Artificial Intelligence (AI) is expected to affect 40 percent of Africa’s tech sourcing by 2023, according to a new report.
The report by Caribou and Genesis Analytics, in partnership with the Mastercard Foundation identifies customer experience roles which is currently at 44 percent of employment in the African Business Process Outsourcing (BPO) sector – as particularly vulnerable, with half of the tasks at risk of automation.
The report identifies that 40 percent of tasks in Africa’s tech outsourcing sector, including BPO and IT-Enabled Services (ITES), could be automated by 2030, creating new pathways for workers to move into higher-skilled and paying roles.
With just 10 percent of tasks fully resilient to automation, strategic investment in widespread AI upskilling and training will be key to unlocking Africa’s $35 billion BPO potential by 2028, the report said.
Nigeria’s BPO market is projected to expand from $980 million in 2023 to $1.84 billion by 2028, reflecting an annual growth rate of 12.56 percent.
The country’s ‘Outsource to Nigeria Initiative’ aims to capture a portion of the $8.97 trillion global BPO market.
With 70 percent of Nigeria’s 218 million people under 30, the country offers a vast pool of tech-savvy young talent.
However, the rise of automation could slow down this growth, the report projects, as Nigeria account for most of the continent’s population.
“Africa’s tech outsourcing industry is expanding rapidly, adding new jobs and opportunities each year,” says Rodwell Mangisi, director of digital economy Pan African Programs at the Mastercard Foundation.
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“As AI transforms global business processes, Africa can lead by ensuring its workforce is AI-ready.”
This, Mangisi says the continent can do by investing in targeted upskilling programs, especially for women and young professionals.
He noted that with it, Africa can ensure that 6 percent of its annual growth translates into sustainable, high-value employment that benefits all demographics.
According to the report, AI is already deeply integrated into Africa’s BPO and ITES sectors, driving efficiency and innovation.
Workers are using tools like ChatGPT, Microsoft Copilot, and in-house chatbots to enhance productivity, creativity, and accuracy, the report notes.
The report states that these AI-powered technologies assist with coding, debugging, content generation, and customer service, enabling employees to focus on strategic problem-solving, decision-making, and higher-value tasks.
As a result, they see opportunities for career advancement and transitioning into higher-level roles
Despite these opportunities, AI’s rapid rise could impact certain roles in the BPO sector.
Entry-level jobs – comprising 68 percent of the workforce – are particularly affected, with more than half of tasks being automatable, the report says.
To futureproof the sector, the report notes that AI-driven upskilling programs are needed to enable workers to shift into higher-skilled, better-paying roles in cybersecurity, AI management, and data services.
Charlene Migwe, program director at Caribou, says Africa’s tech outsourcing sector is at a pivotal moment.
“With the right investments in skills development, ethical AI, and inclusive policies, we can transform the risks of automation into new opportunities for innovation and resilience.”
While AI presents significant opportunities, it also poses challenges, particularly for women and youth who predominantly occupy entry-level roles.
The report highlights that tasks performed by women are, on average, 10 percent more susceptible to automation than those by men in the sector.
This disparity risks exacerbating gender-based inequalities in the sector’s workforce if not proactively addressed.
Customer Experience roles, which account for 44 percent of employment in the BPO sector, are among the most affected, with half of tasks in these roles being automatable, the report explains.
Finance and accountingg positions in the BPO sector face similar challenges, with nearly two-thirds of junior-level tasks at risk.
Without intervention, these shifts could disproportionately impact the livelihoods of young workers and women in the sector.
To mitigate these risks, the report calls for urgency of equitable AI upskilling and reskilling efforts to ensure all demographics can transition into future-proof roles.