NASSCOM 3 rd Business Delegation to Africa

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1 NASSCOM 3 rd Business Delegation to Africa As a part of NASSCOM s Global Trade Development Initiative to explore new geographies for its members NASSCOM organized its 3 rd delegation to Africa (Nigeria, Uganda and Kenya). The emphasis of the NASSCOM delegation was on creating awareness among the local stakeholders local governments, local companies about India, identifying potential companies for partnership and building a long term engagement program. The delegation to Africa is very much in line with the objective which was outlined by the NASSCOM McKinsey study Perspective 2020 a couple of years ago. The study clearly states about an altered Landscape, future global megatrends and redefined market! Currently, the Indian IT industry gets close to 80% of its revenue from the traditional markets of US and UK. These markets are on incremental growth but going forward a large chunk of business would be driven by opportunities outside the current core markets, verticals and customer segments. Over the past couple of years, Africa has been one of the fastest growing markets worldwide in ICT adoption and communication technology and has the potential of becoming one of the most important markets for the Indian IT industry. The liberalization of Africa continues and most countries have established regulatory bodies to ensure a fair, competitive and enabling environment. Governments and Businesses that were apprehensive till some time back have realized the potential of ICT and are willing to invest in this sector. Africa s IT market is headed for

2 growth in , and market levels are expected to reach $26.53 billion in 2014, setting in motion a number of key trends that will reshape the IT landscape in Africa. The reforms path adopted by many countries in Africa and addition of significant broadband capacity with installation of undersea cables is unlocking huge demand of ICT services in multiple domains both at the macro economic level as well as policy levels. Nigeria is the second biggest economy in Africa and is the largest in terms of its population and opportunity. Lagos, Nigeria ITAN The IT association of Nigeria organised a Summit/networking event for the NASSCOM delegation. The ITAN president - Mrs. Florence Seriki, President, stressed the need for co-operation and expressed that partnership in the area of IT and ITES will position Nigeria as the foremost Outsourcing destination in Africa in the more than US$600 billion market of which only about 25 per cent have been served. Some of the points that she raised with the delegation were:- 1. At the government level - How can Nigerian govt. participate to accelerate the adoption and development of IT industry in Nigeria. 2. How can NASSCOM and ITAN work together 3. How can the software industry be developed by Nigeria for Nigeria The ITAN event was well attended by local Nigerian IT companies. Abuja, Nigeria In Abuja, the delegation met Prof. Cleopas Angaye, President, NITDA and discussed the possible ways of collaboration. It was stressed that the interaction between the Indian IT industry and Nigerian IT industry has to be defined, definite and constant.

3 The NASSCOM delegation led by Mr. Som Mittal, President NASSCOM met with Mohammed Namadi Sambo, Vice President of Nigeria. The meeting was brief but quite impressive as the discussion revolved around creation of policy and regulatory framework conducive to fostering business environment. They also discussed focus on Capacity and Skill building

4 The Indian High Commission in Abuja organised an excellent meeting with stakeholders in Trade & Industry namely NIPC, ABUCCIMA, Kano & Kaduna Chambers of Commerce, ECOWAS etc at High Commission of India, Abuja's Chancery premises which was followed by a Dinner. Kampala, Uganda In Uganda, the NASSCOM delegation participated at Uganda's first Leadership Conclave - focused on providing a platform to select regional CEOs, CIOs, Business Leaders and Govt officials to discuss about transforming and optimizing businesses through the leveraging regional sourcing. The selected topics to be covered in the two day event included: Global Trends & Regional Opportunities; Existing best practices, and current engagement models in global sourcing; Global sourcing benefits and Emerging industry standards and capabilities. Nairobi, Kenya The Kenya ICT Board was the anchor and host to the NASSCOM delegation to Nairobi, Kenya and had organized all the knowledge sessions and the networking meetings for the delegation. The NASSCOM delegation received presentations about the incentives and the tax concessions given to companies setting up offices in Kenya; presentations about the up-coming tech parks KONSA Technology City; and presentation about the young and vibrant workforce available in Kenya, along with the efforts put in by the government/universities to provide a regular flow of skilled and educated professionals. Testimonials of doing business in Kenya were also shared by some of the delegates which were part of the NASSCOM delegation to Kenya last year like Iridium There were a lot of learning from the delegation visit to Africa 1. It was a pleasant surprise to notice that the English is almost spoken as the first language 2. While talking to the Indian companies, it was also realized that - Indian companies need to have a local partner in Nigeria to front end their business. 3. You have to invest time and effort to identify a good partner. The process might be time consuming and tedious but it is certainly rewarding, as the profit margins are high in Nigeria. Key takeaways from the NASSCOM delegation visit in September The African countries like India want to move from an Agriculture based economy to a Knowledge based economy. Most Governments in Africa committed to use ICT in most of its activities in order to facilitate the rapid socio-economic development 2. The African countries are well supported by the local Governments and ICT is being looked at as a priority sector. 3. The African countries are also being funded by the World Bank and the African Development bank to initiate the adoption of ICT in various govt. departments and initiatives 4. Brand India: The Indian IT companies are well recognized and appreciated and there is an eagerness to work with IT companies. High respect for Indian companies and professionals

5 5. The associations itself in all the 3 countries look at NASSCOM as a mentor to help them organise their local IT industry and do a similar branding as NASSCOM has done for the Indian IT industry 6. Government incentive and Support: Governments offering heavy incentives and tax benefits for investments in ICT including IT / BPO services. Favorable policies & red carpet welcome for ICT companies can be expected in most countries 7. As last year there were companies in the delegation which did not have Africa as their focus geography, but were part of the NASSCOM delegation because they were just vaguely aware about the opportunities. But seeing the opportunities they companies certainly plan to visit Africa again with a strategic plan. 8. Some of the main opportunity areas are and these are just to name a few Telecom/Mobile telephony BFSI sector egovernance Education/skill or capacity building Healthcare 9. Parallels were drawn between India and China and the investments that the countries are making into Africa but the strong differentiator was as listed below:- a. Much of the economic activity between African countries and India is being led by the private sector out of India. For China - the government is leading the charge. b. The Indian private sector seems to have an edge with the Africans as they are employing local people and helping to improve local infrastructure. For China, it is Chinese to fill the majority of roles, not giving many opportunities to locals 10. Africa cannot be taken as a heterogeneous market/region. It has over 50 countries with different, individual characteristics. Opportunities exist in the IT, BPO as well as skills development space. 11. The World Bank is helping many countries in Africa and mobilizing funds to come at par with other nations. ICT is the focus sector as it cuts across all businesses and can add value in all sectors