Kenya emerges as AI outsourcing hub, creating jobs amid challenges
LAGOS, KENYA — Kenyan firms are capitalizing on the booming AI-powered outsourcing market, generating thousands of jobs in a country grappling with youth unemployment.
While the sector shows immense growth potential, concerns over labor conditions and the long-term impact of AI loom over its rapid expansion.
AI outsourcing boom fuels job creation
Kenya is emerging as a key hub for outsourcing AI services, with firms like Nairobi-based Cloudfactory leading the way. The firm has grown since its launch in 2014, as it now handles complex AI workloads, including reading medical scans, examining insurance-related damage, and verifying carbon offsets.
As it stands today, it has 130 full-time employees and 3,000 freelancers, demonstrating how an AI-related job can bring employment opportunities to the country, where 80% of young people are drawn to low-paid informal employment.
Cloudfactory Kenya director Festus Kiragu emphasizes that AI still requires human oversight. “We still need people to tell machines what to do and verify what they produce. And that is creating jobs—lots of jobs.”
With one million Kenyan youth turning 18 annually, the demand for such opportunities is critical.
Traditional outsourcing is also thriving, as seen with CCI Kenya, which employs thousands in customer service roles for United States firms. Chief Executive Officer (CEO) Rishi Jatania, who started as an agent, highlights these jobs as stepping stones for career growth.
Growth potential meets labor and ethical concerns
Africa currently holds just 2% of the global outsourcing market, but rising wages in India and the Philippines are prompting firms to shift their operations to Kenya. The country’s English-speaking, tech-literate workforce and strong internet infrastructure make it an attractive destination.
Consulting firm Genesis projects that Kenya’s outsourcing workforce could nearly triple to 100,000 in three to four years—if the government provides support through policies such as tax breaks and cheaper work permits.
However, the industry faces criticism regarding working conditions. A recent Kenyan court decision has enabled Meta to be sued on account of poor working conditions at its outsourcing partner, Sama, highlighting the issue of employee welfare. Critics claim that certain foreign companies exploit cheap labor without contributing to local economies.
According to Jatania, human interaction remains essential in complex customer services, suggesting a balance between automation and human functions is necessary for stable development.
The AI and outsourcing boom in Kenya presents a solution to youth unemployment through an encouraging economic trend; however, issues of fair labor practices and the disruptive nature of AI must be addressed. The country could also position itself as a global outsourcing powerhouse with robust policies and business ethics.
