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Remote working in Zim

Jacob Mutisi
In economics there is a concept called “comparative advantage”.

A less ambiguous way of explaining this concept is that for instance, say there are two countries, Zimbabwe and South Africa, and both countries are able to produce both maize and wine.

However, Zimbabwe can produce maize more efficiently than South Africa whereas South Africa can produce wine more efficiently than Zimbabwe, instead of both countries producing the two products for their consumption, the concept of comparative advantage suggests that each country should sorely focus on producing what it is better at producing and then both countries can trade the commodities.

The usual result is that the combined production and economic benefits will be more for both countries.

Zimbabwe used to enjoy certain comparative advantages back in the days when it used to be termed “the breadbasket of Africa” however over the years, the country has lost any comparative advantage it had and now importing almost all the goods it consumes while the local industry is thriving under artificial protectionism rather than natural comparative advantage.

For Zimbabwe to become bread basket of Africa again, it means that it is not merely a matter of being able to resuscitate its means of production but it is a matter of actually being able to produce more efficiently than those that are currently producing the goods and services we are currently importing, rhetoric which is easier said than done considering that our technology has become obsolete, we are marred by brain drain and our manufacturing costs are mostly  quoted in US dollars, one of the most powerful currencies in the world and to make matters worse we are on the verge of an increased threat from foreign competition as our government has gone on to ratify the African Continental Free Trade Areas (AfCFTA).

While the above may paint a gloomy picture on any prospects of the economic resuscitation of the country, there is a new industry that is fast emerging in the country and could be part of the solution in economic resuscitation and it is offshore outsourcing by remote work.

In our previous article entitled “The rise of digital business models and remote working and the need for better regulation in Zimbabwe” we highlighted the economic potential of remote work and outsourcing in Zimbabwe and also briefly highlighted the need for the government to support the industry.

In this article we explore the industry further particularly looking at what the countries which have succeeded in this arena have done.

According to a survey done by Statistica, India, China, Malaysia and the Philippines, Brazil and Mexico were identified as the top-5 countries for Business Process Outsourcing (BPO) in 2021.

The factors that determine whether a country is a good fit for BPO include the overall skills of a population, how easy it is to communicate and conduct business, and the state of the economy itself.

We can draw a few lessons from an analysis of these countries that top the BPO list. First of all, we can learn that a country doesn’t necessarily need to be a developed country in order to be a top destination for BPO.

India, The Philippines and Malaysia are all middle-income developing economies. However, there are other factors that make these economies standout.

One of the common characteristics that can be derived from analysing the toppers of the BPO list is their potential for cost savings and these mainly emanate from low average salaries.

The average salary in India is USD 424,64 per month and this means companies can obtain services in India at an averagely lower rate than elsewhere.

In Malaysia, hiring software engineers from a software development company would cost you an average of USD945,40 per month whereas hiring the same professional can cost you an average of USD9 103 per month in New York.

The other common factor that can be seen in India, The Philippines and Malaysia is good English proficiency amongst the population.

India has the second largest English-speaking population in the world, Malaysians ranked third on the English Proficiency Index for Asian countries in 2021 and The Philippines ranked 18 amongst 100 countries worldwide in the European Fellowship’s (EF) English Proficiency Index for 2021.

Another common factor that can be seen in these economies which complements the English proficiency is a skilled Talent pool.

India’s higher education system focuses heavily on science and technology, producing over 2,6 million STEMS graduates in a single year.

One might argue that these factors are also available if not even more lucrative in Zimbabwe.

In terms of cost savings, in Zimbabwe the average salary in 2021 was USD228 and Unesco set the adult literacy rate at 88,69% and it is common knowledge that English proficiency is quite high although the national skills audit conducted in 2018 revealed that the national skills level is around 38% with STEMS sectors having a skills gap of up to 95%.

While skills in STEMS are very low, the report revealed that commerce related skills exceed 100%, which presents a case that Zimbabwe has a merit to export labour.

A further analysis of other countries that are doing well in BPO also shows that there are certain factors those countries have that Zimbabwe needs to work on in order to improve and most of these need government support.

These include more investment in STEMS subjects, favourable tax laws, advanced data security, advanced digital infrastructure and outsourcing friendly laws. These are the things that countries topping the BPO list are doing right.

Regardless of the limitations and the potential that Zimbabwe has in the area, one thing is known for certain, other countries are seeing the potential of Zimbabwe in BPO and have begun hiring locals remotely causing major resignations in the local market.

There are a few local companies who are also beginning to see these opportunities as well and are also entering the market. There is definitely more the government can do to ensure that this new economic phenomenon benefits the locals and the Zimbabwean economy.

In conclusion, the writers argue, it might be easier for Zimbabwe to be the Business Process Outsourcing basket of the world rather than being the breadbasket of Africa again.

Our new comparative advantage could be in BPO hence the authorities and the industry titans need to put more attention to this industry and its potential. As Winston Churchill once said, “When the facts change, I change my mind. What do you do, Sir?”

  • Ndhlovu is a post-graduate researcher at Chinhoyi University of Technology (CUT) currently studying towards a Master of Philosophy in Accountancy at CUT under CAA sponsorship. He is also a full member of Acca and holds a Bachelor’s degree in Accountancy from CUT. This article is part of a research on export of labour research being commissioned by CAA.

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