TechCabal Daily -👨🏿‍🚀$200 million in bribes

28 MARCH, 2022

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KENYA UNVEILS A $27 MILLION DEVELOPMENT CENTRE

Last week, Kenyan president Uhuru Kenyatta unveiled the $27-million Microsoft Africa Development Centre in Kenya. 

The centre adopts green energy and self-sustainability solutions including self-heat regulating windows, a mini solar plant that will power the facility and a water treatment facility to recycle and purify water.

The news comes 3 years after Microsoft opened up its first two development centres in Lagos and Kenya. 

What’s it for?

The Centre is aimed to help build and develop tech talent. 

A recurring conversation and complaint Africa’s tech ecosystem has had is the talent gap. On one hand, there are millions of unemployed people on the continent, and on the other, there are open tech jobs that require skills many don’t have. 

Kenya’s new development centre is aimed at bridging that gap by building talent. To hear President Kenyatta say it, the centre, “…will build a local world-class talent and create innovative technological solutions that will yield global positive impacts [sic]”.

The president also announced that Microsoft would partner with local universities and start-ups to provide training and skills to create job opportunities for over 200,000 young Kenyans. 

At the launch of the first centre in 2019, Microsoft pledged to hire 500 engineers by 2023 across Lagos and Kenya to help with the development centres. According to Microsoft Vice President Joy Chik, over 570 engineers have been employed already working on different projects including digital identity, mixed reality, and even Microsoft 365. 

Meanwhile, in Lagos, Microsoft opened a new office that will house its Lagos ADC. The 11,000sqm office will be shared with Facebook.

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MICROSOFT ACCUSED OF BRIBERY IN AFRICA AGAIN

Speaking of Microsoft, some hefty allegations were laid against them on Friday.

A whistleblower—ex-Director for Emerging Markets Yasser Elabd—alleges that Microsoft takes over $200 million annually in bribes in Africa and the MENA region.

Elabd, who worked for Microsoft for 20 years before his employment was terminated in 2018, believes that employees, partners, and government officials with connections to the big tech company are funnelling money from Nigeria, Ghana, Saudi Arabia, Qatar and Zimbabwe. 

What’s more, it’s not the first time such an allegation has been made. 

Quick, remind me of the first time

In 2018, another whistleblower signalled the US Securities and Exchange Commission (SEC) to a dodgy deal between Microsoft, South Africa’s Department of Defence (DoD) and EOH Mthombo, a South African IT and consultancy agency that sells Microsoft licenses. 

It was found that EOH Mthombo had underpaid Microsoft about R41.7 million (about $2.8 million) for a procurement deal it had signed with the DoD. While it appears that Microsoft was on the receiving end of this deal, the whistleblower claims that Microsoft employees were in on it. 

And now

Ex-director Elabd, who believes he was fired for asking too many questions, alleges that many more bribery deals accompany Microsoft’s operations in Africa and MENA. 

In Nigeria, Elabd claims, the Senate of the Nigerian parliament complained that Nigeria had paid $5.5 million for Microsoft licenses that were nowhere to be found. 

In Cameroon, the government had also supposedly purchased 500,000 3-year OfficeAcademy subscriptions that disappeared. 

Similar events, as Elabd claims, have also occurred in Qatar where the government paid $9 million annually over 7 years for Microsoft Office subscriptions it’s Ministry of Education wasn’t using. 

Other occurrences also happened in Kuwait and Saudi Arabia.

While some of these allegations like the Qatari one have been confirmed by auditors, others have not. 

What’s Microsoft saying?

In a response to The Verge, Microsoft says the allegations are years old and have been dealt with. 

“We believe we’ve previously investigated these allegations, which are many years old, and addressed them. We cooperated with government agencies to resolve any concerns.”

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TC INSIGHTS: AFRICA’S OUTSOURCING POTENTIAL

Chinedu is a self-taught software developer living in Enugu, Nigeria. Frustrated by his inability to secure a remote job, he plans on switching career paths.

The global IT services outsourcing market size was valued at $520.7 billion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 7.7% from 2020 to 2027. According to LinkedIn, about 150 million new technology jobs will be created across the world over the next five years. These jobs are likely to result in a battle for overseas talent.

Why then is Chinedu unable to partake of this largesse? First, he is in competition with foreigners from countries such as India and Ukraine who boast of an IT export volume of about $34.8 billion and $6.8 billion respectively. 

While his competitors from the aforementioned countries have had the benefit of working on complex and large projects, the same can not be said of Chinedu. “Tech talents in Africa are mostly seen as junior-level due to their project exposure levels,” Femi Taiwo, CEO of Teraworks, said in a chat with TechCabal.

The issue of trust that hangs around recruiting tech workers from African countries also affects his chances of securing a job. 

To solve both issues, talent outsourcing firms should adopt the escrow option. The escrow option ensures that developers who are matched with foreign companies duly deliver on the job.

Similarly, the success of Ukraine and India as outsourcing giants is tied to the adequate government support tech talents in those countries received. 

“Although tech talents in Africa are already reaping the benefits from the opportunities presented by government tech programs and tech zones, there is a need for more public-private partnerships and tax breaks for local outsourcing firms to further create an enabling environment,” Femi Taiwo further added.

Doing this will ultimately make Africa a preferred destination for tech outsourcing, thereby earning income for governments across the continent in form of tax and creating job opportunities for young people like Chinedu.

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