Kenyans start to roam Silicon Savannah
The country has had to rely on ingenuity, not commodities, to keep ticking over
The best thing to be said about Kenya’s oilfields may be this: they don’t contain much oil. If the east African country pumped out crude at the rate of Saudi Arabia, its proven reserves of 600m barrels would vanish in 52 days. That is no bad thing in a continent where the “resource curse” has hexed many a nation. Take a look at the countries with stuff in the ground, including Nigeria, Angola, Zambia, South Sudan and the Democratic Republic of Congo, and Kenya’s lack of natural bounty looks like a blessing.
Instead of oil or gas, gold or cocoa, Kenya has had to rely on ingenuity to keep itself ticking over. That matches the first success stories in Asia, where Japan, Taiwan and South Korea took off in spite of, and not because of, natural riches.
Kenya has developed one of the most diversified economies in Africa with light manufacturing, agro-processing, tourism, banking, remittances from the diaspora and, most significantly, a technology hub so fizzing with youthful enterprise they call it Silicon Savannah.
Now that the commodity boom is over, Kenya, along with a few other countries in east Africa, including Ethiopia, Rwanda and Tanzania, looks better placed than nations that have failed to diversify. According to the World Bank, Kenya will grow 5.6 per cent this year and 6.1 per cent next, matching its expansion since around 2000.
On a recent visit to the iHub, a multi-storeyed building on Ngong road in Nairobi, the only sound to be heard was the tap-tap of keyboards as 20-somethings, sprawling on sofas, perching on exercise balls or lounging on bean bags, worked on their latest projects. Even the table football was not temptation enough to distract them from their coding.
Juliana Rotich is executive director of Ushahidi, a company whose crowdsourcing technology has been used to map crises around the world, from earthquakes in Haiti and tsunamis in Japan to political violence at home.
Ms Rotich, a serial entrepreneur in her late-30s, is a director of BRCK, which produces a rugged brick-shaped modem and WiFi router that provides internet access even when the power is down, an all-too-frequent occurrence in much of Africa.
Kenyans, she says, have become adept at creative solutions to daily hassles and working around infrastructure shortfalls. “It’s the sort of thing that’s not whizz-bang, but incredibly impactful.”
One example is M-Kopa, a company that sells individual solar-panel kits to villagers who can run lights, a radio and mobile phone off the power. For a downpayment of $35 and daily instalments of about 50 cents, customers are guaranteed a constant electricity supply. (Presumably it helps that Kenya is sunny.) Once they have demonstrated creditworthiness by paying off their solar equipment, they become eligible to buy other products, including fuel-efficient stoves, smartphones and M-Kopa powered televisions.
M-Kopa is a business, not a charity, which makes it sustainable. It is an example of “leapfrogging”, a favourite word among Afro-enthusiasts who believe that technology can solve problems from poverty to corruption. Ms Rotich, sensibly, makes less grandiose claims. “It’s patching up, but it’s cool,” she says.
As with much technology in Kenya, M-Kopa is enabled by M-Pesa, a decade-old mobile money system that underpins Silicon Savannah. M-Pesa serves 22m people who push large chunks of Kenya’s output over the mobile network every day.
Bob Collymore, chief executive of Safaricom, the company that developed the idea, said he knew his company was on to something when ordinary Kenyans told him they no longer used ATMs or banks. M-Pesa has brought Kenyans, from herdsmen and subsistence farmers to slum dwellers and apartment owners, into the networked economy.
Kenya might even become the world’s first cashless society were it not for politicians’ need for bundles of paper currency at election time.
There are limits to such technological workarounds. M-Kopa would be redundant if Kenya had reliable, universal power. Its success is partly a product of the state’s failure, though to be fair Kenya has a better and more diverse energy supply than many other African nations. Nor has there been a technological breakthrough with anything like the same impact since M-Pesa was introduced in 2007.
Still, there are incremental advances. General Electric is developing a tele-diagnostic health service with local start-up SevenSeas, which allows screening to take place in remote clinics and to be analysed in central hubs in real time. Safaricom has installed cameras in Nairobi and Mombasa, replete with facial recognition technology, to help state agencies fight crime and terrorism.
One must not exaggerate. Kenya is still poor, prone to ethnic violence, vulnerable to terrorist attacks and terribly corrupt. Manufacturing exports have stalled. Beyond horticulture, it has not done enough to drag agriculture into the 21st century. Income per capita, in purchasing power terms, is still only around $3,000, less than half the level of the Philippines, until recently considered an Asian basket case.
Still, Kenya, market friendly, deregulated, chaotic and entrepreneurial, feels like a country on the move. As the commodity groups of Africa pick themselves off the floor and wonder what to do next, Kenya’s economy is moving across its home-built savannah.
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