Kenya's future depends on adapting to data-driven decision-making

Monday December 25 2017

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In the spirit of this festive season, let me take this opportunity to wish you a merry Christmas and a wonderful New Year.

I want to close the year with an appeal that in the coming year, all of us, including our policymakers and entrepreneurs, start embracing data-driven decisions.

Many decisions, as I shall demonstrate in this article, are made based on sheer gut feeling.

These become very expensive in the long run.

There is so much data out there that virtually every decision we make can be easily driven by data.

Marc Benioff, an American internet entrepreneur who founded Salesforce, an enterprise cloud-computing company, once said:

“The world is being re-shaped by the convergence of social, mobile, cloud, big data, community and other powerful forces.

"The combination of these technologies unlocks an incredible opportunity to connect everything together in a new way and is dramatically transforming the way we live and work.”

His predictions have come to pass as global enterprises leverage these technologies to make informed decisions that have made their organisations competitive in virtually every corner of the world.

Those who have not realised why data has become such a valuable thing continue to suffer in silence.

Often, they have no idea what has hit them.

Besides the knowledge that exists in gathering structured data, technology has made it possible to gather and analyse unstructured data and create valuable information.

It is now possible to even gather data from emotional behaviour.

In a technique known as sentiment analysis (sometimes referred to as emotion artificial intelligence or opinion mining, it is widely used in political campaigns but can also be applied to other social setups) one can make predictions about certain outcomes based on such data.

This is where natural language is processed into information or text then analysed to extract patterns of useful information for the purpose of methodically studying subjective information.

For example, the mushrooming of restaurants in Westlands correlates highly with people sentiments gathered from social media.

When you search online for a restaurant, that information is kept then aggregated to glean useful information on what people want in that locality.

Similarly, social media discussions are aggregated to create information.

This information is translated into either products or services that satisfy the needs of the people within that locality.

Social media companies then sell this information to people seeking investment opportunities in food or any other needs.

It is, therefore, not a coincidence that many restaurants coming up in this area are foreign.

To maintain their competitiveness, they rely heavily on customer sentiments that are discreetly collected.

Our failure to embrace data undermines our ability to be competitive.

With time, many analogue enterprises will collapse and give way to those that have utilised emerging technologies to know what customers are saying about them and respond appropriately.

In a sense, the continuing failure of local supermarkets could be traced to decisions that were made without the benefit of data analysis.

In essence, it is very costly to make decisions based on conjecture.

Newspapers across Africa reviewed US President Donald Trump’s newly unveiled National Security Strategy.

The key highlight was the change in policy from human rights, good governance, trade and development to one that merely sees the continent as a market for US goods and services.

What the newspapers didn’t say is that they have in the recent past justified the look-to-East policy by many African countries.

In various forums, the West has been criticised for talking too much about human rights and leaving China to control trade in the region.

In social media we have derided the West for failing to do what China is doing to Africa.

Any good data analyst will conclude that what Africa needed most was infrastructure and not human rights.

President Trump and his policy advisers are just responding to what they have firmly believed as the needs of the African people based on what the Africans themselves have been saying in their media, conferences and social media.

Soon, America will build a multiple-lane highway between Mombasa and Nairobi in response to perhaps the Chinese-built standard gauge railway (SGR).

In my view, we need constructive engagement with anybody wanting trade here in Africa.

The tragedy is we fail to proactively engage by entangling ourselves with multiple objectives.

Our focus should be on how to feed and productively engage our ever-growing population.

I have said in the past that Trump’s Africa agenda is to enhance American trade.

He will dangle the American Growth Opportunity Act (Agoa) and use it to negotiate reciprocal trade.

He is a dealmaker and going by the justification of the policy that states, “Africa contains many of the world’s fastest growing economies, which represent potential new markets for US goods and services”, they are ready for Africa.

It is my prediction therefore that in 2018, President Trump will visit Africa with trade proposals.

The question is whether our negation strategies with the Americans will be informed by an analysis of available data or whether we shall as usual walk into the negotiation table with nothing else in our mind except the sumptuous lunch thereafter.

Chances are that they have more data on us than we could possibly know.

Our inability to deal with food security increasingly makes Africa an attractive commodity market.

In the recent past Kenya has imported maize from as far as Mexico.

Yet Mexico isn’t as competitive as the US. Maize is the stable commodity in virtually all of Africa.

Africa leads the world in per capita consumption of maize but it produces the least even though it has abundant land and labour.

Major producers are the US and China.

A recent announcement that “Kenya, Mexico ink maize import deal for cheap grain” is in my view the starting point to develop constructive engagement with Americans.

Reason: Maize is Kenya’s number one commodity.

Yet close to 80 per cent of production has been left to underfunded peasant farmers with no known knowledge of the supply chain that can meet customer demands.

Therefore, if there is any data-driven negotiation with Americans, it is the purchase of farming technology (No arms) from the US in exchange of continued Agoa deal.

With the level of maize consumption in Africa we’ve got to preach the Chinese proverb, “Give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for a lifetime.”

Without food security, our independence is compromised and this perhaps is the reason President Uhuru Kenyatta prioritised food security as his legacy.

Our future survival depends on how fast we adapt to the culture of data-driven decisions.

The writer is an associate professor at the University of Nairobi’s School of Business.