Nigeria Spends $1 Billion on Outsourcing Yearly

• Nigeria Spends $1 Billion on Outsourcing Yearly

About $1billion (N305billion) is estimated to be spent annually on the Nigerian domestic Business Processing Outsourcing (BPO) market, by both the public and the private sector, but less than two percent of this goes to local entities.

Outsourcing is a practice used by different companies to reduce costs by transferring portions of work to outside suppliers rather than completing it internally.

The Director-General of the National Information Technology Development Agency (NITDA), Dr Isa Ibrahim, noted that with such huge spend, BPO activities have the potential to contribute to pulling Nigeria out of the current challenges.

He added that with articulate planning and coordination by government, and effective participation by ITECs, significant progress can be made for Nigeria to share from the billions of dollars in the global outsourcing business.
This comes as the Chairman, Nigerian Association of Information Technology Enabled Outsourcing Companies, (NAITEOC), David Onu, proffered ways to crash data cost in the country.

Speaking at the annual conference of the association in Abuja, Monday, Onu said the cost of bandwidth in the country will crash if users connected to the different networks already in Nigeria in different data centres can localise the contents.

He noted that the cost of data is very high in Nigeria, adding that the reason the use of internet is expensive in the country is because most are using the data for either social media or email.

He said: “The social media accounts for about 60 percent and then email and the rest. Most of the emails are accessed servers outside Nigeria. It is just the same way you are in Abuja, and you want to send a mail to your friend in Abuja, but it has to go through the United States, US, or France first. That means you entered a plane to France and came back.

“But if the content is local, that is if we have tier-four data centres where the Google, Yahoo and the rest can reside their content locally, there is enough fibre already laid in the country.”

He continued: “For you to drive on the road, the road has to be accessible to you and affordable. Other countries of the world have made bandwidth available, affordable and sustainable, and we can do the same in Nigeria. It is just about being more intentional about it. The internet itself is as useful as the applications that run on it. Because we don’t have enough of internet applications running on it, so in a way, I can see what the operators are saying because the traffic that should run on it that will help them aggregate their cost are not there. So we advocate that more content should be put on the internet; we must start the localisation of contents.”

Onu stressed the need to build teir-3, and tier-4 data centres and address issues of security, redundancy and anything that would pose a danger for data to enable foreign content providers localise their contents. “Once they discover that you have these things in place, they will bring their content.”

According to him, “The internet millionaires and billionaires are not those who created the connectivity, it is those who have the applications like the Facebook and the Twitter so the more we can have contents, applications, that is where the value chain resides.”

He also stressed the need for partnership between government and the private sector and creating synergy to encourage the development of ICT infrastructure.