Why Kenya? A new Kenyan startup helps entrepreneurs without internet access sell products online
SOKO allows artisans in the developing world to create online storefronts
“Emerging economies are really a hotbed of next-generation innovation.” – SOKO co-founder Gwendolyn Floyd
- The company uses an automated SMS form to let vendors sell their goods worldwide.
- SOKO currently has about 250 artisans on its website and is adding more through a peer recruitment model.
- The startup has raised $200,000 in grants and awards and almost $1 million in seed funding.
Why Kenya? IBM Launches New Innovation Center in Nairobi
Kenya is attracting the attention of global technology and communications investors
“Technology is playing a critical role in building stronger Kenyan and East Africa companies”
- Vision 2030 Delivery Board Director General Mugo Kibati
- IBM’s new innovation center will provide Kenyan entrepreneurs, developers, and academics with resources and training.
- The IT sector in Kenya has contributed up to 40 percent of the economic growth in East Africa in the past 10 years.
- Kenya’s IT industry is expected to grow 11 percent annually, increasing job opportunities for those with technological expertise and attracting outside investors.
Source: Captial FM
Honda Motor Co. created a subsidiary to produce and sell motorcycles in to meet local demand
Honda is building a new plant that is expected to open in September 2013.
“With its well-educated workforce and relatively strong tertiary education sector, the country is well positioned to create the right environment for advanced manufacturing and the high-wage high-skill jobs it brings with it.”
- Stepane Paquier, President, Dow Africa
- The plant will have an initial production capacity of 25,000 units per year.
- The Nairobi-based subsidiary is one of only three Honda has opened in Africa.
- Honda expects local demand to increase as Kenya’s economy continues to grow.
Sources: Japan Times, Business Daily Africa
Kenya just broke ground on Konza Technology City, the country’s future technology hub
The new city, which is being dubbed as “Africa’s Silicon Savannah,” is a $14.5 billion investment.
“[Konza] is expected to spur massive trade and investment as well as create thousands of employment opportunities for young Kenyans in the ICT [information communications technology] sector.”
- President Mwai Kibaki, January 23, 2013
- 20,000 IT jobs are projected to be created in Konza by 2015, and more than 200,000 total jobs by 2030.
- More than 250 foreign and local firms have already applied to invest in this project.
- Konza is part of the government’s Vision 2030 initiaive to improve Kenya’s infrastructure over the next 18 years.
Source: Business Daily, BBC
Kenya ranked third among African countries for foreign direct investment last year
Foreign direct investment (FDI) projects in Kenya increased 77% in 2011.
Quote: “This attests to the ongoing institutional reforms in the country, development in infrastructure projects and the human resource capacity in the country,”
- Esther Koimett, Investment Secretary at the Ministry of Finance
- In 2011, there were 55 FDI projects involving infrastructure, real estate, manufacturing and tourism – a 77% increase from the prior year.
- The increase came from companies seeking to invest in recent discoveries of oil and minerals.
- On the African continent, Kenya placed ahead of Nigeria and Egypt. In the East African region, Kenya was the number one destination for foreign direct investment.
Source: Daily Monitor
Kenyan economy forecasted to grow 5% in 2012 and 2013
Economic factors point towards investor confidence in Kenya.
“We believe with lower interest and inflation rates, macroeconomic stability and improved confidence, we think that 5 percent [economic growth] should be well within reach.” Domenico Fanizza, International Monetary Fund.
- September marks downward trends in inflation for 10 straight months, as lower food prices offset upward pressure from a jump in retail fuel prices. The Kenyan shilling has also held steady against the U.S. dollar.
- Kenya’s central bank began an easing cycle in July after inflation slid continuously since December and after the shilling stabilized against the dollar, restoring a measure of confidence in the economy and policymaking.
- Kenya’s central bank has a high buffer of reserves to $5.2 billion, which also builds confidence in the economy.
Kenya invests $25 billion in infrastructure to transport oil
New port, pipeline and roads will open up export routes, attract oil and gas investors
Quote: “Right now our interest rates are extremely attractive in a global context to bring investors in.” – Aly-Khan Satchu, CEO of Nairobi-based Rich Management Ltd.
• The Kenyan government has agreed with South Sudan to build a 1,243-mile pipeline to the northern Kenyan coastal town of Lamu, providing a critical secondary route for oil exports.
• It has opened a tender for the design and construction of the first three berths at Lamu, to be financed by the annual sale of 154.4 million of infrastructure bonds over five years.
• The Lamu project is part of the Lamu Port-Southern Sudan-Ethiopia Transport (LAPSSET) corridor project aimed at furnishing northern Kenya with roads, airports and a refinery, and help spur economic growth of at least 10 percent by 2030.
Appointment of developers marks major step forward for Konza Technology City
HR&A Advisors appointed to initiate the $7 billion development plan to build Konza into the “Silicon Savannah,” complete with technology companies, thousands of residential homes, a central business district and even a university.
Quote: “The implementation plan will recommend the appropriate strategies for attracting developers and private investment to the site. The construction of roads, utilities and buildings will follow subsequently.” – Shuprotim Bhaumik, partner at HR&A Advisors
- The first part of the four-phase development plan includes the construction of an IT business park, residential and hospitality facilities as well as a science park.
- Dr. Bitange Ndemo, Permenant Secretary of Information and Communications, says that the project has drawn interest from a number of foreign investors already.
- A high-speed rail and World Bank-funded 60km motorway will connect Konza to Nairobi airport, while a dam for irrigation and electricity generation funded by the African Development Bank will be ready in 2013.
Source: Financial Times
If Kenya was in the Euro-zone, it would have the third lowest debt ratio
- Based on the IMF fiscal monitor, if Kenya was a member of the Euro-zone, its debt-to-GDP ratio would rank only behind Estonia and Luxemburg.
- Kenya’s macroeconomic success is home-made. Through prudent fiscal policies—particularly strong revenue mobilization—and economic growth, Kenya has gradually brought its debt burden down 20 percent in five years.
- Kenya understands that what matters is not the absolute amount of debt, but its proportion to the overall economy, and has therefore been praised for its wise fiscal policies and sound budget management. Through its economic reforms, especially in the service sectors, it has managed to open up the economy and create a growth momentum that has benefited the country over the last decade.
Source: World Bank (blog)
Kenyan CEO James Mwangi was named Ernst & Young’s World Entrepreneur of the Year
- In a ceremony held in Monte Carlo on June 9, CEO and Managing Director of Kenya’s Equity Bank, Dr. James Mwangi, was named the Ernst & Young World Entrepreneur of the Year 2012. He was picked from among 59 finalists from 51 countries vying for the world’s most prestigious business award for entrepreneurs.
- Dr. Mwangi joined Equity Bank as finance director in 1994 when only 4 percent of the population had bank accounts. Now, 26 percent of Kenyans have one, and the bank manages more than 7 million bank accounts – over half of all bank accounts in Kenya. He became the bank’s chief executive in 2004 and he listed the bank on the Nairobi Stock Exchange in 2006.
- Dr. Mwangi’s sees Equity Bank as transforming the economy of the East African region with its focus on providing services to the “unbanked” poor. Meanwhile, through the bank’s foundation, it now funds several philanthropic initiatives including providing healthcare to 1.8 million Kenyans, 10,000 scholarships to educate orphaned and children in need, and 1,300 university scholarships.
Source: Financial Times
Source: Ernst & Young
World Bank says Kenya “is on track to reach middle-income status.”
The World Bank’s economic update on Kenya forecasts 5 percent growth in 2012, and found actions by the government successfully stabilized the economy.
Quote: “Kenyans have an opportunity to enjoy better standards of living as the economy progresses towards middle-income status in the coming years.” Johannes Zutt, World Bank Country Director for Kenya
- The World Bank report projects that inflation will remain below 10 percent during the second half of 2012.
- Interest rates are expected to fall and the exchange rate to return to “more competitive levels” that will spur economic activity.
- Strong growth of the East African Community has created opportunities for Kenya to reduce its vulnerability from external shocks.
Source: World Bank
Nairobi continues its growth as a regional hub
- FirstRand is the fourth bank to open offices in Nairobi in the past four years, along with companies like Samsung and Nestle
- The World Bank points to Kenya’s expanding working-age population, access to the sea, developing education system, and improving macroeconomic policies as qualities that make it perfectly situated for companies bent on regional expansion.
- The financial sector grew 8.8 percent in 2011
“We believe there’s a gateway, a pipeline of business that exists between India and Africa coming through Kenya,” – Jabu Khethe, head of Africa at FirstRand
Sources: Financial Times
Kenya leads its East African neighbors in judicial reforms
- The Doing Business in EAC (East Africa Community) Report compiled by World Bank and the International Finance Corporation cites the “case track” system introduced by the Judiciary in 2011 as one of the outstanding improvements in the region.
- The “case track” system categorizes cases into three groups depending on their complexity, allowing for the strategic allocation of resources to avoid delays in commercial disputes.
- In a bid to reduce congestion in courts and ensure speedy trials, the Chief Justice increased the limit of jurisdiction in certain courts to $6,000, to reduce the pressure on courts and reduce litigation and transportation costs. The inspection of serving judges and magistrates and the recruitment of new ones has also been put in place, to improve the legitimacy of the verdicts.
Source: Business Daily
Kenya has a sizeable and growing middle class
- A recent African Development Bank report found that “Strong economic growth in the past two decades has helped reduce poverty significantly and lift previously poor households into the middle class,” in Kenya and in other African nations.
- With East African economies among the fastest growing in the world, and Kenya’s own GDP growing at a 5% clip, the Kenyan middle class is expected to continue rising, bringing Kenya ever closer to its goal of becoming a middle-income nation by 2030.
- A burgeoning middle class has boosted Kenyans’ purchasing power, giving rise to a thriving mall culture and booming housing market, and a double-digit boost in domestic tourism.
Source: CIA World Factbook
Kenyan animators are using technology to reach a global audience
- Kenyan animators are now able to collaborate with production companies and other artists from around the world thanks to the arrival of fiber-optic cable in East Africa along with other technological advances.
- Nairobi-based “Homeboyz Animation” offers the most recent success story. The company worked with a U.K. production company and the BBC to produce the popular children’s cartoon “Tinga Tinga Tales” (pictured above).
- The future for Kenyan animators is bright. New opportunities for international collaboration, as well as rising demand for content from Kenya’s own broadcasters, means that entrepreneurs like Pete Mute, who launched the animation company “African Sci-Fi Factory,” will be able to share their work with larger and larger audiences.
Kenya has just announced the construction of a state-of-the-art geothermal power plant
- Kenya Electricity Generating Company (KenGen) will work with an international consortium to build a 280 megawatt geothermal plant named Olkaria IV, which is expected to be operational in 2014.
- The project, which enjoys international investment from the likes of The World Bank, Germany’s Development Bank KfW and the European Investment Bank, will help diversify Kenya’s energy base and reduce the country’s reliance on hydroelectric dams, whose output can drop during droughts.
- Already the first African country to drill for geothermal power, Kenya has set a goal of producing at least 5,000 megawatts of geothermal power by 2030.
Kenya now has its own YouTube domain, YouTube Kenya.
- YouTube announced the launch of YouTube Kenya (http://www.youtube.co.ke) in October 2011.
- The designated domain will make it easier for Kenyan users to find and view the most informative and entertaining video content from around the world through a local interface that promotes the content most relevant to Kenyans.
- Speaking at the Nairobi launch event, Permanent Secretary of Information and Communications Dr. Bitange Ndemo said, “Accessing relevant information and sharing helpful stories on the Internet is enabling people to learn, train and partner with each other to help better their lives.”
Source: IT News Africa
Kenya developers are creating innovative mobile applications.
- Simba Technologies has created an app called MedKenya, which delivers heath information to Kenyans via mobile phone. The company plans to launch an expanded version, called MedAfrica, to bring similar content to other countries on the continent.
- Since 2007, Kenyans have used the mobile banking platform M-Pesa to transfer funds via text messaging. (“M” stands for mobile and “pesa” is Swahili for money).
- In partnership with the World Bank and Nokia, Kenya recently created an “m-lab” to incubate more mobile application startups. According to Dr. Bitange Ndemo, the country’s permanent secretary of the Ministry of Information and Communications, thousands of young Kenyans are involved in app development.
Source: Mercury News
Google is partnering with Safaricom and Equity Bank to bring Kenya’s small businesses online.
- The Getting Kenyan Businesses Online (GKBO) project provides information and an online template for small and medium scale enterprise businesses (SMEs) to create their own websites for free.
- With 10.2 million Internet users in Kenya, Google Kenya Country Manager Olga Arara-Kimani said the initiative will transform the online SME business landscape and make a positive impact on the economy.
- The GKBO website is mobile and desktop compatible, allowing SMEs to personally manage their sites and update business information in real time.
Source: IT News Africa
Kenyan women are some of Africa’s most successful entrepreneurs.
Kenyan women are some of Africa’s most successful entrepreneurs.
- Forbes named Kenyan Njeri Rionge one of Africa’s “most successful and revered serial entrepreneurs.” Over the past 20 years, she has co-founded five multi-million dollar companies, including Wananchi Online, a leading Internet service provider that has become East Africa’s leading cable, broadband and Internet-based phone company.
- Rionge also founded Ignite Consulting, a thriving business consultancy; Business Lounge, Kenya’s leading startup incubator; Ignite Lifestyle, a health care consultancy; and Insite, one of Kenya’s most successful digital marketing outfits.
- Kenyan women are also committed to helping other African women succeed in business. The Kenya Women Holding offers business mentorship, leadership training and formal banking services to women to assist them in forming their own small businesses.
Sources: Forbes, All Africa
Nairobi serves as the African headquarters of a multitude of international companies.
- In July 2011, Pfizer, the U.S.-based pharmaceutical company, PricewaterhouseCoopers, and Posterscope, an outdoor advertising firm, all announced plans to establish a regional hub in Kenya’s capital city.
- General Electric, IBM, Google, LG and CocaCola have longstanding corporate bases in Kenya as well.
- Kenya’s vast talent pool, strong Internet connectivity and stable economic environment make the country an attractive destination for investors and have firmly established Nairobi as a center for business in East Africa.
Source: All Africa
Kenya is developing a “Silicon Savannah” to foster growth in the IT industry.
- Modeled on the United States’ Silicon Valley, Kenya’s plans to revolutionize the country’s dominance in the global information technology market include the development of a university, science park, offices and housing in the Konza Technology City, a 5,000-acre site.
- The development, to be ready by 2030, aims to have all the ingredients for entrepreneurial success in the same place in order to give local companies the opportunity to do business with multinational companies like General Electric and Microsoft, who have already established East African hubs in Kenya.
- Kenya’s existing IT initiatives have already propelled the country to the forefront of the industry. In Nairobi’s iHub technological center, 3,000 innovators collaborate daily to share their tech knowledge and develop new web applications. Home to four undersea fiber-optic cables, Kenya’s technology sector is growing by 20 percent a year, outstripping all of the nation’s other industries.
Source: The Financial Times
Kenya saw a 15 percent rise in tourism in early 2011.
- Tourist arrivals in the first quarter of 2011 increased 15 percent compared to the same period last year, with more than 300,000 visitors entering the country between January and March.
- In 2010, Kenya hosted a record 1.1 million visitors and hopes to see two million by 2012, said Tourism Minister Najib Balala.
- To tap into the flourishing market, international hotel companies, including Radisson and Crown Plaza, have invested in the construction of 17 new hotels in the country.
Sources: All Africa, All Africa, Ministry of Tourism
Kenya is an African leader in developing innovative information and communication technology (ICT) initiatives.
- Kenya recently hosted Connected Kenya, a three-day ICT conference to discuss the newest technology developments in the sector, how to improve connectivity across the country and how the government and private sector can adopt technology to improve services and reduce costs.
- Equity Bank announced at the Connected Kenya summit that it will launch a technology incubation and innovation center in Nairobi. The center will bring academia and technology together in the hopes of cultivating new application developers and helping them commercialize their innovations.
- Kenyan ICT companies and entrepreneurial developers have created a wide range of innovative technologies enabling Kenyans to use their mobile phones to do everything from accessing banking services and receiving medical test results to tracking their vehicles.
Sources: The Standard, IT News Africa, Business Daily Africa
Kenya’s flower exports have blossomed by double digits over the past twelve months.
- Shipments climbed 10 percent to 22,000 metric tons in the first two months of 2011, signaling the beginning of a positive trend for the year. Earnings also climbed 10 percent from the same period last year to Sh7.7 billion ($91.6 million).
- Better economic growth projections in Europe, the Kenyan flower industry’s key market, bodes well for continued increased exports. Kenya accounts for 35 percent of all flower sales in Europe.
- The industry is expecting a “very good” performance for the year as a whole, said Kenya Flower Council CEO Jane Ngige. “Most of the sales are secured in the euro, which means that returns have been favorable.”
Sources: Bloomberg, Business Daily Africa
Kenya has its own version of the discount group-buying site Groupon
- Rupu launched in December 2010 and offers discounts of 50 to 90 percent at over 150 restaurants in Nairobi, Mombasa, Malindi and Diani. Soon, Rupu will expand to offer discounts at restaurants in Zanzibar.
- Rupu benefits Kenyan consumers and businesses alike. Customers enjoy sharp price discounts while member restaurants benefit from free marketing and publicity, new customers and increased profits. The money from the sale of each deal is split 50-50 between the restaurant and Rupu.
- Transactions can be completed online or by mobile phone through the consumer’s M-Pesa account. Customers will also be able to purchase deals with credit cards later this year.
Source: Christian Science Monitor
Kenya is home to East Africa’s only women’s university
- Nairobi’s Kiriri Women’s University of Science and Technology opens doors for women in the traditionally male-dominated fields of math and science.
- The university engages its students in special seminars on women’s ability to excel and manage in the workplace, says Deputy Vice Chancellor Njeri Gikonyo. “When they graduate, they end up being very special and in that way, they make a name for themselves in the market,” she explained.
- Educators say girls’ and women’s access to education is improving in Kenya as the country strives to reach its UN Millennium Development Goals (MDGs) and Vision 2030 economic goals. Last year, girls made up 45 percent of Kenya’s secondary school enrollment.
Source: Voice of America
Kenya plans to transform Nairobi into a major international financial hub
- Kenya plans to build a major financial center in its capital to help establish Nairobi as an international finance hub, Finance Minister Uhuru Kenyatta recently announced. This endeavor will support the economic pillar of Kenya’s Vision 2030 plan to help the country become a middle income economy within the next two decades.
- Financial incentives will encourage investment groups, stock brokerages, pension funds, banks and insurance companies to set up offices at the Nairobi International Financial Center, said Alex Owino, a project manager at the ministry.
- The financial center will help Kenya gain a stronger presence in sub-Saharan Africa’s growing financial services market. The finance industry accounts for 5.4 percent of Kenya’s gross domestic product and has the potential to expand to as much as 15 percent of GDP, Minister Kenyatta said.
Sources: Bloomberg, Kenya Broadcasting Company
Kenya Commercial Bank plans to open 30 new branches in South Sudan
- Kenya Commercial Bank (KCB) says the successful referendum in South Sudan will provide an improved investment climate, and that the country’s “political stability and security in the south are likely to attract international investors.”
- KCB is the largest bank in Kenya, ranked by assets, and hopes to serve nearly 100,000 customers across 30 new branches in South Sudan by 2015.
- KCB CEO Martin Oduor-Otieno said South Sudan has “the potential to be the biggest economy in the region in the next 10 to 20 years.”
Source: Reuters Africa
Microfinancing empowers women to start small businesses
- The Kenya Women Finance Trust Limited (KWFT) was established to help women entrepreneurs develop their business models through microfinancing.
- In 2010 KWFT, planned to increase its clients to 600,000 and disburse Sh20 billion (nearly $250 million USD) countrywide.
- The small to medium size business loans not only spur companies, but also create employment opportunities, especially in rural areas. Other personal loans allow women to access money for their children’s education so they needn’t siphon off money from their businesses to support their families.
Sources: The Standard, KWFT (1), KWFT (2)
Mobile phones put banking services in the hands of all Kenyans
- The ground-breaking M-Pesa money transfer service was launched in Kenya by Safaricom in March 2007.
- “M-Pesa is the first product in the world that allows the unbanked, with no banking details, no registration, no bank account, no credit card, to do banking,” said former Safaricom CEO, Michael Joseph, last year.
- By giving any M-Pesa customer the ability to start saving with as little as $1 and earn interest on the principal, mobile phone banking services have drawn in the country’s unbanked and enabled users to access and manage their bank accounts, make interbank cash transfers, pay their bills and apply for loans of up to Sh1 million (12, 410 USD).
Sources: Business Daily, Daily Nation
In 2009, Kenya was the largest inward investor in the East African Community
- Kenya has about 270 companies operating in Tanzania and many Kenyan firms have investments in Uganda and Rwanda.
- Kenya’s dedication to investing in the region has boosted tax revenues and created jobs in many neighboring countries.
- Kenyan companies like Kenya Airways have cross-listed their stock shares on the Kampala and Dar es Salaam stock exchanges, and the Kenya Commercial Bank has operations around the region.
Kenya has a large and prosperous stock exchange
- The Nairobi Stock Exchange (NSE) is the fourth largest exchange in Africa in terms of total daily trades and the fifth largest in terms of nationalGDP. Trading in the NSE is done through the Electronic Trading System, which was commissioned in 2006.
- The 55-member Nairobi All-Share Index (NASI), has risen 43 percent this year, making it Africa’s second best performing market.
- By September 2010, the value of stock traded in Kenya was more than double that for the whole of 2009.
Source: Africa Business Source, Bloomberg Businessweek
70% of Kenyan coffee is produced by small-scale farmers
- It is estimated that the coffee industry directly or indirectly employs 6 million Kenyans, including 700,000 growers.
- The small-scale farmers are members of cooperative societies which process their own coffee.
- The major coffee growing regions in Kenya are the High Plateaus around Mt. Kenya, the Aberdare Range, Kisii, Nyanza, Bungoma, Nakuru and Kericho.
Source: BBC News, Hollywood Reporter
Kenya is one of the top overseas destinations for American tourists
- In 2008, more than 89,400 American tourists visited the country, experiencing the culture and taking in the natural beauty firsthand.
- More than 9,000 American citizens are currently living in Kenya.
- To cater to the American audience, the Kenyan Ministry of Tourism is developing an Obama Route that will take tourists from Nairobi through the picturesque Rift Valley to Kogelo, the village where President Obama?s father grew up.
Source: U.S. Department of State, GlobalAtlanta.com
Kenya supplies over 35% of cut flowers to the world’s largest markets
- The Kenyan flower sector grows at an average of 20% per year.
- The floriculture industry is estimated to employ over 60,000 Kenyans in rural areas.
- In 2008, Kenya exported 93,000 tons of flowers around the world.
- The main markets for Kenyan flowers are the Netherlands, UK, Germany and France.
Source: Kenya Flower Council
Kenya has the largest economy in the East African Community
- The East African Community (EAC) is a regional intergovernmental organization of five countries: Kenya, Uganda, Tanzania, Rwanda and Burundi.
- The EAC will launch its Common Market on July 1, 2010, allowing the free movement of labor, goods, services and capital between member countries.
- The EAC aims to widen and deepen cooperation between member states by implementing a Monetary Union by 2012, and ultimately creating a Political Federation of East African States.
Source: BBC, East African Community Portal
125 American companies have offices in Kenya
Section: Dependable AllyEconomy
- Coca Cola, General Electric, and Google are among the many organizations that have their African headquarters in Nairobi, Kenya.
- These companies have brought in over $200 million in investment.
Source: Kenya Advisor, University of Pennsylvania African Studies Department
In 2008, Kenya had the biggest increase of foreign direct investment worldwide
- In 2008 alone, 25 international investment projects started in Kenya.
- The highest numbers of investment projects were in the communications sector, which brought in $82.8 million worth of investment in 2008.
Source: FDI Magazine
Kenya’s gold deposits are substantial enough to support commercial mining
- The Department of Mines and Geology estimates that the Western Kenya belt that borders Tanzania (dubbed Migori belt) could produce up to 34 tons of gold per year.
- The government is currently working with mining companies to develop a mining strategy.
Source: Business Daily Africa
Kenya is one of the global leaders in community-based eco-tourism
- The government works with local tribes to develop innovative ways to protect the environment and local culture.
- Kenya has won several eco-lodge awards and is planning to be the first African country to develop and use international criteria to rate eco-lodges and tour operators.
Source: Kenya Tourist Board
Kenya was the first country in Africa to use the new mobile-phone money transfer service
- M-PESA customers can deposit and withdraw money from a network of agents that includes airtime resellers and retail outlets acting as banking agents.
- The service enables its users to deposit and withdraw money, transfer money to other users and non-users, pay bills, and purchase cell minutes.
Source: Safaricom, BBC, Guardian