40% of tasks in Africa’s growing tech outsourcing sector may be affected by AI by 2030

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%. The country’s ‘Outsource to Nigeria Initiative’ aims to capture a portion of the $8.97 trillion global BPO market, and with 70% of Nigeria’s 218 million population under 30, the country offers a vast pool of tech-savvy young talent.

However, the rise of automation could slow down this growth. New research by Caribou and Genesis Analytics, in partnership with the Mastercard Foundation identifies Customer Experience roles – 44% of current employment in the African BPO sector – as particularly vulnerable, with half of the tasks at risk of automation. The report further identifies that 40% of tasks in Africa’s tech outsourcing sector, including BPO (Business Process Outsourcing) and ITES (IT-Enabled Services), could be automated by 2030, creating new pathways for workers to move into higher-skilled, higher-paying roles.

Investing in AI Upskilling

With just 10% 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. Rodwell Mangisi, Director of Digital Economy Pan African Programs at the Mastercard Foundation, emphasized the importance of investing in targeted upskilling programs, especially for women and young professionals, to ensure sustainable, high-value employment across demographics.

Integration of AI in BPO and ITES Sectors

AI is already deeply integrated into Africa’s BPO and ITES sectors, driving efficiency and innovation. Workers are leveraging tools like ChatGPT, Microsoft Copilot, and in-house chatbots to enhance productivity, creativity, and accuracy. 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, creating opportunities for career advancement and transitioning into higher-level roles.

Challenges and Opportunities

Despite the opportunities AI presents, its rapid rise could impact certain roles in the BPO sector, particularly entry-level jobs. To futureproof the sector, AI-driven upskilling programs are necessary to enable workers to transition into higher-skilled, better-paying roles in cybersecurity, AI management, and data services. Charlene Migwe, Program Director at Caribou, highlighted the need for investments in skills development, ethical AI, and inclusive policies to transform automation risks into opportunities for innovation and resilience.

Gender-Based Inequalities

AI poses challenges for women and youth in the sector, as entry-level roles are more susceptible to automation. The report underscores that tasks performed by women are 10% more vulnerable to automation than those by men, which could exacerbate gender-based inequalities if not proactively addressed. Customer Experience roles and Finance and Accounting positions are among the most affected, emphasizing the importance of equitable AI upskilling and reskilling to ensure a smooth transition into future-proof roles for all demographics.