For Nearly 10 Years Paga Outsourced Its Engineering to Ethiopia, But is that about to Change?

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For Nearly 10 Years, Paga Has Outsourced All Its Engineering to Ethiopia, But Things are Changing

Nigerian mobile money service provider, Paga has just hired three Nigerian developers to support multiple product developments. Bayo Puddicombe, Zubair Abubakar and Daniel Micah joined Paga to help bolster its engineering ranks. Interestingly, all three engineers worked together at ChopUp, a gaming startup launched by Bayo and Zubair.

Bayo will lead Paga’s Digital Financial Services team as senior software engineer. Zubair will also use the same title as he heads the team developing APIs.

According to Paga CEO, Tayo Oviosu, this hiring represents the fintech’s first Nigerian-based developer team. This sounds awkward.

Why Paga Has Never Had Nigerian-Based Developers

Apparently, Paga has never had Nigerian-based developers handling its product development. All its engineering work has been outsourced abroad to Apposit, an Ethiopian IT company founded 10 years ago.

Now this raises a few questions about Paga and its growth story so far. Upon hitting the 11 million customer mark, Mr Oviosu thanked Nigerians for placing their faith in Paga. Isn’t it about time they reciprocated the honour?

For a startup, outsourcing your entire engineering work is usually not the first, second or even 100th choice on your to-do the list. The recommendation is usually to always start lean and agile. So startups start small and develop much of their tools and services in-house.

But Paga, it seems, has bucked this trend and has outsourced for 8 years now.

But the company said it has legitimate reasons for doing so. According to Mr Oviosu, “finding talent in Nigeria isn’t easy, especially engineering talent.” This statement is questionable.

Companies like Konga, Nairaland, Nairabet and others, all developed much of their products in-house. And former Konga engineer, Celestine Omin, stated that Konga even developed in-house solutions to avoid huge licencing fees. By the way, Celestine was locally trained, graduating from the University of Calabar.

But then again, Paga started 10 years ago. And back then, software engineering and local hiring were not as easy as they are today. With so many graduates from tech-related disciplines who have no idea how to use even Microsoft Word, local hiring was a mess. And unlike today, outliers (freelancers) still needed certification to prove their qualification.

Yet, that explanation is inadequate. But as it turns out, Paga’s Chief Technology Officer (CTO), Mr Eric Chikioke (a Nigerian working in Ethiopia), is a co-founder of Ethiopian based Apposit. And Mr Tayo explains that Apposit made investments in Paga and he in turn made the decision to trust the company with his engineering needs.

So it was a win-win deal. And this better explains why Paga never had Nigerian-based developers.

Paga Looking to Bring More Engineering Back to Nigeria

However, despite the win-win situation, outsourcing local development means developers won’t get to understand local behavior and how people interface with the technology completely. And Mr Tayo acknowledged this fact.

“However, by having the engineering team based in a market where we do not yet operate, we lose some level of empathy that is born of interacting with the product and users.”

Now, with the recent move to hire Nigerian based developers, Paga signals that it could be bringing much of its development work to the country.

Note that two of the new employees are development leads. As development leads for a new company, it is more practicable to have physical contacts with other team members.

And Paga says more local hiring will be done in by the first half of 2019.

Sounds like a good way to nurture more Nigerian tech talents, no?

We reached out to Paga for more insights on this story before publishing. They promised to send more information soon. But they were yet to do at the time this report was sent in.


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