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03.08.2009 Technology

Ghana’s ICT sector challenged

By theghanaianjournal
Ghana’s ICT sector challenged
LISTEN AUG 3, 2009

Ghana wants to positions itself as one of the premier BPO destinations in Africa. The first GASSCOM International BPO Conference And Exhibition was held at La Palm Royal Beach Hotel in Accra, Ghana on 22 - 23 July 2009 under the theme “Outsourcing to Ghana, Africa's Golden Gateway”.

Most people who do business with the continent complain that the problems of doing business in Africa are compounded by intrinsic issues such as telecoms connectivity, lack of high standard infrastructure and maintenance, health risks and expensive air fares to get there. And that's before they start complaining about a lack of skilled workers, insufficient management skills, ethnic and security issues, and more recently the international crisis. But despite all these obstacles, many business investors continue to come to sub-Saharan Africa, particularly to places like Ghana that are seen as success stories, a perception recently reinforced by the visit of President Obama.

The conference organised by GASSCOM - Ghana Association Software and IT Services Companies - the main IT industry Association in Ghana, with sponsorship from the World Bank, under the Auspices of the Ministry of Communication, and through the ITES Secretariat (an agency created under the Ministry to promote IT enabled services in Ghana). GASSCOM's member companies are in the business of software development, software services, IT-enabled/BPO services and e-commerce. Participants got the opportunity to see the software and service solutions of its members in an exhibition alongside the conference.

Mavis Ampah, senior ICT policy specialist at the World Bank set up the scene: “Mauritius has a population of 1.27 million, has created about 7000 jobs in the last few years in IT/ITES, and the sector is contributing about 4% of GDP. For every job created, a projected revenue of US$15-20,000 per year can be expected in addition to indirect revenues generated in ancilliary services.”

Ampah added: “There is a Multiplier Effect - four additional jobs for every one job created in the sector (ancillary service sectors such as transportation, real estate, training, catering, etc.). Within the services sector, telecom/IT/ITES is considered as the new growth frontier, and improving people's skills is key.”

When it comes to outsourcing, Ghana has a clear strategy. As most of us know, the BPO - business process outsourcing industry (or as one participant called it “Business Problem Outsourcing”) had become a fast-developing industry, driving the economies of many countries in the world with the most successful example being India.

With the ambition of targeting only 1% of the world's BPO sector, it is estimated that outsourcing could provide over 37,000 jobs for the youth by 2011 in Ghana, with an added value to the country's economy of over US$750 million. Ghana's government has been working hard to have a BPO presence over the last few years.

GASSCOM and the World Bank confirmed that Ghana now has about 20 ITES BPO companies employing about 3000 people. Johan Gott, of AT Kearney USA was at the conference to rate Ghana as one of the most attractive countries globally for investment. The country moved 12 steps up from no. 27 to 15 in A.T. Kearney's index (2007 - 2009).(source: www.atkearney.com/images/global/pdf/Global_Services_Location_Index_2009.pdf)

Since May 2007, ITES has been collaborating with the Ministries of Education, Trade and Industries and many others to boost the sector in Ghana. Nana Osei Bonsu, a lawyer, consultant and advisor to ITES (MOC) explained that as part of its HR objective, ITES has provided training content aligned to the BPO/ITES training curriculum map. Nana said that, “ITES has trained 50 trainers and 3000 agents/professionals in 2009. It has accredited the trainers, launched a training matching grant program with an initial amount of US$3,000,000 to support eligible public and private training institutions in order to deliver the training.

But for all the positives, the conference organisers were courageous enough to take a critical and neutral look at Ghana as a BPO destination. Three major barriers to market were raised: skills, energy and Internet connectivity.

On the skills' side, one employer complained that it is very difficult to find good programmers in Oracle or Java in Ghana, and among the young population, it was hard to identify employees with strong corporate experience. “We have to train them to get them up to speed,” she said. Another participant shared that, “finding anyone with experience in dealing with foreign customers is hard.” People's attitude and endurance at work is also suffering, and one option suggested was to employ more staff on a part-time basis.

Ryan Nichols of Excend mentioned that security and confidentiality are also paramount to attract foreign investors. The Minister of Communication, Haruna Iddrisu who was present said that the ministry will soon submit to the parliament a Data Protection and Privacy legislation for the regulation and protection of information. The ministry will also facilitate the development of additional legislation in the area of Data Protection and Intellectual Property so that investors can operate within the confines of international guidelines and quality standards.

Ghana is dependent on imported energy and is relying on a single source of hydro-electric generation, which produces less power when there are low water levels in Lake Volta. Anyone who knows Accra has experienced power outages that are also about fluctuations in supply and the quality of the transmission network. Nevertheless those responsible say things will get better: thermal and solar energies are on the agenda.

Internet and telecoms' access are still challenging, but the Minister of Communications confirmed that his ministry had taken advantage of the competitive telecommunications market to develop a robust ICT infrastructure backbone that would enable the private sector to provide access to high speed Internet broadband connectivity at affordable rates.

The linking of Internet points of presence to all district capitals under the ICT backbone development programme is being undertaken by the government with support from Huawei Technologies, the Chinese telecoms vendor. Right now, Ghana Telecom's monopoly access to the SAT-3 submarine cable kept international bandwidth prices relatively high and connectivity is not always reliable: for a country connected by fibre, actual download speeds remain slow. All of these things are potentially damaging to the prospects of growing a healthy BPO industry.

But international bandwidth is one area where relief is at hand. There are four new international cables that will have landing stations in Ghana: Glo One, Main One, WACS and ACE. Soon the country will have many times more international bandwidth at something approaching 20% of current prices.

Furthermore, the government is carrying out the second phase of the National Communication Backbone Network to extend Internet connectivity to all districts in the country. A.J. Whiteman, PR manager at Rising Data Solution made it clear: “Once full redundancy is achieved, Ghana will be a greater destination for e-services, e-transactions and VoIP call centres.” Edwin Provencal, the managing director of National Communication Backbone Company Limited made it clear that there will be enough internal connectivity to enable all IT-enabled initiatives in wherever in Ghana where connectivity is a barrier. He also stated that competition in the undersea cable will be a boost for the industry since the only barrier to entry for interested investors willing to set up shop is “No alternative to SAT 3”.

If all of the above was not challenging enough, there is the current global crisis. Since major BPO customers remain in Europe and the USA, offshoring to African destinations has become sensitive for political reasons. However right now, some attendees have confirmed that it is much less sensitive to outsource to Africa than to Asia, at least in the USA.

The conference organisers recognised that there is still a need to reinforce a credible vision for Ghana: Mavis Ampah from the World Bank concluded her presentation with this message: “we need strategic focus, we need industry and government champions!” Mark Davies of BusyInternet added: “We need to set up meetings between civil servants and private sectors, we need to get them in the same room to review all major issues”.

The ICT BPO industry has grown by 25% over the past three years, and there is no reason why Ghana should not be able to take a share of the pie. Over the last decade, the BPO trend started in Ireland, Scotland, Canada, Eastern Europe, and of course in India. It then moved to Latin America, Morocco and Tunisia, the Philippines, more recently to Mauritius and Egypt, and some business going to Vietnam and China. Ghana is now on the map.

A local BPO firm, e.Services Africa Ltd mentioned that “Telecom & Financial Services and their Convergence offers the single most significant Opportunities for call centre business in emerging markets”. So where do Ghanaian BPO companies need to start? As Kofi Dadzie, CEO of Rancard Solutions described it, “local experience is important. If you build local solutions for local clients, they will be cheaper than in the Western World. Local problems require local solutions”. International companies looking to outsource will be far more impressed by a company that already does, for example, call centre work locally for a bank.

Article published courtesy of Balancing-Act Africa
credit:Sylvain Beletre

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