Improving

Business
Competitiveness
and Increasing
Economic Growth
in Ghana: The
Role of ICT-ITES

“DRAFT” Executive
Summary

May, 2006
About This Material

This document is the Executive Summary of a Report on ‘Improving Competitiveness and

Increasing Economic Growth in Ghana: the Role of ICT-ITES’ commissioned by the Ministry of
Communications, Government of Ghana in partnership with the Information for Development
Program (infoDev), the World Bank and MIGA. It focuses on three main areas:

• An analysis of Ghana’s ability to compete globally as well as regionally in ITES-BPO

and the primary constraints to improving Ghana’s competitiveness in ITES-BPO

• Recommended concrete actions for Ghana to increase it competitiveness and capability as

an ITES-BPO destination, and also includes targeted ITES-BPO activities and market
segments in which Ghana can be competitive in the short and medium term

• A roadmap for the future of developing ITES-BPO industry in Ghana, including a skills
development component, policy framework, and measurement matrix

• A monitoring and evaluation framework for the ITES-BPO sector in Ghana, providing
baselines and targets

Kindly note that the analysis presented in this report is based on information and findings as of
April 2006 and may not reflect the impact of subsequent changes and developments.

A separate report has been created with recommendations on the Investment Promotion Strategy
for the ITES-BPO sector in Ghana.

infoDev 2 “Draft” Executive Summary

Contents

List of Abbreviations and Acronyms Used................................................................. 4

1 Executive Summary ...................................................................................................... 5
1.1 Introduction ............................................................................................................... 5
1.2 ITES as a source of Enhanced Economic Growth ............................... 5
1.2.1 Why ITES-BPO for Ghana ............................................................................ 6
1.3 Key Findings and Recommendations of our Study .............................. 8
1.3.1 SWOT Analysis for Ghana as an ITES-BPO Destination ............. 8
1.3.2 People Driver 9
1.3.3 Infrastructure Driver 10
1.3.4 Environment Driver 12
1.3.5 Clusters Driver 13
1.3.6 Incumbents Driver 13
1.4 Suggested Target Markets and Segments ............................................. 14
1.4.1 Ghana’s "National ITES-BPO Offer" or Value Proposition......... 14
1.4.2 Market Opportunities for Ghana............................................................... 15
1.4.3 Target ITES-BPO Segments for Ghana .............................................. 16
1.5 M&E Indicators ...................................................................................................... 16
1.5.1 ITES-BPO Workforce Projections ........................................................... 17
1.6 Conclusion ............................................................................................................... 18

infoDev 3 “Draft” Executive Summary

List of Abbreviations and Acronyms Used

BPO: Business Process Outsourcing

CAGR: Compounded Annual Growth Rate
ECOWAS: Economic Community of West African States
GDP: Gross Domestic Product
GIMPA: Ghana Institute of Management and Public Administration
GISPA: Ghana Internet Service Providers Association
GoG: Government of Ghana
GZFB: Ghana Free Zone Board
KPO: Knowledge Process Outsourcing
ICT4AD Policy: ICT for Accelerated Development Policy
ITES: Information Technology Enabled Services
MNC: Multi-National Corporation
MoC: Ministry of Communications
NCA: National Communications Authority
OEM: Original Equipment Manufacturer
PC: Personal Computer
SLA: Service Level Agreement
SSS: Senior Secondary School
UK: United Kingdom
US: United States of America
USD: US Dollars
VoC: Voice of Customer
VoIP: Voice over Internet Protocol
WAMU: West African Monetary Union

infoDev 4 “Draft” Executive Summary

1 Executive Summary

1.1 Introduction
The Government of Ghana (GoG) has identified Information technology-enabled services (ITES)
as one of the sectors along with agri-processing and tourism value-added as key to enhance
economic growth. In order for Ghana to understand capability and realise its potential in ITES,
which is currently a small segment today, the Ministry of Communications (MoC), Government
of Ghana in partnership with the Information for Development Program (infoDev), the World
Bank and MIGA commissioned “Hewitt Associates (India) Private Limited”, in November 2005,
to conduct a study on “Improving Competitiveness and Increasing Economic Growth in
Ghana: The Role of ICT-ITES”.

1.2 ITES as a source of Enhanced Economic Growth

Studying economic progress in relation to the economic structure of different countries over time,
it can be clearly established that a higher average level of real income is always associated with a
high proportion of the working population engaged in tertiary industries. In a large number of
economies, services is now the largest sector in terms of employment, this movement largely
orchestrated due to a massive increase in productivity growth and the progressively higher
income elasticities in the primary and secondary sectors. While the more advanced countries such
as the United States, Germany and the United Kingdom have followed the stylized movement
from agriculture as the largest source of employment, to industry and finally to services as the
largest employer, the structural transformation of employment has occurred even more markedly
from agriculture to services in the later developed and some of the currently developing countries.
The services sector is becoming a dominant feature of the economic landscape in these
developing countries as the contribution of this sector towards GDP increases steadily and the
contribution of the agricultural sector towards GDP decreases.

Within services, the IT-enabled services segment is beginning to be perceived as the new growth
frontier. The rise of this segment is being driven by the rapid growth of Global Outsourcing/
Offshoring, defined as the delegation of one or more IT-intensive business processes to an
external provider that in turn, owns, administers and manages selected processes, based on
defined and measurable performance metrics. Countries such as India, Philippines, the Czech
Republic, and Ireland have completely transformed their economies by adopting IT and ITES-
BPO segments as the engine that propels their economies in an accelerated mode in relatively
short periods of time.

Only 10% of the addressable market for global offshoring is estimated to be realized so far and
the size of the addressable market itself is expanding as organizations continually expand what
can be further outsourced and offshored. Given below are the global forecasts for the ITES-BPO
sector by industry researcher Gartner-Dataquest.

infoDev 5 “Draft” Executive Summary

 1
Table 1.2.1: Worldwide ITES-BPO Market Forecast (USD Millions)

2004 2005 2006 2007 2008 2009 CAGR(%)

2004-2009
ITES-BPO 114,797 125,895 137,332 150,675 164,357 179,348 9.5
Total

ITES-BPO 9.8 9.7 9.1 9.7 9.1 9.1 -

Growth %

From the above projections, it is evident that the ITES-BPO phenomenon can therefore translate
into a very large opportunity for countries such as Ghana which have some of the basic building
blocks required for becoming an ITES-BPO services destination.

1.2.1 Why ITES-BPO for Ghana

The Ghanaian economy remains predominately agrarian and the sector continues to dominate the
labour market as the main source of employment for the Ghanaian workforce. However,
examining the level of economic activity of the various sectors, measured in terms of percentage
of economically active population in each of these sectors, shows that percentage contribution of
2
the agriculture sector dropped drastically to 46.6 percent in 2005 from the 1988 figure of 61.1
percent. This has partly been due to the declining performance of the agricultural sector in the
eighties and nineties, in line with similar trends across the world. The decline in agriculture
employment in favor of industry and services reflects its declining share in real GDP as against
3
the increasing share of services and industry.

The Service Sectors has hence, emerged as the second largest source of employment for Ghana
and the largest contributor to GDP with a contribution increase in overall GDP from 22.1 percent
in 1984 to 43 percent in 2004. It consists of sub-sectors such as trade-related services,
transportation, financial and banking services, public administration, and business services
(including the nascent ITES-BPO segment) and employs more than 25 percent of the work force.
The Industrial sector, on the other hand, has not really developed in Ghana, being the lowest
employer with 16.98 percent economically active population employed by this sector.

1
Source: Forecast by Gartner-Dataquest
2
Sources: Quarterly Digest of Statistics: Ghana Statistical Service, Government and World Bank Reports, Employment
figures from GLSS 3 & 4 and 2000 Population Census
3
The agricultural sector recorded an average annual growth rate of 2.3 percent between 1984 and 2004 compared with 4.7
percent and 4.8 percent in the industrial and service sectors respectively

infoDev 6 “Draft” Executive Summary

 Figure 1.2.1.1 Sector-wise Employment Trends in Ghana

Conclusion: Considering that Ghana has entered a phase of accelerated economic expansion over
the last three years with real GDP growth averaging 5.2 percent, compared to a twenty year
average of 4.4 percent, to maintain and enhance these growth rates it becomes imperative that
service sectors such as ITES-BPO become the new focus for Ghana due to their unique potential
as harbingers of enhanced job creation and accelerated economic growth. This sentiment has also
been expressed in the Ghana Poverty Reduction Strategy which has identified ITES-BPO as one
of the non-tradition sectors with the potential to accelerate economic growth in Ghana.

Some key benefits that this industry can be expected to bring to Ghana are summarized below:

• In the ITES-BPO sector, as Ghana attains greater development and maturity, it will lead to
enhanced job creation, as it is a people-based industry. Here scale is achieved by high
deployment of people unlike traditional sectors where growth and development does not
imply an increase in the number of jobs

• Unlike traditional sectors of economy, the ITES-BPO sector requires relatively smaller
investments in both time and funds to set-up and start generating revenues. Other sectors
are structurally slow to establish, requiring large capital and physical infrastructure with
high gestation periods. This makes it a quick-win for a developing, economically weaker
economy such as Ghana

• ITES-BPO are primarily export-oriented services; focusing on these can enhance FDI
inflow into Ghana leading to various economic development advantages related with
increased export earnings and an impact on the labour force: job creation, higher wages and
upgrading of skills

infoDev 7 “Draft” Executive Summary

 • Positive spill over effects will also include improvements in ICT infrastructure and business
services which will further lead to an increase in business opportunities for domestic
companies

• One of the most salient features and persistent trends in the services industry is the
increased feminisation of the labour force and this is evidenced in the ITES-BPO sector
also. Hence, female participation in the workforce can be expected to increase with
development of ITES-BPO in Ghana

• A constant focus on performance metrics such as quality, timeliness, and accountability is a

primary characteristic of the ITES-BPO industry. Such attributes can, in turn, help
Ghanaian firms in improving organisational systems and in adopting more globally
competitive and strategic management approaches. Moreover, as such generic skills are
portable, they can potentially benefit other sectors of the economy

• The growth of the ITES- BPO industry in Ghana will also create demand for ancillary and
support services and industries, such as housekeeping, security, catering, transport,
language and domain training, telecom and computer equipment provision and
maintenance, and real estate. It is estimated that for every direct employment created in the
ITES-BPO sector, four indirect jobs are created in other aspects of the economy. Hence, the
industry will be able to create large scale indirect employment opportunities for the less
skilled and less educated

1.3 Key Findings and Recommendations of our Study

1.3.1 SWOT Analysis for Ghana as an ITES-BPO Destination

Based on our findings and interactions with stakeholders, including incumbent organizations,
during the course of the study, we have identified the overall Strengths, Weaknesses,
Opportunities and Threats for Ghana in the context of the ITES-BPO industry.

Thereafter we have studied Ghana’s current positioning under each of the classifications of the
4
Hewitt Five Driver Model , namely People, Infrastructure, Environment, Incumbents and
Clusters and made recommendations for Ghana which will help facilitate the development of its
ITES-BPO sector.

Strengths
• Large pool of potentially good English
speaking population
• Competitive labour differential to US and
UK companies
• Stable geo-political environment in
comparison to neighbouring countries
• ITES-BPO sector identified as a focus
areas for economic development by the
Government
• Availability and penetration of telecom and
internet services is rising
Weaknesses
• Employability of large talent pool is
proportionately low
• Inadequate education infrastructure and
training facilities
• Low levels of IT literacy and PC
proliferation at educational and business-
commercial levels
• Though costs of infrastructure may be
lower in comparison to some countries,
there is a current lack of suitable
telecommunications and quality real estate

4
Refer to Annexure I

infoDev 8 “Draft” Executive Summary

• Several investor friendly policies including
tax holidays, 100 percent foreign
ownership
• Cyber laws to protect ITES-BPO investors •
in the process of being promulgated
Opportunities
• Leverage the image of its democratic and
relatively stable political environment
towards establishing itself as a regional hub
for offshoring services
• Establish itself as a subcontracting hub for
more established destinations
• Collaborate with countries such as South
Africa and offer complementary services
• Develop offerings such as medical
transcription and data processing in the
short and medium term
infrastructure which is a bottleneck for
investors
• High inflation and interest rates
No policies or incentives specifically for
the ITES-BPO sector
• Low level of incumbent presence inspite of
early offshoring activity (ACS)
Threats
• Proactive investment promotion of the
ITES-BPO industry by competing
regional destinations such as Nigeria,
Mauritius, Botswana
• Lack of development of necessary
educational and training infrastructure
resulting in limited scalability for the
industry

1.3.2 People Driver

Human resources are a key differentiator of the capability of a location to attract and sustain a
particular industry. The ITES-BPO sector is especially, highly people intensive and dependent on
talent. In order to succeed in this sector, Ghana would require availability of an abundant, low
cost, efficient and suitable talent pool. The following table addresses the strengths and
weaknesses of Ghana under the People Driver and provides recommendations for developing the
same with regards to the ITES-BPO industry.

Strengths
• As mentioned earlier Ghana possesses a
large pool of workers with English
language skills - the largest in the West
5 tertiary levels as well as lack of IT skills
African region
• English is the official language
• There is high availability of mature
workers even at entry level
• The country offers competitive labour cost
differential to US and UK investors as well
as the regional competitor, South Africa
• There is strong cultural affinity with the US
and UK cultures
• Current ITES-BPO staff attrition rates are
low at about 5 percent as compared to 35–
Weaknesses
• Despite a large talent pool, employable
proportion is low on account of high drop-
out rates from primary to secondary to
• There are capacity constraints for provision
of education at the Senior Secondary
School and College levels
• There is also an absence of market/ demand
led curriculum; course curriculum has not
evolved with the changes in the economic
structure and composition of the country
• Whilst talent pool availability is substantial
at entry level, it is not so at middle
management and senior levels

5
http://www.oasisint.net/about.php
6
Quality of Math and Science Education score: Ghana- 3.51, South Africa – 2.82, Nigeria-2.72, Philippines- 2.78
Quality of Management Schools score: Ghana-4.01, Nigeria – 3.51, Botswana-3.27,China-3.56; Source: The Global
Information Technology Report 2003–2004

infoDev 9 “Draft” Executive Summary

 40 percent destinations such as India • Labour cost differential offered by Ghana
• Once trained, workers tend to perform is not as high as countries such as India and
consistently Philippines
• Workforce is flexible to the demands of the • Training requirements are high in order to
ITES industry. It is not difficult to staff reach requisite quality levels of service
operations in excess of a 12-hour day or a delivery
night shift, unlike in established • There is a paucity of technical talent and
destinations such as South Africa professionals in Ghana
• Ghana ranks high on both the quality of • The country is still characterised by low
Math and Science education (in schools) levels of IT literacy and PC proliferation, at
and the quality of Management education both the educational and business-
(in Management schools) - higher than commercial levels
some of the regional countries and even • Ghana does not have any significant
6
some established destinations foreign language skills across the country,
rendering it difficult to position it as a
strong destination for European companies
Recommendations
• Set up an ITES-BPO Vocational Training Expert Group comprising members from within
the industry as well as educational experts to review and comment upon a set of uniform skill
standard for ITES-BPO
• Define and adopt the set of uniform ITES-BPO skill standards and implement a National
Level ITES-BPO Skills Assessment, Certification and Training Program that will assess
potential candidates on certain predetermined skill requirements and provide a score that can
be used by prospective employers to judge capability and therefore reduce some of the costs
associated with in-house recruitment assessment
• Develop and introduce an Accreditation Policy in conjunction with the Vocation Training
Expert Group for private training institutions. This will help ensure quality of training
• Review and internationally benchmark educational syllabus at School and Tertiary levels
with a focus on building language, analytical and computer skills
• Introduce courses providing specialization in ITES-BPO management through GIMPA
and other facilities so as to develop local management talent
• Attract and retain skilled workers in the industry by: building awareness of career
opportunities provided by ITES-BPO; setting up ITES-BPO career counselling cells;
aggressively targeting and promoting Ghana’s ITES-BPO industry in `Diaspora’ forums
• Enable educators to participate in the ITES-BPO movement by training them and
providing them a “hands-on” experience in the ITES-BPO and IT environment through
Teacher externships, summer work programs and consulting opportunities

1.3.3 Infrastructure Driver

Availability of reliable infrastructure is another critical aspect for ITES-BPO establishments. The
industry is heavily dependent on real time connectivity, with high demand for a robust telecom
and power infrastructure. Civic amenities such as good roads, transportation systems, etc make it
easier for companies to do business out of a particular location. The following table includes
strengths and weaknesses of Ghana under the Infrastructure Driver and provides
recommendations for developing the same with regards to the ITES-BPO industry.

infoDev 10 “Draft” Executive Summary

 Strengths Weaknesses
• The Telecom industry in Ghana is partly • There is significant lack of telecom
liberalized bandwidth exacerbated by lack of
• Internet availability and penetration is on competition, in the industry keeping prices
the rise of services currently higher than in
• Access to telephony (as measured by tele- competing destinations
density) has significantly improved over • Telecom set up time (especially where
the last five years, primarily due to the location requires substantial last mile
introduction of mobile telephony in the interventions) has come down, but is still
country high
• Initiatives are being undertaken towards • Quality of network (for voice, data and
ensuring that telecom costs for ITES-BPO internet) needs substantial improvement
operations are competitive with other • Information availability (on cost,
destinations availability, terms and conditions) is highly
• Cost effective services such as VOIP have “imperfect”
been allowed for ITES-BPO • Connectivity beyond Accra is considered
• Real estate developers are granted several unsatisfactory, even to key centers such as
fiscal incentives including custom import Sekondi- Takoradi, Kumasi and Tamale
duty exemptions, depreciation or capital • There is a lack of quality real estate which
allowance measures, exemption from taxes is a constraint to the growth of the industry
7
on construction activity, etc . • Availability of Grade A’ buildings is
limited and subsequently rentals for ‘Grade
B’ buildings is artificially driven higher
• Real estate ownership and title procedures
are considered cumbersome and unclear
due to presence of customary laws
• As most of the technology park projects are
currently in the planning stage, park
availability is limited in the short to
medium term. The ‘Shell’ concept is not
envisioned
Recommendations
8
• As in the case of GISPA reducing E1 prices for its members , proactively encourage
availability of cost competitive telecom services for ITES-BPO companies
• Monitor quality of telecom services through the National Communication Authority and
intensify investment promotion in the telecom sector so as ensure effective competition
and multi-provider situation
• Provide infrastructure development assistance to telecom companies establishing
infrastructure to provide services to ITES-BPO establishments within Technology/ ICT Parks
and designated special zones
• Review ICT Park Strategy and unify other ICT Park initiatives
• Revisit current model of Tema Park Development including availability of Shells (Public
Sector led)
• Ensure that incentives provided to commercial real estate developers are linked to quality of
development and timeliness. Existing incentives in this regard should also be proactively
promoted to international developers
• Government should also work towards simplifying land ownership and title procedures
7
Source: Ghana investment Profile: Property Development ,a publication of the Ghana Investment Promotion Centre (GIPC)

infoDev 11 “Draft” Executive Summary

 1.3.4 Environment Driver

External environment refers to the Legal and Regulatory set-up. The attitude and support of
government and other related administrative bodies in terms of policies, procedures, ease of
getting approvals, incentives, exemptions, special benefits, ease of handling, etc is relevant in
reducing the ‘pain-points’ of doing business in a particular location. The following table
addresses the strengths and weaknesses of Ghana in the Environment Driver and includes
recommendations for developing a facilitative environment for the ITES-BPO industry.

Strengths Weaknesses
• Financial structure in Ghana is healthy and • Ghana has high inflation and interest rates
investor friendly and an artificially strong cedi
• Several incentives are in place to benefit • As a result the financial environment is not
foreign ITES-BPO investors including conducive for domestic entrepreneurs
Income tax holiday for a period of ten years • Though Ghana is relatively low on geo-
from start of operations (if registered under political risk, the perception is otherwise
GFZB) and Double Taxation Agreements because of the overall image of the region
9
(DTA) signed with France and the UK • There are no special provisions for the
• Government of Ghana is taking steps to ITES-BPO industry. The GIPC Act (1994),
develop through World Bank sponsored the Ghana Free Zone Act (1995) and
studies on developmental steps for the IT/ ICT4AD policy do not include any
ITES-BPO sector, required in line with provisions or incentives for the
requirements from investors development or promotion of ITES-BPO
• Ghana can also leverage its favourable time • There is absence of a common framework
zone. It follows the GMT standard or strategy linking all of the Government’s
providing `real-time’ offshoring capability efforts for developing and promoting the
to companies in UK. It offers US a good ITES-BPO industry despite best intentions
“time fit” with a four-seven hour difference • Unionism is perceived to be active and
depending on the time zone, and a five- present by foreign investors
seven hour difference with Asian countries • There are currently no cyber security laws
• Ghana has high political stability and in place
internal security is not a concern for
investors
Recommendations
• Reposition ITES-BPO /Services vis-à-vis Agriculture and Manufacturing Sectors
• Simplify set-up procedures and related regulations; provide single window clearance and
support for ITES-BPO investors even established in areas outside the Free Zones
• Develop a comprehensive economic and policy package for facilitating growth of ITES-
BPO
• Setup an ITES-BPO Secretariat under the aegis of the Ministry of Communications to
facilitate investment, promotion, infrastructure and policy development for ITES-BPO
• Develop and implement an integrated and effective ITES-BPO investment promotion
strategy - marketing Ghana as an ITES- BPO destination
• While Ghana has already developed cyber laws and e-crime legislation for data protection

8
GISPA reduced full circuit E1 costs for its members from $10,000 to $7,000 per month in February 2006 (Source: Interview
with Eric Osiakwan, GISPA)
9
Double Taxation implies that an investor residing in one country and doing business in another country is taxed by both
countries on income earned by him/ her. Hence a Double Taxation Agreement implies that the foreign investor will be only
taxed in the country of residence and not in the country of operation

infoDev 12 “Draft” Executive Summary

 and security, the Government should ensure that this is introduced and implemented on a
priority basis

1.3.5 Clusters Driver

A cluster is defined as a concentration of companies and sub-industries in a geographic region

that are interconnected by the industry they serve and the products they produce. The following
table addresses the strengths and weaknesses of Ghana in the Clusters Driver and the
recommendations for developing ancillary industries for ITES-BPO establishments.

Strengths Weaknesses
• All factors of production (for setting up an • Private training institutions in Ghana are
ITES-BPO facility) are available locally in mainly providing training related to IT and
Ghana Networking and not ITES-BPO skills
• Some prominent training institutions, • As a result, incumbents have to invest
providing programs for the IT/ ITES-BPO heavily into in-house training leading to
sectors have developed including NIIT, high costs, bench as well as lack of talent
Aptech and Kofi Annan Center of pool creation
Excellence in ICT • Absence of an organized recruitment sector
• There are increasing opportunities available in Ghana impedes efficient, timely and
for financing from international sources cost-effective hiring, a critical requirement
including venture capital firms, bilateral of the people-intensive ITES-BPO industry
and multilateral donor agencies • Real estate consultants, developers,
architects need to up-skill to meet
international standards
• There is an inactive trade association
resulting in lack of a concerted effort
towards knowledge exchange and strategy
formulation
Recommendations
• Create a nationwide training infrastructure incorporating public and private educational
and commercial and educational institutions
• Publish a set of well laid down criteria in terms of academic curriculum (as per
curriculum guidelines for ITES-BPO vocational/supplemental training), infrastructure,
teaching faculty and methodology for Training institutions in the private and public sector
that wish to provide ITES-BPO training to prevent mushrooming of ill-equipped training
institutes which do not impart quality education
• Inventorize and rationalize sources of capital and financing
• Develop potential ITES-BPO destinations other than Accra, such as Cape Coast, Winneba
and Kumasi

1.3.6 Incumbents Driver

Incumbents refer to businesses in the relevant industry sectors that are already established and
operating in the country. Established businesses can provide immense insight about what works
and what doesn’t. The following table addresses the strengths and weaknesses of Ghana in the
Incumbents Driver and the recommendations for developing incumbents in Ghana.

infoDev 13 “Draft” Executive Summary

Strengths Weaknesses
• Presence of a `big-name client’ (ACS) that • There has been a generally low level of
has expanded operations nearly ten fold incumbent presence in spite of early
since its set-up in 2001 offshoring activity (ACS in 2001)
• Ghana has the availability of domestic • Absence of formal linkages with
ITES-BPO organizations such as Exzeed established ITES-BPO destinations and of
which are interested in establishing an experienced players (other than ACS) in
offshore model the market, has not allowed the local or
small entrepreneurial set-ups to learn from
best practices and experiences of others
• The lack of service provisioning maturity
results in problems faced by the industry on
account of service quality, work planning
and productivity issues
Recommendations
• As an industry association (Outsourcing Association of Ghana) already exists it may be useful
to look at its current state and evaluate whether this can be used after due modification and
diligence
• Else, facilitate the creation of an “ITES-BPO Industry Association”, an autonomous
association, with a primary membership comprising only ITES-BPO industry incumbents in
Ghana and secondary membership from cluster organizations
• Train ITES-BPO companies on quality and establishing a Global Delivery Model by
adopting industry benchmarking systems to measure against global standards
• Develop an enabling environment for small ITES-BPO businesses through training,
incentive schemes, incubator centers and access to venture capital
• Encourage, promote and develop strong linkages and tie-ups with companies, industry
associations and private education service providers in established destinations such as India
and Philippines and also regional hot-spots such as Mauritius and Egypt

1.4 Suggested Target Markets and Segments

1.4.1 Ghana’s "National ITES-BPO Offer" or Value Proposition

Based on our experience and understanding of ITES-BPO market at large, its dynamics and
potential, we have defined three possible `value disciplines 10 ’ that we believe a country could
adopt to build its unique positioning and strategy in the ITES-BPO market. These are:

• Scale/Volume play
• Niche/Product leadership
• Operational excellence

Ghana’s current capabilities, its latent strengths, hindering weakness and market perception are
the crux to our determining “Niche/ Product leadership” as Ghana’s "National ITES-BPO Offer"
based on the concept of sustainable competitive advantage. Developing a Niche/ Product
Leadership involves:
• Operating in a particular niche and developing ‘product leadership’

10
Adapted from the `Treacy and Wieserma Model of Value discipline’

infoDev 14 “Draft” Executive Summary

 • Setting quality standards

1.4.2 Market Opportunities for Ghana

In the dynamic world of ITES-BPO, prevailing concepts and definitions are continually being
challenged as market players redefine the boundaries of ITES-BPO and therefore there are
various evolving and latent opportunities that late entrants such as Ghana can adopt and exploit.

Based on the value proposition that we have defined for Ghana, we have identified the following
market opportunities or niches for the country as an ITES-BPO destination:

Niche Area Drivers

Regional Shared Services • Position as business “Gateway to West Africa”

Centre for West Africa
Primary offshoring hub
for Medical Transcription,
Coding, Billing and Data
Processing (Entry,
Conversion and Transfer)
work
Sub-Contracting hub for
established ITES-BPO
locations
Complementing South
African ITES-BPO
operations
• Stable and peaceful economy
• Improving macroeconomic situation
• Free market economy with an emphasis and commitment
towards private sector led development
• Positive investment climate with attractive incentives
• Positive perception with the world business community
• Increased economic cooperation and coordination with the
region through ECOWAS and WAMU treaties
• Experience in delivering these services
• Critical mass available to increase scale
• Low complexity, low infrastructure (relative to voice
processes) intensive work; enable domestic entrepreneur
participation
• Typically high-volume work
• Other African ITES-BPO destinations focusing on voice
processes; clear opportunity in non-voice for the region
• Established destinations unable to sustain cost arbitrage for
such work as they move up the value chain
• Mature destinations plagued by escalating salary levels and
high attrition rates
• Movement up the value-chain leading these countries to
focus on mid-high level work
• Established destinations such as India, Philippines and China
looking to subcontract work like data entry, data conversion
and data processing to more cost effective destinations due
to non sustenance of the cost arbitrage
• Increasing requirements by clients to have global footprints
so as to mitigate country and region specific risks
• South Africa is the largest economy in Africa, and also the
most established in the ITES-BPO market
• It has a significant pool of skilled workers but is plagued by
high emigration and low appetite for working a 24*7 shift
• Labour market perceived by foreign businesses to be
relatively inflexible
• Not competitive on salary cost aspect when compared with

infoDev 15 “Draft” Executive Summary

Niche Area Drivers

destinations in Asia and East Europe

• The focus is on voice/ contact centre processes
• Ghana seen as a familiar and secure business centre by South
African businesses; hub for South African companies
seeking to do business in West Africa with more than forty
South African companies doing business in Ghana 11

1.4.3 Target ITES-BPO Segments for Ghana

Based on our study of Ghana, the suggested value proposition and the niches identified, we have
identified the following ITES-BPO segments for Ghana to target. The following illustration
depicts the service sectors and functions within each sector that Ghana should focus on in the
short and the medium term:

Table 1.4.3.1 Target ITES-BPO Segments for Ghana

Targeted Opportunities For Ghana

Vertical Based Services

Functions

Finance& Human
Banking Insurance Health care Telecom
accounts Resources

• Indexing • Indexing • Indexing • Indexing

• Indexing • Indexing
Shared Services function

• Data • Data • Verification • Data

• Data Verification • Verification
Medical Transcription

Verification Verification • Order Verification

• Data entry • Image keying
• Data entry • Data entry management • Time and
• Loan Processing • Transcription
Data Conversion

• Account • Invoice attendance

Short Term
• Check • Claims processing • Translation
processing payable Processing • Employee Data
• Application • Invoice processing
Data Entry

• Loan • Account • Billing Management

Processing • Medical billing
Processing receivable • Leave Tracking
• Member
• Mortgage • Invoice • Invoice
management
processing Processing Processing
Customer Support

Inbound/outbound customer services, help desk, Product inquiries , (Sale, services &
Medium Term
Services (Voice/

reminders) ,ticket logging, collection support

E-Mail)

1.5 M&E Indicators

11
Source: SA Institute of International Affairs (SAIIA) survey. This includes AngloGold, whose merger with Ghana's
Ashanti created the world's second-largest gold mining company, food retailer Shoprite, brewer SABMiller, and a number of
smaller companies involved mostly in the supply of goods

infoDev 16 “Draft” Executive Summary

As enumerated in earlier sections, the ITES-BPO industry can make a significant contribution
towards employment generation in a country. However, the rate of growth for the industry is
highly dependent on the level of institutional and government support extended towards the
development of the sector and the relative stage of development of the ITES-BPO sector in a
country.

1.5.1 ITES-BPO Workforce Projections

Taking into consideration both the parameters of expected government initiative and current stage
of development of the ITES-BPO industry, we have provided projections on the impact of the
ITES-BPO industry on job creation in Ghana.

The projections made are based on three scenarios:

• S1: Realistic Growth

• S2: Optimistic Growth

• S3: Conservative Growth

Figure 1.5.1 ITES-BPO Total Employment Projections for Ghana

Projected Growth of Total ITES Employment in Ghana
40,000
36,910
35,000
30,000
25,000 24,727
20,000
16,565
15,000
9,011
10,000
9,011
5,000 2,200
6,037
0
Y0 Y3 Y5
S1 S2 S3

As per the diagram above, the employment generation in the ITES-BPO sector over the next five
years assuming a realistic growth rate is projected to be 24,727, assuming an optimistic growth
rate it is 36,910 and in a conservative growth scenario this will be 16,565.

Table 1.5.1 ITES-BPO Total Employment Projections for Ghana

EMPLOYMENT PROJECTIONS FOR ITES-BPO

2005 - Y0 Y3 Y5
S1 2,200 9,011 2,427
S2 2,200 9,011 36,910
S3 2,200 6,037 16,565

The ITES-BPO industry is also a high employer of women. Currently the female to male ratio in
Ghana’s ITES-BPO industry is 70:30. This is expected to rationalize to international standards of

infoDev 17 “Draft” Executive Summary

around 65:35 resulting in a female workforce of 16,073 in a realistic scenario, 23,992 with an
optimistic growth and 10,767 in a conservative growth scenario.

Table 1.5.2 Projections for Women in ITES-BPO in Ghana

PROJECTIONS FOR WOMEN IN ITES-BPO

2005 - Y0 Y3 Y5
Ratio 70:30 65:35 65:35
S1 1,540 5,857 16,073
S2 1,540 5,857 23,992
S3 1,540 3,924 10,767

Based on the above mentioned employment projections as well as an estimated revenue

contribution per employee per annum, the revenue projections for Ghana’s ITES-BPO sector will
be as follows:

Table 1.5.3 Projections for ITES-BPO Revenue Generation in Ghana

ITES-BPO INDUSTRY REVENUE CREATION

USD Million Y3 Y5
S1 180.22 494.53
S2 180.22 738.20
S3 120.74 331.30

1.6 Conclusion
With one of the most competitive demographics in the ITES-BPO world, Ghana has the potential
of developing itself as the preferred ITES-BPO destination in the region. The country benefits
from a stable and supportive political scenario as well as a latent talent pool which, if trained can
provide the necessary scale for growth of the industry.

Ghana can develop itself as a niche player developing product leadership in specific ITES-BPO
verticals and processes. Moreover, the country can exploit collaboration opportunities with
relatively more established destinations such as India and South Africa in order towards sub-
contracting or providing complementary services.

However, in order to achieve the desired success, Ghana will need to work towards ensuring the
development of cost-effective and suitable infrastructure. Moreover, the country will need to
ensure that initiatives are undertaken in order to develop the talent pool, as well as introduce the
necessary policy and regulatory framework. Therefore, high growth aspirations will demand that
adequate actions be taken to ensure that supply-side constraints do not prevent it from realizing
the potential of the opportunity.

In the scenario that Ghana is able to successfully distinguish itself as an ITES-BPO destination
amongst other emerging locations the sector will lead to an employment of 36,910 and a revenue
creation of around USD 738 million over the next five years.

infoDev 18 “Draft” Executive Summary