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04.01.2006 Business & Finance

Ghana among preferred countries for offshore services

Ghana   among preferred countries for offshore services
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Accra, Jan. 4, GNA - Ghana has been named for the first time among the elite countries tracked for their attractiveness as locations for offshore services.

She ranked 22 according to the annual ranking results for 2005 among 40 countries tracked by A. T. Kearney, one of the world's largest management consulting firms based in the United States. The exercise ranks the most attractive locations for "offshoring" of services activities.

A letter communicated to the Ministry of Communications by Mr Laurent Besancon of the Policy Division of the Global ICT Department of the World Bank acknowledging the nation's performance and forwarded to the GNA said "...Ghana is now tracked in the index" and that only one other country from Sub-Saharan Africa, that is South Africa, was being tracked. She ranked 32.

Business Process Outsourcing (BPO) is described as the Long term contracting out to an external company of the management and delivery of business processes and this commonly involves activities such as Information Technology, call centre, medical transcription, pay-roll processing and other activities that can easily be transferred to other countries because of development of modern and efficient communications infrastructure.

It is a phenomenon that is becoming more popular in the world of Information and Communications Technology (ICT) and countries like India, Singapore and Ireland have emerged as the most inviting destinations for companies in the developed world.

According to Mr Besancon, Ghana ranked number one for financial structure and tied with the Philippines.

The A.T. Kearney analyses the top 40 services locations worldwide against 40 measurements in three major categories: cost, people skills and availability, and business environment.

"These rankings are encouraging," Mr Besancon said but added: "As an example, Ghana is ranked last for people and skill availability." Mr Albert Kan Dapaah, Minister of Communications, told the Ghana News Agency on Wednesday that the recognition was an indication that Ghana's progress in ICT and her vision to become the ICT hub of the African Continent was already gaining grounds among the elite ICT nations.

"This report comes as a great boost for Ghana's efforts to establish itself as the communications hub of the Sub-Region and major destination for ICT investment in Africa. "

The Minister said he was particularly concerned with the development of modern ICT infrastructure to enable Ghana to compete favourably in the world of Business Process Outsourcing (BPO) activities, another name for offshore services.

He noted that if Ghana could attract as little as five cent of the global BPO revenues, estimated at a minimum of 300 billion dollars annually, "this country could be spared the agony of world trade in tangible and primary products."

Mr Kan Dapaah said in pursuit of this objective, the Ministry of Communications was vigorously promoting the development of a broadband infrastructure out of the nation's stock of optic fibre to ensure a national coverage that would permit the ubiquitous deployment of ICT. The Ministry has also transformed the former GNTC Ghana House into a high-tech Incubation Centre that is currently offering training in call centre management and medical transcription and other requirements for BPOs in readiness for companies that would want to take advantage and locate in Ghana.

"I am optimistic that when a sufficient pool of people trained in the relevant skills needed for BPO activities is available, and Ghana is able to extend the VOLTACOM fibre to all parts of the country, the ICT industry will be in a position to generate the wealth through employment in any part of the country.

"In an industry that is predominantly private sector dominated, support for the industry is better appreciated through the provision of the national backbone communications infrastructure that would guarantee open-access transmission facilities and wholesale services," the Minister said.

Mr Kan Dapaah said the Ministry was striving for an enabling environment and expressed the confidence that the Government would secure the needed investment to provide broadband to the rest of the country.

Off shoring of services, also known as Business Process Outsourcing (BPO) has grabbed headlines in the past few years. Some proclaim it as a necessary, effective and inevitable strategy to reduce costs, focus on the core business, maintain competitiveness and obtain needed capabilities in the world of Information Technology (ICT). In Ghana, the ACS-BPS company located within Premier Towers has been engaged in data processing for the US market, and its operations has been appreciated for the quality of service, speed and skill of the employees.

Other findings contained in the A. T. Kearney's Annual Global Services Location Index for 2005, which is the measurement for the tracking are that India ranked number one and continued to remain the best offshore location by a wide margin although wage inflation and emergence of lower cost countries decreased its overall lead.

"This is mainly due to a slight reduction in India's financial attractiveness, the result of wage inflation in India and the emergence of new even lower-cost contenders such as Ghana and Vietnam," the result said.

China followed with improved infrastructure and a low-cost option for servicing Asian markets.

Thailand is reported to have moved from 13th to the sixth position in the 2005 Index and Southeast Asian countries now make up four of the top six location on the Index.

The Middle East and Africa appeared to be the next frontier in off shoring as countries such as Egypt, Jordan, UAE and Ghana performed well.

Over the last three years the number of countries covered in the Index has jumped from 11 to 25 and now to 40 to reflect the greater complexity of questions asked by investors. Based on the individual language requirements, skill levels, security concerns, regulatory structures and other criteria specific to each function, investors will then find a range of different locations that make sense for different sets of activities.

The first 10 countries are India, China, Malaysia, Philippines, Singapore, Thailand, Czech, Chile, Canada and Brazil. US ranked 11 while UK ranked 28. 4 Jan. 06

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