ETHIOPIAN OUTSOURCING ASSOCIATION How Ethiopia’s 5 Million Coders Initiative Can Drive Economic Growth and Job Creation Last July, Prime Minister Abiy Ahmed officially launched the 5 Million Ethiopian Coders Initiative, aligning with the national Digital Ethiopia 2025 strategy to bridge the digital skills gap. The initiative aims to provide digital technology training to five million citizens. While the initiative seeks to equip five million Ethiopians with digital skills, a crucial question remains: Where will these coders end up, and can the country absorb them into meaningful employment? The scale of the initiative raises significant concerns about job placement and economic integration. With over 110,000 students already enrolled and a potential reach of seven million, Ethiopia faces the challenge of creating sufficient employment opportunities for graduates. Currently, over 40% of graduates are unemployed. Although digital skills are expanding, job markets for these skills are not yet fully developed. To address this issue, the growth of the outsourcing sector becomes crucial. Outsourcing could provide numerous job opportunities for newly trained coders by leveraging Ethiopia’s competitive advantages, such as lower labor costs, skilled manpower, and a growing digital infrastructure. Expanding this sector could attract international companies seeking skilled and cost-effective labor, creating robust employment avenues for Ethiopian graduates of the coding initiative. The global job market is undergoing a significant shift driven by the internet. Statista reports that the global business process outsourcing (BPO) industry is valued at $390 billion in 2024 and is expected to grow to over $449 billion by 2029. India, with one of the largest BPO markets in the world, generated $245.5 billion in revenue and employed around 4.1 million people in 2023. Meanwhile, South Africa leads the African continent with a market size of $461 million, according to a report by McKinsey & Company. The remote work revolution is driven by a talent gap in meeting the increasing demands for skilled professionals in the Western world, with employers taking advantage of wage differences to hire talented individuals who can deliver comparable outcomes at lower costs. For Ethiopia to successfully integrate these coders into the workforce, public-private partnerships are essential. Collaboration between the government, the private sector, and organizations like the Ethiopia Outsourcing Association is key. The Ethiopian government should focus on improving the country’s image as a viable outsourcing destination, investing in infrastructure, ensuring a stable business environment, and providing incentives for companies to set up operations in Ethiopia. Meanwhile, the private sector and the Ethiopia Outsourcing Association must address market issues such as skill mismatches and infrastructure gaps, advocating for policies that support the growth of the outsourcing sector and create a hospitable environment for both local and international firms. Attracting foreign investment is also crucial for sector growth; efforts should be made to market Ethiopia as an attractive outsourcing destination, highlighting the benefits of investing in a country with a growing, educated workforce. To ensure the success of the coding initiative and the broader digital economy, Ethiopia must create a sustainable ecosystem where local outsourcing firms can thrive and international investors feel confident. This includes addressing regulatory hurdles, enhancing digital infrastructure, and fostering a culture of innovation and entrepreneurship. By fostering collaboration and focusing on these areas, Ethiopia can better position itself to integrate new digital skills into its economy and turn the ambitious goals of the coding initiative into tangible economic benefits.

ETHIOPIAN OUTSOURCING ASSOCIATION Africa’s outsourcing boom: young talent fuels industry growth Africa is forecast to create 1.5 million new BPO jobs over the next six years, with South Africa, Kenya, and Egypt poised to benefit. The business process outsourcing (BPO) sector in Africa – currently employing 1.2 million full-time equivalents across more than 400 contact centres handling international outsourcing contracts – is set for exponential growth. A recent report by CCI Global, a prominent player in African outsourcing, projects that the continent’s BPO workforce will more than double by 2030. This surge is fueled by the growing demand from global companies seeking outsourced customer service. The report, conducted in collaboration with research firm Everest Group, forecasts the creation of 1.5 million new BPO jobs in Africa over the next six years. South Africa, Kenya, and Egypt are poised to reap significant benefits, while emerging hubs like Ghana, Ethiopia, and Rwanda are also positioned for substantial growth. Several factors are fueling this expansion. Foremost among them is the fact that Africa offers significant cost advantages, with labour costs up to 80% lower than Western markets. Additionally, nearly half (45%) of companies surveyed report that African governments are actively creating a business-friendly environment through tax breaks, infrastructure development, and workforce training programs. Africa’s young, multilingual population further strengthens its appeal as an outsourcing destination. Access to motivated talent pool Martin Roe, CEO of CCI Global, a major outsourcing firm, attributes Africa’s booming BPO sector partly to the continent’s high youth unemployment. In an interview with African Business, Roe explained: “Our view as a company is that talent is actually quite well distributed globally, but opportunities are not, and unfortunately in many African countries highly educated and motivated young people can’t get a job.” BPO companies like CCI Global are creating significant new private-sector jobs across Africa, Roe says, benefiting from this motivated talent pool. The firm has about 15,000 employees across South Africa, Kenya, Ghana, Rwanda, Ethiopia, and Egypt. “What characterises all those markets for us is the availability of highly talented people to be able deliver better outcomes,” says Roe, highlighting metrics like sales, conversion, net promoter score and customer satisfaction. CCI Global primarily serves the US market, the largest BPO market globally, as well as the UK, Australia and other mature global markets. “We’ve been building our business in Africa since 2006 and 70% of our business is servicing the American market,” he says, emphasising that CCI Global specialises in handling complex customer interactions for major brands. CCI Global has about 80 clients drawn from sectors such as telecoms and media, high-end retail, financial services, and the new economy and high-growth technology businesses. “The business process outsourcing industry has traditionally focused on low-cost, high-volume interactions between companies and consumers. However, automation, self-service options, chatbots and AI are rapidly reducing the need for such services,” Roe explains. As a result, the remaining interactions tend to be “complicated and highly emotional.” According to Roe, traditional offshore locations such as the Philippines or India, and even source markets like the US, the UK, and Australia, lack the specific skill set required for these complex, emotional interactions. “We think the kind of humans that can handle complex and emotional interactions exist in pretty large numbers in Africa.” Customer connection Language is also a key factor when BPO companies consider setting up shop in Africa, Roe notes. CCI Global is predominantly anglophone in terms of the end markets it serves. However, “it’s about more than just speaking English,” he says. “It’s understanding the nuances of English, like sarcasm and irony and having a connection with a customer.” While English speakers are in demand, CCI Global is expanding its language capabilities to match linguistic trends in source markets. “We’re building multilingual services in Rwanda and Egypt,” he says. Roe sees a “huge opportunity” for Africa to become a major player in global BPO. However, he emphasises that Africa needs to adequately prepare to make the most out of the expected wave of investment. The good news is that governments across Africa increasingly recognise the BPO sector’s job creation potential, he argues. “Increasingly in Africa governments are recognising that rapid job creation is really difficult and there are very few sectors that can create as many jobs as quickly as the BPO sector.” This recognition has translated to “enabling policies and regulations” for the industry in some countries. “The playing field in terms of legislation and ease of doing business is improving for sure. But that historically has been a challenge,” However, bottlenecks remain. “Infrastructure can be unreliable, and currency instability can be a problem,” Roe acknowledges. Kenya stands out The company in May unveiled a new call centre in Tatu City, a 5,000- acre Special Economic Zone (SEZ) on Nairobi’s doorstep. CCI’s new call centre represents a $50m investment and is said to be the largest facility of its kind so far in East Africa. “Our decision to expand across Kenya reflects our profound confidence in the country’s thriving BPO industry and its capacity for sustained growth,” Roe said during the launch. He tells us that the company now employs around 5,000 people in Kenya. “We recognise the raw talent exists in very large numbers in Kenya, that is why we entered the Kenyan market in 2016 and are growing at such a rate”. “We’re a people business and we go where the talented people are. Kenya has been a major success story and that’s entirely down to the kind of people that we’ve managed to hire,” Roe says. Investor confidence grows According to Brenda Mbathi, CEO of Two Rivers International Finance and Innovation Centre (TRIFIC), the rapid growth of Special Economic Zones (SEZs) dedicated to business services has helped bolster investor confidence in Kenya’s BPO sector. She argues that SEZs offer a compelling package for businesses, including tax breaks, streamlined regulations, and high-quality infrastructure. Investors are recognising the potential of SEZs dedicated to business services and are actively backing them, says Mbathi. She points to