Vision Economic Pillar

The Kenya Vision 2030 economic pillar will kick off in proud partnership with the Kenyan ICT Board at the East Africa Outsourcing (EAO) Summit 2012 in Nairobi. Hosted by international business-to-business conferencing company, Kinetic Events; the summit will provide a platform for existing and potential players in outsourcing industries worldwide, looking to reduce costs and efficiency pressures, by outsourcing business processes to East Africa.

The Vision aims to maintain a sustained economic growth rate of 10 per cent per annum from 2012, with a focus on macroeconomic stability, infrastructural development; science, technology and innovation (STI), land reforms, human resource development, and security and public sector reforms.

The Kenyan Government and Emirates Telecommunication Technology (Etisalat), together with local investors, launched The East Africa Marine Systems (TEAMS) fibre optic undersea cable project, preparing Kenya with the technology to establish a major Business Process Outsourcing (BPO) park. This reinforces Nairobi as a major international financial hub to accelerate economic growth and gain a stronger presence in Africa’s rapidly growing financial services market.

Shannon Mackrill, Joint Managing Director at Kinetic Events says, “The outsourcing of companies to handle business activities that would ordinarily be conducted in-house, could be provided locally, however they are increasingly being conducted off-shore and abroad at low-cost locations. Given the size of the market and the addressable demand, there is an opportunity for emerging economies to provide BPO services to the developed world. Kenya has recognised and taken advantage of this opportunity and will put the country on parity with IT service competitors on the continent, including South Africa, as one of the fastest growing developing outsourcing destinations.”

The cross-industry event will be held at the Nairobi Intercontinental Hotel from 5 to 6 June 2012, and will host senior-level professionals currently outsourcing, or considering the options, exploring both operational and technological strategic issues shared by leading decision makers globally or seeking to influence market share and profitability.

The strategic invitation-only summit will explore the alignment of people, process and technology; offering insight into the solutions available to contact centres today, assisting companies in the negotiations and selecting the tools best suited to their needs. Attendees will be able to engage in interactive conference sessions and educational workshops designed for quality time and interaction with peers.

For more information visit www.eaosummit.com or contact Shaunei Meintjes on +27 21 555 0866 or shaunei@kineticevents.net. Follow @ITLeadersAfrica and @KineticEventsSA on Twitter for daily updates and news feeds.

By Jeremiah Okello – CEO, Collins Consulting International

Overview : Although the regional hub for trade and finance in East Africa, Kenya has been hampered by reliance upon several primary goods whose prices have remained low. In the key December 2002 elections, Daniel Arap MOI’s 24-year-old reign ended, and a new opposition government took on the formidable economic problems facing the nation. After some early progress in rooting out corruption and encouraging donor support, the KIBAKI government was rocked by high-level graft scandals in 2005 and 2006. In 2006, the World Bank and IMF delayed loans pending action by the government on corruption. The international financial institutions and donors have since resumed lending, despite little action on the government’s part to deal with corruption. Post-election violence in early 2008, coupled with the effects of the global financial crisis on remittance and exports, reduced GDP growth to 1.7 in 2008, but the economy rebounded in 2009-10.

Kenya is now emerging from its recent past and by all accounts Kenya has now positioned itself as an ideal Outsourcing destination, the country now has a thriving economy, a growing public sector commitment, and the attraction for doing business there.

Kenya has experienced rapid growth in the outsourcing Industry with some of the best of breed operators opening their doors in Nairobi in the last two years. Apart from the private sector investment in the industry the Kenyan Government has identified Outsourcing as part of its Development Master Plan ( DMP) christened ‘Kenya Vision 2030’, and has put a lot of emphasis on developing the sector.

The Government is involved in the creation of the 5,000-acre Konza Technology Park, 60km south of Nairobi. When completed Konza will be a Technology Metropolis with the capacity to independently support hundreds of BPO, Call Center Operators. Between 2005 and 2008, the Kenyan Government has increased its spending in the IT sector by about 8%, and the bulk of this has gone in to research and Development, marketing and Infrastructure improvement in this sector.

The increase in spending in the BPO sector has greatly influenced the migration of major corporations to set up and invest in Kenya as the regional IT hub for the whole of the East African region. Notable names include Google, HP, Fijutsu, Vodafone, Nokia, GE, Huawei, among others.

Also key to the emergence of Kenya as a viable sourcing destination is the commissioning of undersea fiber optic cable connections that have greatly improved reliability and reduced costs associated with Internet access in the Country.
These improvements in the working environment in the IT sector especially in the Outsourcing subsector has underlined the doubling of the number of Outsourcing Operators over the last two years, and the organic expansion of the existing Operators. The diversity of the types of services on offer from the Kenyan Operators is also helping to broaden the sector.

The cost of operating a 1000 seat BPO or Call Center in Nairobi is much lower than that of competing destinations like India, China, South Africa, and the Philippines, this is according to Industry analysts.

All these factors coupled with an ever growing and improving talent pool of students taking up BPO certifications and Training in tertiary Institutions, makes Kenya a Key player in the Industry that can have a very big impact in the years to come.

This is what the Chief Executive of GE had to say about their venture into Kenya:
“….Kenya is an emerging market for us, not a third world country. You can’t compare it to most other countries in Africa. It is the perfect place to live…Kenyans have great accents…we believe that Kenya can be successful in BPO”

Taking into account the three Key factors that make any Country an ideal Outsourcing destination, namely presence of MNC’s, public sector support, and maturity of an industry, Kenya has all these three factors working in its favor. In the last 3 years two of the Top Kenyan Outsourcing firms were voted among the best Suppliers Outside Europe in UK’s annual Outsourcing survey, and another two also received ISO and CMMI certifications that make them equally matched with some of the best suppliers in the world.

With many outsourcing buyer markets looking for newer and better destinations to do business, Kenya offers a very appealing option that is worthy of consideration.

By Janan Yussif

Kenya is hoping that continued investment efforts in its outsourcing sector will continue to boost the country’s economic growth. The government announced that it was looking to incorporate high-skilled IT services such as software development, animation and gaming into the local market in order to buttress international companies interest in the country, which has already seen much growth in outsourcing in recent years.

The Kenya ICT Board, a government arm charged with marketing the country as a business process outsourcing (BPO) hub, has been concentrating on voice segment for services like customer care and telemarketing, reported Business Daily.

“These are less lucrative and has seen Kenya lose many BPO opportunities despite having a bubbly techie community that has won major awards in software development,” the report stated.

Analysts believe that by pushing these sectors it will help make Kenya a more enticing destination for companies looking to get a foot into East African markets.

“What we have seen in recent years is that Kenya is really going after making the country a leading destination for companies looking to outsource and it is working,” said William Mkale, a Nairobi-based ministry of communications official. He told IT News Africa/Bikya Masr that these new efforts are likely to spur growth and keep the economy pushing forward.
“Look at the success of the telecom sector in Kenya in recent years and it is obvious that by continuing to bolster the IT infrastructure that the ministry has been pushing is going to achieve great success,” he added.

The government is focusing on linking the 25 registered BPO and call center operators while leaving out other 637 information technology service (ITES) providers.

Source: Bikyamasr