Introduction:
Global Business Services (GBS) adopts a centralized and shared service model that provides support for a range of business functions to organizations that have business operations in different geographical locations across the globe. The concept has evolved over the years mainly due to factors like advancement in technology, globalisation of business operations, and ever-changing business needs. A shadow of the concept of GBS was seen in the 1990s when support functions such as HR, Finance and IT were consolidated and centralized under a concept called Shared Services. This soon evolved into what was called Business Process Outsourcing (BPO) between late 1990s and early 2000s where companies outsourced non-core functions to third party service providers so that that they could focus on their core business operations with the aim of increasing productivity at lower costs. Since then, the concept of GBS has fully emerged as a comprehensive and integrated approach to shared services encompassing a broader scope of business functions leveraging on technologies.
As a continuation of the ‘GBS focus series,’ put together by the Institute of ICT Professionals Ghana and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, this article provides further insight on Ghana’s GBS potential, the untapped opportunities, and how GBS has become a critical part of Ghana’s job creation and economic development agenda.
Ghana’s GBS Landscape
The earlier publications of this ‘GBS focus series’ have explored global and continental statistics that prove that the GBS sector is key in providing areas of employment and optimizing business processes. Countries like India have greatly benefited from prioritizing the GBS sector in that an estimated 7.7% of their GDP was attributed to GBS high paying jobs in 2022. The previous articles also highlighted that an estimated 1.02 million Africans have been offered GBS related jobs representing 2.5% of the global workforce.
The unemployment challenge and the GBS sector as a solution
According to data available from the Ghana Statistical Services website, about 14.7% of Ghanaians were unemployed as at third Quarter of 2023. Furthermore, the unemployment rate is higher for persons with secondary education and those with post-secondary education.
Currently, the government of Ghana and the private sector have not been able to provide sustainable jobs for all Ghanaians thus widening the unemployment gap. In addition, a critical mass of graduates with entrepreneurial skills finds it challenging to establish and run their own business due to limited sources of funding for initial capital. Thus, some form of preliminary employment is needed to absorb the teeming masses of unemployed young people in the country.
Therefore, the emergence and adoption of the GBS model is a goldmine for Ghana where the topic of job creation is concerned. Current statistics in Europe show the decline in the availability of IT talent, with figures from Germany revealing at least 137,000 vacant ICT positions in Germany. In addition to this, the ageing demographic in Europe demonstrates that there may not be enough talent to support key sectors in the future. The geopolitical crisis in Eastern Europe has also made it necessary to seek other locations for IT outsourced service delivery. In parallel, the traditional outsourcing locations for global GBS companies which have attained maturity, can no longer provide the competitive labor costs needed. These reasons are enough evidence that the global demand for the GBS sector is available, therefore, by positioning itself as an outsourcing location of choice, Ghana can create opportunity out of these global challenges.
Several Global GBS companies are already operating in Ghana, including Amalitech Ltd, E-services Africa Ltd, Inngen, WebHelp +Concentrix, Majorel, ISON Xperiences, Remoteli, Turntabl amongst others. These companies are currently serving the needs of the global GBS market in various capacities such as IT outsourcing delivery and BPO delivery. Togther with other companies working in this sector, Ghana currently employs around 19,000 people in the GBS sector. However, based on the global demand, and advantages Ghana possesses, this number demonstrates that there is an immense untapped potential.E.
Challenges facing GBS development in Ghana
While the country has made strides in cultivating a conducive environment for GBS operations, the number of active players and the overall sector size remain comparatively modest in relation to its potential. This disparity underscores the significant opportunity for growth and development within the Ghanaian GBS landscape and can be addressed by tackling key challenges.
The infrastructure on which the GBS sector runs is real estate, internet, and power. The fuel on which it runs is people. Therefore, to assess the suitability of the sector for global delivery, these are the key points to consider.
We therefore attempt to examine some of the current challenges below:
- Infrastructure deficits
The availability of reliable and high-speed internet is a cornerstone for the successful operation of a GBS sector. Ghana has made strides in expanding internet connectivity, with data available on statista.com showing Ghana’s internet penetration stands at 70% as at January 2024. However, the picture is still far from perfect. Issues such as inconsistent internet speeds, frequent outages, and high costs are pervasive thus, can hinder the efficiency and competitiveness of GBS operations. This challenge can also limit the ability of GBS companies to adopt advanced technologies and deliver high-quality services to their clients. Therefore, investing in the expansion and improvement of internet infrastructure is crucial for unlocking the full potential of Ghana’s GBS sector.
- Unreliable power supply
Unreliable and frequent power outages pose a significant challenge to the growth of Ghana’s GBS sector. Consistent power supply is critical for uninterrupted operations, data security, and customer satisfaction. The lack of reliable power infrastructure can lead to increased operational costs due to the reliance on backup power sources such as generators, which can be expensive and environmentally unfriendly. Moreover, power outages can disrupt critical business processes, affecting productivity and service delivery. Addressing these power challenges through investments in renewable energy and grid stability is essential for the sustained growth of the GBS sector in Ghana.
- Real Estate Challenges in Ghana’s GBS Sector
The availability of suitable office spaces for GBS operations is another critical challenge in Ghana. The demand for modern, well-equipped office buildings with adequate infrastructure (such as high-speed internet, power supply, and security) often outstrips supply. This scarcity drives up rental costs, making it challenging for GBS companies to establish and expand their operations. Additionally, the concentration of available office spaces in specific geographic locations can limit the growth of the sector outside of these areas. To overcome these challenges, there is a need for increased investment in commercial real estate development and the creation of GBS-specific office parks.
- Talent pool
Technology advancement is posing a challenge to the talent pool development in Ghana. Many of the unemployed populace do not have the requisite soft skills to brace the job opportunities that come with the development of the GBS model. Thus, there are many job openings available, but the skill and expertise required to fill them are scanty. Areas requiring sophisticated talent pools involve data engineering, data science, programming, telemarketing, telemedicine, data analytics, big data analytics etc. Many of our training institutions have not revised their curricula to meet the growing need of industry hence there is abundance of unemployed populace who cannot take advantage of the abundant opportunities being offered by the GBS development due to lack of requisite skills.
Government’s Efforts to support the GBS development
The government of Ghana has put in place some initiatives to support the digitalisation agenda which has an eventual bearing on the GBS model in Ghana. Some of these initiatives are:
- The Ghana Digital Agenda (2020-2025): provides a roadmap to the development of digital technology in Ghana. One such benefit of the program is the development of interoperability payment systems and platforms that makes it possible for Ghanaians to do remote works and have their salaries paid into their bank accounts or mobile money wallets.
- World Bank’s Intervention: the World Bank approved and paid about $200 million to the government of Ghana to support the Digital Transformation Agenda to enhance job creations through the increase in access to broadband services. The support also aims to strengthen the digital innovation ecosystem in Ghana to help create better jobs and economic opportunities.
- Ghana Rural Telephony and Digital Inclusion Project (GRT&DIP): Over 1,010 rural telephony cell sites have been built by the government of Ghana under this project. This affords persons living in remote location to have access to the internet to do remote jobs.
These are just a few of the government’s interventions to create a friendly digital ecosystem to embrace the deployment of the GBS model in Ghana.
Beyond these, the onus is on various stakeholders together with the government to put in support structures that can form part of a Ghana GBS development plan that focuses on inclusive and meaningful job creation and growth. For example, the Special Initiative ‘Decent Work for a Just Transition’, an initiative of the German Federal Ministry for Economic Cooperation and Development, implemented by GIZ has since 2019 provided support in capacity building programs to upskill young Ghanaian talent to serve the global GBS market. Other partners both state and non-state, also have a contribution and a role to play in ensuring that Ghana becomes the outsourcing location of choice. Therefore, a concerted effort is needed to strategically position Ghana with all the right advantages and unique propositions for global GBS service delivery.
Conclusion
The GBS delivery model offers the continent of Africa and Ghana the opportunity to bridge the unemployment gap by taking advantage of opportunities offered by countries that have employment deficits. The countries that recognized these models have taken the lead to boost their GDP growth significantly. Hence, Ghana should also consider putting in place effective policies to guide the delivery of these services to the mutual benefits of the citizens, the GBS organisation and the nation. If this is properly management, the envisaged challenge of brain drain in many sectors like the health and technology sectors will be greatly minimized.
This article is written in cooperation with the Institute of ICT Professionals Ghana and the Special Initiative “Decent Work for a Just Transition”, an initiative of the German Federal Ministry for Economic Cooperation and Development (BMZ) and implemented by GIZ.
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