 "As business from West takes a hit, Indian IT firms explore African market")
The IT slowdown in the US and European markets is prompting firms to explore other options globally. Top IT companies like Tata Consultancy Services (TCS) and Infosys have announced significant deals on the African continent, according to a report in The Economic Times (ET). A market research firm specialising in the IT sector stated that technology-related spending in the Middle East and African markets is set to reach $30 billion by 2027, the newspaper reported.
So far, Indian IT firms have already captured around 6-7 per cent of the market. This includes large spenders on technology such as government departments, banking and financial services, retail, mining, and integrated infrastructure, among others. Dharmender Kapoor, chief executive at Mindspirit, told ET, "As Indian IT companies experience a short-term growth slowdown in the mature markets of the US and Europe, they are increasingly exploring opportunities to expand into other regions."
Kapoor added that the African continent holds a relatively small share of less than five per cent in global IT outsourcing.
In a recent development, TCS expanded its partnership with the Johannesburg-based Standard Bank Group (SBG) to standardise its custody and securities settlement operations in more than 15 markets. It also plans to run all of the bank's critical operations on the cloud by 2026, the ET report stated. SBG operates the largest custody network in Sub-Saharan Africa, with $635 billion in assets under custody and administration.
Similarly, Guaranty Trust Bank has selected Infosys' Finacle digital banking suite for its digital banking operations in 11 markets in Africa, including its home country, Nigeria, the ET report added.
Research firm IDC's forecast suggests that the Middle East and Africa (MEA) market will grow at a compound annual growth rate (CAGR) of 5.9 per cent during 2023-27, reaching $38.1 billion in 2027.