0017.001.3965.0015.0026.006Populationeducatedattertiary/100UNDPHDR200817.0020.0035.0026.0029.0026.0021.0024.006.1110.185.4024.0031.0010.002.337Availabilityofeducatedatscience&engineeringgraduates(Scorefrom1to7)WEFGlobalIT3.333.625.003.793.484.574.893.082.694.174.304.005.654.053.988Populationunemployed(%oflabourforce)UNDPHDR200823.8026.6011.0011.0040.009.6011.0021.0033.804.9048.005.1014.203.2012.00WorkingSatisfaction9Overallsatisfactioninworkinginthatcountry(HDIIndexfrom0to1)UNDPHDR2008(HDI*100)0.6540.6740.7080.5530.5210.8040.6460.3840.650.470.4990.4670.7660.5050.434SuitabilityICTExposure10Proportionofhouseholdswithacomputer(%)WorldBankIndicators68.5140.61.424.22.51.412.30.82.196.31.71.111InternetUsers/1000UNDPHDR20083410916118321461527403846995172012Landline/1000UNDPHDR2008751011571582894446492341253813Mobile/1000UNDPHDR20084667245301291357344116224414114852566538114InternetAccessinSchoolsWEFGlobalIT2.793.013.072.43.442.073.492.072.742.52.92.334.852.121.81S.No.DetailedData ParameterSourceBotswanaSouthAfricaGhanaEgyptMauritiusKenyaMoroccoMozambiqueNamibiaNigeriaSenegalTanzaniaTunisiaUgandaZambiaAPPENDIXIIPEOPLEANDSKILLSDATATABLE02_Africa_Report09_FR.indd Sec1:4202_Africa_Report09_FR.indd Sec1:42 2/26/09 12:14:16 PM2/26/09 12:14:16 PM
  54. 54. SuitabilityEducation,Languages,andDomainSkills15QualityofScientificInstitution(Scorefrom1to7)WEFGlobalIT3.774.73.43.593.744.573.583.093.013.953.94.124.414.293.3216QualityofEducationSystem(Scorefrom1to7)WEFGlobalIT3.782.842.313.13.84.423.082.632.583.473.333.225.253.433.6817ExtentStaffTraining(Scorefrom1to7)WEFGlobalIT3.765.023.543.484.683.93.623.373.893.62.983.354.563.542.5118QualityofMaths&Scienceeducation(Scorefrom1to7)WEFGlobalIT3.782.353.063.284.23.94.622.812.523.173.852.935.623.083.3819QualityofManagementSchools(Scorefrom1to7)WEFGlobalIT3.395.243.493.83.624.064.742.692.53.644.643.225.373.43.5720University-Industryresearchcollaboration(Scorefrom1to7)WEFGlobalIT2.814.22.822.82.93.43.032.612.713.092.823.213.873.212.46Quality21BusinessImpactofHIV(Scorefrom1to7)GlobalCompetitivenessReport2008,WEF2.62.2643.55.44.82.3354.93.16.22.82.522BusinessImpactofTB(Scorefrom1to7)GlobalCompetitivenessReport2008,WEF3.93.664.44.36.553.14.25.14.93.86.43.83.323BusinessImpactofMalaria(Scorefrom1to7)GlobalCompetitivenessReport2008,WEF4.85.46.53.24.36.65.52.64.84.54.63.36.62.93.4HRCostPersonnelCompensationatVariousLevels24CostoffreshgraduateAgent(USDperyr)LocalUNSalaryRates91431140010000450095508862117571227210500142001050491001175060001211325CostofexperiencedAgentLocalUNSalaryRates117001350012500600012893116501457515463125002900012721106001390080001466026CostofExecutivesLocalUNSalaryRates1480016300155007200159871537318083194831480035700156301230016800105001836027CostofManagerLocalUNSalaryRates186711970019391150001990720428221412499017640438001924014230203001500023180CostofLiving28Consumerpriceindex(2000=100)WDI17414415127818315311321412823711613612313930302_Africa_Report09_FR.indd Sec1:4302_Africa_Report09_FR.indd Sec1:43 2/26/09 12:14:16 PM2/26/09 12:14:16 PM
  55. 55. APPENDIXIIIBUSINESSENVIRONMENTDATATABLEBEIndexEaseofDoingBusiness1No.ofprocedurestostartabusinessGlobalCompetitivenessReportWEF20081187111266101091012101962ProtectingInvestors(Scorefrom1to10)DoingBusiness685.3657.7365.35.7353.745.33CorruptionPerceptionIndex(0leastdesirable-10mostdesirable)AfricaDevelopmentIndicators,WorldBank5.64.63.33.32.25.13.22.84.12.23.32.94.62.72.6ICTIndustryAttractivenessICTSecurity,CyberLawsandProtectionofIntellectualPropertyRights4LawsRelatedtoICT(Scorefrom1to7)WEFGlobalIT2.994.753.293.394.233.343.192.563.093.43.173.124.62.972.865IntellectualPropertyProtection(Scorefrom1to7)WEFGlobalIT3.115.23.513.494.133.013.852.64.12.943.193.214.632.692.726Accessibilityofdigitalcontent(Scorefrom1to7)WEFGlobalIT3.514.784.6344.643.524.63.673.363.714.883.74.873.633.6ExportsandShareofICT7Computer,Communication,andotherservices(%ofcommercialserviceimports)WDI2524292020292936316426172130398Computer,Communication,andotherservices(%ofcommercialserviceexports)WDI172316171516193048247111323169TelecommunicationRevenue(%ofGDP)WDI384244515392433S.No.DetailedData ParameterSourceBotswanaSouthAfricaGhanaEgyptMauritiusKenyaMoroccoMozambiqueNamibiaNigeriaSenegalTanzaniaTunisiaUgandaZambia02_Africa_Report09_FR.indd Sec1:4402_Africa_Report09_FR.indd Sec1:44 2/26/09 12:14:16 PM2/26/09 12:14:16 PM
  56. 56. EconomicOutlookShareofServicesinGDP,EconomySizeandGrowth,Inflation10TotalGDP(USDBn)UNDPHDR200826239.589.410.718.714.2751.66.66.62068.212.128.78.77.311ShareofServicesinGDPCIAFactBook4670483760705646.95829.8613762.81356.512GDPpercapita(USD)UNDPHDR20085846510917394855475957171133530162100707316286030362313GDPgrowthrateUNDPHDR20084.84.9720.15.41.54.32.90.81.21.76.33.20.314InflationRateCIAFactBook7.13.99.5129.78.8212.56.75.45.973.16.110.6ShareofExports,ShareofServicesinExports15Exports(USDBn)CIAFactBook5.579.1940.384.24.14.412.750.2382.9261.791.652.2215.151.684.5916ShareofexportinGDP(%ofGDP)UNDPHDR200851273013.5275736414653271748131617Totalexportofservices(%ofExport)CIAFactBook14.815.8572638.842.24112.215.68.827.843.84.431.27.2Foreignexchange/GoldReserves18Foreignexchange/goldreserves(USDBn)CIAFactBook9.7932.9831.372.23.353.124.721.40.8951.331.662.917.852.561.09RiskParameterGeo-PoliticalRisk19TransparencyofGovernmentpolicymakers(Scorefrom1to7)GlobalCompetitivenessReportWEF20084.64.94.13.94.14.94.43.84.34.23.245.23.94.720Reliabilityofpoliceservices(Scorefrom1to7)GlobalCompetitivenessReportWEF20084.73.14.73.83.84.34.82.842.85.14.35.83.74.1CurrencyRisk21CurrencyfluctuationrateCyberMediaResearch15.2216.181.5210.845.223.783.255.8415.815.284.015.652.236.6010.46LegislativeRisk22Judicialindependence(Scorefrom1to7)GlobalCompetitivenessReportWEF20085.35.253.8353.93.15.54.32.63.953.33.523Efficiencyoflegalframework(Scorefrom1to7)GlobalCompetitivenessReportWEF20084.85.434.174.33.084.674.032.84.443.292.783.665.153.273.7524Burdenofgovt.regulation(Scorefrom1to7)GlobalCompetitivenessReportWEF20083.082.683.173.22.993.083.462.872.983.332.643.594.443.553.98Tax&FinancialIncentiveTaxRate25TotalTaxRate(%ofProfit)WDIWorldBank17.227.147.932.950.921.753.134.326.529.94644.36132.316.1Ease&CostofFinance26FinancialmarketSophistication(Scorefrom1to7)GlobalCompetitivenessReportWEF20084.0163.443.744.134.433.742.464.323.673.042.954.482.73.0127Restrictiononcapitalflow(Scorefrom1to7)GlobalCompetitivenessReportWEF20085.73.74.44.24.46.23.62.83.94.14.14.34.45.15.628Extentandeffectoftaxation(Scorefrom1to7)GlobalCompetitivenessReportWEF20084.94.54.13.72.85.43.53.13.743.23.44.72.82.829Strengthofinvestorprotection(HardData0-10(best)scale)GlobalCompetitivenessReportWEF20084.385657.7365.35.7353.345.3Exchangerate(1USD)CIAFactBook7.949.785.581.1768328.3524.259.78117.751613001.272000470502_Africa_Report09_FR.indd Sec1:4502_Africa_Report09_FR.indd Sec1:45 2/26/09 12:14:17 PM2/26/09 12:14:17 PM
  57. 57. 02_Africa_Report09_FR.indd Sec1:4602_Africa_Report09_FR.indd Sec1:46 2/26/09 12:14:17 PM2/26/09 12:14:17 PM
  58. 58. 47Here’s the flow for each one of the fifteen countries:1. Country Overview2. Country Outsourcing Attractiveness Profile3. Country Political and Economic Profile4. Principal Government Officials5. Foreign Relations6. Living, Security, and Safety Perceptions7. ICT Policy, ICT Infrastructure, and Service8. ICT and BPO Industry Environment9. Human Resource Efficiency and Cost10. Legal and Enforcement Issues11. Labour and Expatriate Worker’s Permits12. Revenue, Tax, and Repatriation Issues13. Investment Policy and Incentives14. Government Agencies Giving Support to Outsourcing15. Recommendations16. Contact DetailsOUTSOURCINGTOAFRICAAPPENDIX IVFIFTEEN AFRICA COUNTRY PROFILES02_Africa_Report09_FR.indd Sec1:4702_Africa_Report09_FR.indd Sec1:47 2/26/09 12:14:17 PM2/26/09 12:14:17 PM
  59. 59. 02_Africa_Report09_FR.indd Sec1:4802_Africa_Report09_FR.indd Sec1:48 2/26/09 12:14:17 PM2/26/09 12:14:17 PM
  60. 60. 49OUTSOURCINGTOAFRICACountry Report for EgyptDisclaimerThis short country report, a result of a larger survey of ICT outsourcing in Africa, provides a general over-view of the current activities and issues related to ICT outsourcing in the country.The data presented hereshould be regarded as illustrative rather than exhaustive. ICT outsourcing is at a particularly dynamic stagein Africa with new developments and announcements happening on a daily basis somewhere or the otheron the continent.Therefore, these reports should be seen as ‘snapshots’ that were current at the time theywere taken; it is expected that certain facts and figures presented may become outdated very quickly.The findings, interpretations, and conclusions expressed herein are a faithful representation of the respondentsof the interviews and secondary data collected from the countries and published literature. Strict analysishas been carried out with the minimal influence of the authors/team members. References to data sourceshave been made as far as possible. In the case of the detailed data parameters used for scores and rankingthe same data source and timeline has been used for all the fifteen countries compared. In the descriptivesection of the country reports, all data received from the individual country have been used in order to giveas complete an assessment as possible. Thus those countries that have provided more information have abetter coverage than those who have not been able to provide data to the research team.Board of Executive Directors of CBC or Cyber Media cannot guarantee the accuracy of the data includedin this work. The boundaries, colours, denominations, and other information shown on any map in thiswork do not imply on the part of the CBC and Cyber Media any judgement of the legal status of anyterritory or the endorsement or acceptance of such boundaries.It is expected that individual country reports from the survey of ICT outsourcing in Africa will be updatedin an iterative process over time on the basis of additional research and feedback received through CBCand Cyber Media website.LIBYAMediterranean SeaWest BankGaza StripDeadSeaBanï SuwayfAl MinyãAsyutAl KharijahLakeNasserCAIROAlGhardaqahBurSafãjahSharmashShaykhRedSeaSAUDIARABIASuezCanalSuezSinaiNileLuxorAswanHalaibTriangleMarsáMatruhS wahAlexandriaDamietta Port SaidISRAELJORDANS U D A NTantaAl J zah0 100 200 km0 100 200 mi‚ ‚ ‚ ‚¯¯1¯1¯¯ ¯¯´03_Africa_Report09_Egypt.indd 4903_Africa_Report09_Egypt.indd 49 2/25/09 4:18:17 PM2/25/09 4:18:17 PM
  61. 61. 50Country Report for EgyptOUTSOURCINGTOAFRICA1. OverviewEgypt is located in Northern Africa, bordering the Mediterranean Sea, between Libya andthe Gaza Strip, and the Red Sea north of Sudan, and includes the Asian Sinai Peninsula.Egypt is the most populous country in the Arab world and the second-most populous on theAfrican Continent. Nearly all of the country’s 79 million people live in Cairo and Alexandria;elsewhere on the banks of the Nile; in the Nile delta, which fans out north of Cairo; andalong the Suez Canal. These regions are among the world’s most densely populated, con-taining an average of over 3,820 persons per square mile (1,540 per sq km), as comparedto 181 persons per sq mi for the country as a whole.Egypt borders the Mediterranean Sea to the north, the Gaza Strip and Israel to the north-east, the Red Sea to the east, Sudan to the south, and Libya to the west.The great majority of its estimated 82 million live near the banks of the Nile River, in anarea of about 40,000 sq km (15,000 sq m), where the only arable agricultural land is found.The large areas of the Sahara Desert are sparsely inhabited. About half of Egypt’s residentslive in urban areas, with the majority spread across the densely populated centres of greaterCairo, Alexandria, and other major cities in the Nile Delta.Egypt is famous for its ancient civilisation and some of the world’s most famous monuments,including the Giza pyramid complex and its Great Sphinx. The southern city of Luxor con-tains numerous ancient artefacts, such as the Karnak Temple and the Valley of the Kings.Egypt is widely regarded as an important political and cultural nation of the Middle East.Egypt, sometimes referred to as the ‘Motherland of the World’ and the ‘Land of Civilisa-tions,’ is famous throughout the world for its ancient civilisation and 7,000-year history alongthe Nile River. It is an important political and cultural centre of the Middle East.2. Egypt’s Position in Africa’s Fifteen CountriesEgypt is the first in the ready band of countries from the outsourcing attractiveness point ofview. The map and table below show where Egypt is positioned among the fifteen studiedcountries.03_Africa_Report09_Egypt.indd 5003_Africa_Report09_Egypt.indd 50 2/25/09 4:18:17 PM2/25/09 4:18:17 PM
  62. 62. Country Report for Egypt51OUTSOURCINGTOAFRICAMorocco *MoroccoTunisia *Geographical Coverage and RankTunisiaEgypt *EgyptSenegal *SenegalGhanaGhanaNigeriaNigeriaUgandaUgandaKenyaKenyaTanzaniaTanzaniaZambiaZambiaMozambique MozambiqueBotswanaBotswanaNamibiaNamibiaSouthAfricaSouth AfricaMauritiusAfrica*Non-Commonwealth CountriesMauritiusContributing scores and ranks are as under.OverallBand Score (PS & BE) RankReady 7.18 FirstInfrastructureScore Rank Band6.8 3 ReadyWhile achieving the third position in score for ‘Infrastructure’, Egypt is second in electric-ity availability and telecommunications and data-transfer costs, fourth in network readiness,seventh in infrastructure cost, third in availability and penetration, and sixth in the roadsand rail network.People and Skills (PS)Score Rank3.620 1Egypt is the best in the case of ‘People and Skills,’ being first in quantity, second in quality, andthird in working satisfaction and ICT exposure; it has scored seven in human resource costs. Atthe other end it has fallen to thirteenth position in education, language, and domain skills.03_Africa_Report09_Egypt.indd 5103_Africa_Report09_Egypt.indd 51 2/25/09 4:18:18 PM2/25/09 4:18:18 PM

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