Nigeria’s low labour costs and expanding talent pool are driving its rise as a major global outsourcing destination, according to a new report analysing trends in the business process outsourcing industry.
The report, compiled by Ataraxis Management using its Global Outsourcing Talent Index, ranked Nigeria sixth globally out of 193 countries, placing it among the world’s most competitive outsourcing markets.
It stated that Nigeria’s strong performance was largely underpinned by cost competitiveness, noting that “Nigeria and Egypt each score higher (98) than India (96) and Pakistan (97) in labour cost competitiveness.”
The report added that the country’s relatively low wage structure allows global firms to significantly cut operational costs. “Companies can hire MBA-level talent overseas, while saving 70-80 per cent on labour costs,” it noted, highlighting why emerging markets such as Nigeria continue to attract outsourcing demand.
According to the findings, Nigeria’s ranking reflects a combination of competitive labour costs, English proficiency, and growing talent availability, positioning it ahead of several European and developed economies in outsourcing competitiveness.
The report noted that Africa is becoming a key player in the global outsourcing landscape, with seven countries from the continent ranked among the top 25 destinations worldwide. It stated, “Seven African countries sit within the global top 25 outsourcing destinations… This means African countries account for 28 per cent of the world’s top 25 outsourcing destinations.”
Nigeria, alongside South Africa, leads this trend, with both countries ranked among the top six globally, reflecting a shift by global firms towards lower-cost, high-talent markets.