Africa - Who has the guts?

In the last years African countries are ascending the list of competitive locations for global services. AT Kearney in the Global Services Location Index - which analyzes and ranks the top 50 countries worldwide for locating outsourcing activities bases its index on 43 measurements, grouped in 3 categories: financial attractiveness, people and skills and availability and business environment- noticed that the Middle East and North Africa are emerging as a key offshoring regions because of the large, well educated population and its proximity to Europe.

The global sourcing landscape in Africa can be classified into two main regional hubs: Northern Africa with main countries like - Egypt, Tunisia and Morocco- involved in BPO services; and Sub-Saharan Africa, where the leading countries for call center services are South Africa, Ghana, Kenya and Mauritius.
Most of these countries don’t even have oil, gas or any other natural resources. So how can a small African state be a destination for outsourcing? The answer it’s quite simple: the best resource a country can have is its people.

“Looking for growth? Think Tunisia”
This is the name of an international communication campaign for showcasing investment opportunities in Tunisia. It targets Tunisia’s main trade partners which include notably France, Italy, Spain, Germany and the United Kingdom. Half of the country’s commercial exchanges are carried out with these five European countries.

Tunisia has become a favored destination for foreign direct investment over a few years now. It is its modern infrastructure, stable government, strong economy, accessible location and most importantly, the availability of high tech professionals at low costs, which make it the ideal market for the investors. Many reports rate Tunisia as a leader in Africa and in the Arab World for its excellent performance worldwide. World Economic Forums Africa Competitiveness Report, 2007 identifies it as the first most competitive economy in Africa and 29th in the world.

With a population of 10.3 million, Tunisia attracted foreign direct investment of $3.270 million in 2008. Around 2000 foreign firms have invested in the country and few chose Tunisia for its close proximity and preferential trading relations with the European Community and the Arab Maghreb Union, as well as for the Investment Code, which offers foreign investors considerable incentives and exemptions. Another economical advantage is that despite the intensification of the world debt problem, Tunisia managed to reduce its total debt burden.

The country has earmarked 7, 5% of its GDP to the sector of education and 1, 25% in scientific research and innovation. Thanks to the setting up of 3 additional engineering schools, the country will train 7000 engineers by 2011-2012, as against 4000 currently. Tunisia seeks to attract 2,000 new outsourcing jobs this year to minimize its double-digit jobless rate. Many European IT firms have set up operations here, as the cost of a Tunisian engineer is about 80 percent lower than that in Europe. Tunisia's well-educated workforce is its greatest source of wealth and the sudden influx of outsourced services can also be partly attributed to its culture.


For the ITC sector, Chapeau
The Davos World Economic Forum’s international ranking for 2008-2009 puts Tunisia 1st in Africa in the area of information and communication technologies. ICT & outsourcing of services are one of Tunisia’s most dynamic sectors, posting one of the highest growth rates: 17.8% in 2008. Over the past few years, the contribution of this sector to GDP has been on the rise, up from 2.5% in 2002 to 10% in 2008. ICT & outsourcing of services are the beneficiaries of a significant level of investment, amounting to some 3.5 billion euros for the period 2007-2011, compared to just 230 million euros for the period 1992-1996. With 200 call centers, Tunisia is one of the leading call center outsourcing destinations in Africa and in the Arab world. There are procedures adopted by the government to strengthen investment in call centers and remote support centers, through the activation of the network structure of the Internet Protocol (MPLS) at the national level in addition to the extension of the El Ghazala technological pole (a pool of more than 3900 people: 2000 engineers, 140 teachers & researchers and 1700 students) which specializes in ICT activities and research.

The high increase of investments in ICT is due mainly to better infrastructure (especially in the area of telecommunications) with the implication of the private sector. The government supports the ITC sector by developing the legislative and regulatory framework, which provides real guarantees to foreign investors: total freedom to invest and the possibility of holding up to 100% of capital, repatriation of dividends and of proceeds from the sale of capital and the possibility of using bank accounts abroad.

Tunisia has established an extensive system of complementary training on international referentials and standards (ISO, ITIL - Information Technologies Infrastructure Library, CISA) dispensed by highly-regarded training centers. These positive attributes do not escape other operators from other parts of the world such as India, widely considered to be the world's leading outsourcing destination. France – is also an interesting partner. The Kearney index also noted that French-speaking countries like Tunisia, involve in the outsourcing of their company services by serving francophone markets with stronger business environments contending with lower costs.

Alcatel's R&D center in Tunisia was first tasked with assisting the company's Paris and Milan centers in the development of products. It evolved later into an independent design and implementation center. SR Teleperformance, a multinational call center, currently employs about 1,000 workers in Tunisia that serve French clients. Because of the high rate of customer satisfaction, the company is reportedly looking to add two new call centers in Tunisia. SR Teleperformance sees Tunisia as a politically stable country with young demographics, low wages and a modern telecommunications infrastructure.
Probably Tunisia will also become a regional business hub for companies operating in the space and aeronautic sector. 20 foreign companies are currently operating in the sector, including major names such as Latecoere, Zodiac and Sogema.

Thanks to its considerable advantages, Tunisia operating costs for shared service centers are more than 20% lower than other countries. This is proven by the foreign direct investment to ICT & outsourcing of services, which reached more than 2.4 billion euros at this time and also by the number of initiatives of setting up companies (up to 40 - in 2008). By now there are almost: 400 software engineering firms, 300 system integrators, 450 distributors and retailers, 12 internet service providers, 8 development centers serving multinationals, 170 service centers,3000 to 4000 jobs created each year. The numbers are impressive and make Tunisia an important destination on the outsourcing map.