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Saturday, April 14, 2007

Kenya 2030 - Service Economy Superstar?

Kenya has the potential (yes, that word again...) to become the African Superstar of the service industry.

After reading Kenyan Entrepreneur's blog entry on "niches" & "creativity" I think Kenya needs to find a niche... that niche is providing services to primarily Africa(ns) and beyond.

University Education & Research
  • We don't need to send KShs "Billions" to Australia, USA, Malaysia or the UK for tertiary education when we can/should set up WORLD-CLASS universities in collaboration with top-notch universities, departments or research centers around the world. Singapore & Dubai have done it. So can we.
  • The cost of living in Nairobi is much lower than S.Africa, Dubai or the UK. In addition, it is cheaper for African students to fly to/fro from Nairobi than many of the other cities.
  • We can attract students from Africa while providing Kenyans with jobs (lecturers, clerks, janitors, etc). These students become ambassadors for Kenyan universities. This has bee proven time & again by American universities' African alumni.
  • We can attract African talent to these universities & think tanks to provide African solutions to Africa's problems. They understand Kenya's problems as we understand theirs. This allows for collaboration of peers.
  • Networking opportunities arise from the interaction of African professionals that allow the expansion of inter-African commerce. It is a fact that "connections" spurs investments. The connotation is not about "corruption" but "connections" between classmates.
Medical Tourism
  • Kenyans spend KShs "Billions" on treatments abroad. Our so-called "leaders" lead the way to more waste of funds... kibz went to UK, dan moi recently went to Germany. All the "heart" operations that are done abroad since we lack the facilities. The less well-heeled go to S.Africa & India.
  • Medical facilities will encourage research that can boost Kenya's stature beyond the HIV & Malaria programs.
  • Kenya has 2 medical schools & can expand its facilities to ensure we produce more doctors. We can then keep them in Kenya instead of "exporting" them to UK, USA or Australia!
  • Kenya "exports" nurses to UK. We can keep them in Kenya by offering them better opportunities within Kenya!
  • India has taken up the concept of "Medical Tourism" with gusto & it is a major growth industry for them. The benefits of Medical Tourism then flow to the rest of the population as the latest technology is used & personnel trained.
  • Nairobi has become the premier airline hub for the East, Central & West Africa region - multiple carriers e.g. KQ - with the necessary connections to Nairobi. Kenya can effectively compete against S.Africa to become the preferred choice for medical treatment.
  • The medical per capita "spend" is much higher than regular tourism! Of course, the patients' guests/visitors might tour other "touristy" locations e.g. Game Parks.
  • The knock-on benefits for Kenya's construction sector, industrial (e.g. BOC Gases), education sector (nurses, doctors, technicians), agriculture (food, flowers) & tourism (relatives, friends visiting parks) are tremendous.
Business Process Outsourcing
  • We can capture some of the growing BPO market from India or complement India.
  • There is need for BPO services for many African countries as these countries' economies expand.
  • The fiber-optic broadband systems (planned) could substantially reduce the cost of telecommunications between African countries.
  • Kenya needs to expand language classes in German, Italian & French since these countries may not be effectively served by India.

Problems & Challenges for the Service Economy

Insecurity


Kenya needs to work on the high levels of insecurity prevalent today.
  • Being "poor" is no excuse for being a thief. And being a violent thief is worse!
  • I support brutal suppression of the "violent" elements. Yes, it will not be popular with the "human rights" folks but I would rather a thief is killed than my near & dear hurt. That's my opinion... What about my Rights to enjoy my hard-earned cash & life?
  • My "little finger" is more important to me than the life of a violent thief! I would rather the police kill the thug/crook/thief before a single hair on my head is harmed.
  • We need a 24-hour "economy" especially if we want to serve the BPO market in the USA.
  • JKIA's utilization can increase substantially if insecurity is not an issue since the travelers may start their journeys much earlier & fly in much later.
  • The transport industry - using lorries - can be boosted if these carriers move goods at night without fear. This means that the roads are "clear" for passenger & tourist traffic during the day!
Telecommunications
  • Despite advances in telecommunications, the cost of phone calls remain much higher than necessary. We need more competitors as well as increased "openness" for them then operate effectively.
  • Data costs too much to access. Hopefully, the government will get its act together or allow private firms to lay fiber-optic cables all over the country (without onerous conditions/permits/fees) as well as international connections.
  • Progress has been made with EaSSy & TEAMS but the there have been too many delays.
Political Stability - Ethnic Conflicts - Property Rights
  • Political & ethnic conflicts (esp violent clashes) e.g. Mt. Elgon clashes in 2007 need to be stopped asap. Even if it requires a military response. Nevertheless, the cause roots need to be examined.
  • Property rights should be supreme. Kenya should not succumb to a "tribal" or "nationalistic" tendency that tramples on Human Rights that will dissuade further investments & aggravate poverty e.g. mugabe's antics in Zimbabwe.
  • Politics seem to be a 24/7 obssession with Kenyans. No wonder we remain poor since "talking politics' takes precedence over "work productivity".
  • Kenyans spend less time working, even at their jobs, than discussing politics!
There is hope but we need to find our niche, soon, before someone else steals a march on us! If we do not do it... someone will... S.Africa is looking into becoming a BPO powerhouse as are many N.African countries.

15 comments:

AfroM said...

Best Post Ever.

Concise and clearly doable!
I really like this.

Kenya needs to continue its commitment to the EAC, if we are to capture this niche.

MainaT said...

CT-no to repeat the obvious, that is a well-thought out post.
Really like the idea of universities because we do have the lecturers, research facilities.
I think bottomline-we have

MainaT said...

sorry, bottomline-we know the problems, (insecurity, infrastructure, politics and corruption) and we just need leadership to start reacting to them

coldtusker said...

AfroM+MainaT - Thanks...

None of this will be easy but we need to start NOW... We require major investments & we will not see a payback for many years thus 2030 & not 2010.

Kenyans need a "long-term" midset as well as the need to work hard(er) and smarter.

We need to build a "reputation" for quality just as the Germans & Japanese have done.

MainaT said...

CT our problem is the politics i.e. we don't have a constitution that stops leaders being corrupt, tribalists and generally having dictatorial/imperial tendencies. Thus being Rais is a big thing as it allows you and your buddies to eat, you then fear being found out when you leave office. Bcos you have that fear you spend a lot of money protecting your regime and those who follow you, you are therefore even more corrupt, those who come after you are corrupt. Then most of our leaders are uneducated, not modern, can't take advice without feeling threatened (look how communications is doing as Mutahi allows Ndemo to run it).

Anonymous said...

Kenyans are good at talking. Talk, talk, talk is all we do. We are not action oriented people.

Sijui said...

CT.......I rest my case. BTW, a small light at the end of the tunnel. I've been reading that this is starting to hit the political radar screen. NEPAD and the AU are starting to push heavily for many of the points you mentioned. Bottom line, more progressive governments have jumped on this bandwagon like SA, Botswana, Ghana, Rwanda, Tunisia et al and are putting the necessary investments in place...for the rest shauri yao if they want to leave such ideas in the domain of talk shops.

P.S. One thing I like about the 'New Africa' is this emerging self interest and competition. We are no longer birds of a feather......governments are no longer ashamed to stab each other in the back when it comes to return on investment. You snooze you loose!

Anonymous said...

Annonymous:

If people just talk, then why are you here reading this blog and leaving comments. Go back to sleep and let people talk!

Sijui said...

http://bdafrica.com/index.php?option=com_content&task=view&id=655&Itemid=3040

on a somewhat related tangent, stories like these make me absolutely livid!!!!!!! I mean stark raving mad!!!!!!!!!!!!!!!!!!!!!!! I'm comforted by the fact that GK appears to be listening less and less to this bullshit! Talk of blatant economic sabotage!!!! I see they released a tranche recently because they were told they can put it where the sun don't shine! The faster Kenya starts issuing sovereign international bonds the better!!!!!

Afro said...

sijui, was that the article on IMF wanting Kenya to raise interest rates? The URL cut off...

Sijui said...

Afro...yep!!!!!!!!!!!!!!!!!!!!!!

Afro said...

@Sijui - I think your wish came true (temporarily atleast) and i am not sure what the fall out from this will be..., but BDA reported today
"The stand-off between the Central Bank of Kenya and the International Monetary Fund (IMF) on interest rate levels in the country and foreign exchange is unlikely to be resolved soon.

CBK Governor Prof Njuguna Ndung’u has reiterated there would be no tweaking with the money market and that all was well. "
The rest of it is subscription only :(
The only way for kenya to brush the IMF's dust off its shoulder is to wean itself off of the loans. The strings are always and ever will be attached. (A kenyan can dream eh?!)

Coldtusker, thanks for letting us use your space kidogo...

Sijui said...

Thanks Afro....I saw that too.....
BTW what do folks think of this new latest tidbit:
http://bdafrica.com/index.php?option=com_content&task=view&id=695&Itemid=3052

Basically Wananchi Online is getting an infusion of $28 million (Ksh. 2 billion) to transform in to a telecoms company. I guess this is in response to Access Kenya's Ksh. 800 million IPO....
this is a new twist to the Africa Online ownership tussle. Ballsy stuff, ballsy stuff........

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