Tag Archives: Kenya

Setting the example

January 22, 2014 rachel_eaton Leave a comment

Isabelle Alenus-Crosby

Quite recently, the five members of the East African Community (EAC) agreed to adopt a single currency, which should go into effect within the next 10 years. Kenya, Uganda, Tanzania, Rwanda and Burundi first came together in 2000 to create a common market and single customs union, modeled after the Eurozone. The aim is to make business a lot easier across East Africa. If their model is a success, then the entire African Union might follow suit.

When 50+ African countries are watching your every move, setting the example can be quite daunting. After all, success could contribute highly to the continued economic success of Africa (no pressure).

Of course, regional integration is a deeply political process and the implementation of a single customs territory has important political aspects.

However, East-Africans are already thinking of themselves as just that: East Africans. There are rumours that Burundi, like Rwanda, wants to adopt English as their common language in order to assure the Union’s success, and all reports following the numerous meetings between the five EAC leaders are very positive. Having spent a considerable time in all five countries myself, I am convinced that the Union will be a resounding success, even if there are quite a few reported delays at the moment.

Rome wasn’t built in a day after all. And neither was the Eurozone.

Insight

Whose Success in Africa?

January 14, 2014 rachel_eaton Leave a comment

Jonathan Berman

“It is Africa’s ambition and no-one else’s that leads Africa. Africa is not a place that success is landing on; it is a place creating success for itself and others.”

I was glad the team at Gong plucked this phrase from my book Success in Africa as the banner for their upcoming event in London. For in London, as in my native New York and my current home, Washington, I find many understand that Africa is succeeding. Few understand why. Almost none acknowledge it’s mostly because of Africans.

In March of last year, a general election campaign was underway in Kenya. Western leaders urged the people of Kenya to refrain from violence. It seemed reasonable, as Kenya experienced horrific violence in its 2007 elections. But no one knew that better than Kenyans. They didn’t need foreign heads of state to tell them about it.

At their best, successful managers of global capital and global businesses do much better in this regard. Their practices allow them to transfer skills, networks and corporate cultures that work in the African context, and are welcomed there by capable partners and stakeholders. I asked some of the CEOs who lead those global companies to participate in Success in Africa, and they shared their perspectives alongside mine.

Of course, no one knows better how to succeed in Africa than Africans. That may seem an obvious point, but consider how often, in any medium, you hear management wisdom from an African? I have worked with corporate leaders in the US, Europe, Asia and Africa. In my view, some of the most visionary and accomplished business men and women anywhere are the ones leading the current transformation of Africa. Emerging continents have been the wellspring of transformative business leaders before. Rockefeller. Carnegie. Tata. From the US in the 19^th century to Africa today, frontier markets have given rise to business leaders uniquely capable of managing uncertainty, generating disruption, and leading breathtaking growth.

Those are skills in demand not just in Africa, but the world over.

Insight

An important Power Switch

November 19, 2013 rachel_eaton Leave a comment

Isabelle Alenus-Crosby

Africa’s wind and solar power potential have been much in the news since President Obama’s “Power Africa” speech on June 29^th in Cape Town. Investment into renewable energies has always been rather limited on the continent, but this is now changing rapidly. One example is the African Development Bank’s (AfDB) recent approval of a €115m loan to help fund the construction of the 300 MW Lake Turkana Wind Power Project in Kenya. The project is being developed by a conglomerate of investors, while the government of Spain has agreed to lend Kenya $178m in order to fund the construction of a transmission line which will connect the project to the country’s national grid. All electricity will be sold to the Kenya Power and Lighting Company under a 20-year power-purchase agreement.

Strong economies are highly dependent on good energy supplies and in order to achieve global competitiveness, Africa’s economic activity (and thus electricity use) must increase exponentially. It is no surprise therefore that in recent years the continent has seen an increasing number of young entrepreneurs keen to try out their much needed innovation. Many of these concentrate heavily on Solar Energy since Photovoltaic (PV) production costs have fallen dramatically worldwide. According to the U.N., the African renewable energy sector was valued at $750 million in 2004. By the time Obama was making his speech, it had reached more than $5 billion. The latest projection is that by 2020 the value of the African renewable energy sector will reach more than $55 billion (U.N.). While Africa’s wind resources are concentrated in just a few areas, the continent’s solar resources are spread across all of the continent and, for obvious reasons, rank among the world’s most successful.

There are of course many other forms of energy that could contribute in filling Africa’s massive power gap.

Think you have an alternative idea for ensuring energy access in developing countries? With 1.5 billion people currently lacking electricity, Statoil and the Economist Intelligence Unit have joined forces to create The Energy Realities Competition. Enter before December 23^rd for your chance to win: https://event.wavecastpro.com/energyrealities/ or follow #EnergyRealities

News

Garden City selects Gong Communications

September 11, 2013 rachel_eaton Leave a comment

GARDEN CITY SELECTS GONG COMMUNICATIONS

11 September 2013, London: Gong Communications today announces that it has been selected to provide full service PR, marketing and creative services to Garden City, a 32-acre mixed use real estate development in Nairobi.

Garden City will be built over the next four years and will be home to the largest shopping mall in East Africa, 420 apartments and houses, 20,000m2 of office space and a 3-acre central park. The contract is effective immediately with initial activity focused on creative aspects of the project – refreshing the logo and developing a new website for this $250m project.

Commenting on the win, Gong’s MD, Narda Shirley said, “The scale and ambition of Garden City is a tangible example of the ‘Africa Rising’ story we so often read about. We’re particularly proud to build our real estate practice with a project of this pedigree and to be providing a full suite of services from reputation management to creative design.”

Mike Kingshott, Director at Garden City’s development manager, Aspire said, “Garden City is a flagship project in the East African market and is emblematic of Nairobi’s position as a growing base for local and international brands. Gong’s experience in the region, paired with their sleeves-rolled-up attitude make them the ideal partner for this development.”

About Garden City
Garden City is a $250m mixed-use development located on Nairobi’s newly expanded Thika Superhighway. Designed to be a city within a city, serving communities across Kenya, Uganda and Tanzania, the first phase of construction will be completed by the end of 2014 with subsequent phases to 2017. Garden City is backed by sub-Saharan Africa’s most experienced private equity real estate investor, Actis, working alongside project and development managers, Aspire and Mentor Management.

Ends

Insight

Africa invests in Africa

June 4, 2013 rachel_eaton Leave a comment

Isabelle Alenus-Crosby

A growing number of African countries are rapidly joining the ranks of prominent investors across the continent.

According to the International Finance Corporation (IFC), the rate of FDI projects from emerging markets has grown at a healthy compound rate of over 21% since 2008 (triple the amount from developed markets). The top investors were still India, the United Arab Emirates and China at the start of 2013, but intra-African investment has become very impressive since then. Nobody knows Africa better than Africans, and continued political stability across the continent is making them trust their own. The beauty is that increased economic stability and growth is allowing them to help accelerate the African success story through rapidly increasing cross-border investments.

SA has been at the forefront of the growth in intra-African trade but Kenya, Ghana and Nigeria are also investing heavily this year. From 2014, it is expected that countries like Angola and Mozambique will join their ranks.

The star performers, so far, in 2013, are Ghana, Nigeria, Cote d’Ivoire, Kenya, Tanzania, Zambia, Mozambique, Mauritius, Ethiopia, Namibia, Botswana, Angola and South Africa.

THE World Bank’s investment arm will increase lending to sub-Saharan Africa by up to a quarter in 2014 as private sector companies continue to flock to the region. The IFC is expected to make new investments of USD 5bn and Japan will provide USD 2bn worth of financial support over the next five years to back Japanese-owned development projects on the continent. Europe and the United States are also expected to increase their investments dramatically according to the World Bank, which sees Sub-Saharan Africa’s GDP accelerating to almost 6% over three years, driven by investment and commodity prices.

Roughly half the IFC’s annual lending in the region goes to financial markets and institutions to help improve the flow of credit to smaller businesses, which employ most of Africa’s workers. Another third goes to infrastructure projects and natural resources investments. The expanding sets of SMEs is bringing real economic diversification and are giving rise to internationally competitive companies, thereby providing access to global markets, and consequently higher wages and salaries. This, in turn, leads to the rapid growth of the middle-class and further political stability.

Even the most cautious investors have to admit that all the excitement surrounding Africa is grounded on solid analytical soil. The evidence might be that within a decade Africa will be its own biggest investor. I honestly cannot wait.

Insight

The “Where and Why” of investing in Africa

March 11, 2013 rachel_eaton Leave a comment

Isabelle Alenus-Crosby

Gong recently hosted a breakfast meeting chaired by The Economist’s Business Editor, Robert Guest.

One of the topics discussed was that too much “ignorant” money is going into Africa simply because there are not enough listed companies outside of Nigeria. The big question is therefore “where to invest?” Where are the various opportunities that tomorrow’s Africa presents, and what makes one country more attractive than another?

With 54 diverse markets offering unique prospects and challenges, most delegates had different opinions. What they didn’t have however, was conflicting opinions. Most agreed that there are still only a handful of good entry point to expand into Africa today.

Here are the top 5.

1. With a population of 170 million people, a growing middle class, and a reputable stock exchange, Nigeria is a notable market for those looking to target a large consumer base in Africa. With reformed petroleum regulations, Nigeria has also become an appealing market for multinational companies.

2. Ghana is doing incredibly well and has proven to be politically stable. The fact that Ghana and Nigeria have space programmes is a measure of how much these two countries are ahead of the game. The difference between Ghana and other countries is that everything (power, institutions, infrastructure) works. With the discovery of offshore oil, the country now really has everything to soon be claiming the number 1 spot.

3. Kenya is more business friendly compared to other regions on the continent. In addition, there is access to good human capital, excellent IT infrastructure, and IT skills.

4. Tanzania has always been politically stable and is therefore emerging as the most effective gateway for trade into Eastern, Southern and Central Africa. It has lucrative investment opportunities in infrastructure, privatization and value-adding facilities, and oil has recently been discovered off-shore.

5. Mozambique is developing at a rapid pace, has much oil and is also politically stable.

I should add that Ethiopia received an honourable mention at the Gong breakfast meeting; It has become Africa’s fastest-growing non-energy economy and Diageo and Heineken recently paid nearly $400m combined to acquire state breweries in the country. Ethiopia is not for the faint-hearted, however. Its population of 85 million people still ranks among the world’s poorest.

The conclusion was to watch what the diaspora is doing – and they are returning first and foremost to our top 3.

Insight

Countdown to Kenyan elections

March 2, 2013 rachel_eaton Leave a comment

Kirsten Smith

It’s Saturday. Having listened all week to local radio stations talk about peace (in 2007 the press were taking sides, so having the media on board is very important this time round), and with all the peace rallies that have been held, (there’s another one happening today I think), and peace concerts, and deliberately-public shows of the two main candidates, Uhuru Kenyatta and Raila Odinga, shaking hands, and President Kibaki appealing for ‘the losers to accept defeat and winner to embrace rivals’, the general feeling here in Nairobi is that everyone is doing all they can for Monday to be a peaceful day.

Not that there aren’t queues at petrol stations today with people stocking up on fuel, and supermarkets full of local residents buying up supplies, but that’s just in case.

There might be skirmishes at polling stations people say, but the real danger comes once the results are announced on Wednesday or Thursday, and then no one knows what will happen. There has already been trouble in other parts of the country, and there are rumours of the intimidation gangs of 2007 regrouping.

Monday is a holiday. Polling stations will open at 6am and close at 5pm, but if you are already in the queue at 5, you will be allowed to vote, so I’m told that people will probably be casting their votes up until about 9pm. I’m relying on taxi drivers for the word on the street – perhaps not the most reliable source of information but then I’ve never claimed to be a journalist and I usually find I learn a lot of interesting things from taxi drivers.

For example, what I hadn’t realised until this week was that everyone will be voting for six different people, from the President as Head of State, to the Governor (there are 47 counties so will be 47 Governors elected on Monday), Senator (47 again), Member of Parliament representing every constituency (eg Nairobi has 17 constituencies), a woman representative (47 women will be elected as part of the new constitution, which says each county gets a woman representative), and then finally a County Ward Representative (initially called councillors) – so everyone is voting for 6 different people! Andrew, my favourite taxi driver with whom I regularly sit in Nairobi traffic having long conversations, is confident that most people understand the new system and know what they have to do. He patiently explained the whole thing to me, including percentages. 98% of the 14 million registered electorate will vote on Monday he says.

I think it’s very positive that Kenya has automated it’s voting system, so it’s all digital this time round and supposedly less likely to be rigged as a result. But this election has also apparently been one of the most expensive in the world to organise, and Kenyan politicians are some of the highest paid, which is not so great to hear.

Last year in August everyone voted for the new Constitution, a simple ‘yes’ or ‘no’ vote, and were given a booklet outlining all of the information they needed on how the new constitution would work. 90% voted yes. DJs on Royal Media radio stations in each of the different tribal languages worked hard to explain the details and make sure everyone knew what was what. 90% of Kenyans now understand what it’s about and how it all works (again, these numbers are from Andrew, and by no means official stats, but a cheering vote of confidence on the new system and your fellow Kenyan).

I tried to register two SIM cards this week and spent ages waiting for someone to do all the paperwork, and then once I’d left found that only one works because it isn’t registered. Admittedly that was Safaricom, but getting six votes accurately inputted into the new digital system, and counted up is going to be quite a feat in and of itself.

And who’s going to win? Uhuru is from the Kikuyu tribe and Raila is Luo, and Kikuyu vastly outnumber the Luo in Kenya (Barak Obama’s father was Luo). Andrew reckons Uhuru will win hands down and that lots of other tribes are voting for him as well, but someone pointed out to me that Andrew’s Kikuyu, so he would say that.

He also assures me it will be peaceful.

Insight

Africa’s Brain Gain – Implications for Kenya

February 12, 2013 rachel_eaton Leave a comment

Isabelle Alenus-Crosby

In the past couple of years, Africa has received an ever increasing amount of good press thanks to its unfaltering growing collective GDP.

One of the direct results of this positivism has been that the continent’s brain drain is slowly reversing, and turning into a brain gain instead.

In order for this return of the diaspora to last, stability is just as crucial as booming economies. This is why Ghana has been on top of the list for the past decade. Should Kenya have trouble-free elections in March, it is expected that many “diasporans” will return there too.

Understanding the importance of the upcoming elections, Kenya’s mobile operator, Safaricom, has partnered with Sisi Ni Amani, an NGO, and launched an SMS platform to promote the peace. This platform will allow community “peace” ambassadors to send out positive messages targeted at specific incidents at a micro level with the aim of preventing, reducing or stopping election violence.

With so much at stake, the Kenyan government has adopted a new constitution and made widespread modifications to its electoral system. A significant change is that the new laws enable diaspora voting. By giving diasporans the power to have their say, they might feel more inclined to return home and play a crucial part in the new Africa.

After all, this is history in the making, and who wouldn’t want to be a part of it?

Insight

The market that had bankers at Davos excited this year was Africa

January 30, 2013 rachel_eaton Leave a comment

Isabelle Alenus-Crosby

This is what Peter Sands, CEO of Standard Chartered, told Reuters at the World Economic Forum last Friday.

Many African politicians attended the Forum, above all to present their nations in a positive light and thus attract more investors.

The heads of state and government from Guinea, Ethiopia, Nigeria, Rwanda, Tanzania, Kenya and Mauritius all debated the future of their continent over dinner. The event was called an “Interactive Dinner Session”, and journalists were not allowed in. Only entrepreneurs and investors were. South Africa and Nigeria, the biggest economic powers in Africa south of the Sahara, didn’t feel the need to attend the dinner, but instead focused on promoting agriculture in their respective countries. Feeding Africa seems high on their agenda, following the expected population explosion. Nigeria intends to modernize its agriculture via large-scale investment programmes, knowing that its Human Resources are more important to the country’s future than its oil. The aim is to become self-sufficient and eventually an exporter.

One point where everyone agreed was that if Africa were to invest heavily into infrastructure, it could uplift all people still living in poverty.

Some studies suggest that some $100 billion (74.2 billion euros) would have to be invested each year to achieve real improvement, and African representatives at the Davos forum hoped to raise awareness for the issue. They argued that whoever fails to invest in Africa today, will be sorry tomorrow. And almost all attendees seemed to agree with them.

Finally, the European Central Bank president Mario Draghi ended the Forum by stating that “positive contagion” on financial markets was not yet feeding into the economy at large, but that the eurozone should see recovery in the second half of the year.

Good news all round…