Opportunities in the wake of Barack Obama visit
What you need to know:
- Kenya boasts one of the world’s fastest-growing economies and is on the way to becoming an economic powerhouse.
- Start-up entrepreneurs rely heavily on overseas investment to move forward, and there is very limited opportunity to obtain capital domestically.
When President Obama touched down in Kenya for his historical visit, he brought with him the promise of American investments into East Africa’s infrastructure and emerging business culture.
Announcing a ‘new chapter of co-operation’ with the US, the President talked about creating local jobs and ‘unleashing economic growth’ throughout Kenya and across the continent.
Hopefully, his visit will enhance investor confidence and thus stimulate hesitant global organisations and private enterprises to launch local operations.
Kenya boasts one of the world’s fastest-growing economies and is on the way to becoming an economic powerhouse. The country received an extra boost this year when the US granted a 10-year extension to the African Growth and Opportunity Act (AGOA).
AGOA permits the tax-free import of Africa-made products, and is usually renewed for smaller four-year periods. This 10-year extension gives Kenyan entrepreneurs an opportunity to kick things up a notch, and many are doubling their efforts to make the most of the unique opportunity.
The AGOA extension arrives on the crest of a wave of positive change for African economies and investments. In the past, a visiting US President would have brought a simple gift of financial aid, but today‘s leaders have learned that true success comes from the synthesis of aid and private investment.
In Kenya, start-up entrepreneurs rely heavily on overseas investment to move forward, and there is very limited opportunity to obtain capital domestically. Small-scale businesses turn to small-scale investment engines, which focus on linking foreign investment with fledging African start-ups, providing business mentoring along the way. Large-scale and small-scale opportunities are especially noted in the following sectors:
BURGEONING TECHNOLOGY
Infrastructure: For Kenya’s economy to thrive, solid infrastructure is critical. Improved roads and ports are needed for industries like manufacturing to connect to global markets. One American multinational conglomerate corporation is currently working with the US African Development Foundation to provide electricity where it is needed.
Technology: Construction is underway on the government-funded Konza Techno City, intended to house Nairobi’s burgeoning tech scene. Known as the ‘Silicon Savannah’, the $14bn technical complex is due to be completed in 2019, and is expected to create over 100,000 jobs. Konza will serve as an epicentre for all of East Africa’s tech business, and will house education and research hubs.
Mobile: Kenya is the home of one of the most successful mobile-based money transfer services in the developing world, allowing users to pay for coffee or rent via a mobile text. Kenyans are prolific mobile tech users, with a rapidly growing mobile penetration rate (over 31 million). Many Kenyan start-ups are geared towards mobile users.
Manufacturing: As China moves away from large-scale manufacturing, Africa is ready to take over. In the Ethiopian capital, Addis Ababa, a manufacturing hub is developing in close proximity to the airport to connect local businesses to global supply chains.
Healthcare: Foreign investors are currently eyeing the country’s under-developed healthcare sector, with an emphasis on hospitals and pharmaceuticals.
Mr Pike is the Managing Director of Sub-Saharan Africa region at Pedersen & Partners. He has developed his career in recruitment and Executive Search since 1998 across the US, Europe and Africa, while Ms Mwihia is the Country Manager for Kenya for Pedersen & Partners.
