African powerhouses Kenya and South Africa can tag team and win the wealth game

Kenyans last week turned out in Joburg to stake out their stall.

THE Kenya Trade and Investment Summit, held in partnership with the Kenya High Commission and Mail & Guardian Africa on September 4 at the Sandton Convention Centre resembled a McDonald’s menu. 

It had many iterations of a larger theme: how South Africa and Kenya can do more business and grow richer together. 

There was rapid agreement on the main sticking issue — South Africa’s new visa rules, which critics say are “anti-business”.   

Kenyan Foreign Minister Amina Mohamed broached the issue with great delicacy, but business leaders, including the Mail & Guardian’s deputy executive chairman Trevor Ncube; Thomas Konditi, president and chief executive of GE Transportation Africa and Kiprono Kittony, chair of Kenya’s National Chamber of Commerce, expressed their irritation.  

Kenyan Foreign Minister Amina Mohamed said that progress was being made, and Vusi Khumalo, chairman of the South African Chamber of Commerce, helped mollify the forum when he revealed his organisation had also made representations to the government and there was hope of improvement. 

The visa issue was vexing, mainly because delegates said it was an unnecessary impediment to a “logical” alliance that could engineer prosperity on the continent. 

Michael Kawalya-Kagwa of the Development Bank of Southern Africa said Kenya was an “anchor” in East Africa, and had developed physical and financial structures to meet that role; foreign investors coming to the country now can make use of that infrastructure. 

Mohamed said there were four big entry points into Africa for businesses with regional ambitions — South Africa in the south, Nigeria in the west, Egypt in the north, and Kenya in the west. 

Tremendous opportunities
Beyond Kenya and South Africa working to catalyse growth in southern, central and eastern Africa, Mohamed said that market-facilitation collaboration between the four countries would unlock tremendous economic opportunities on the continent. 

Konditi said South Africa and Kenya had many similarities: some of Africa’s most advanced stock markets, a common “hub” position and highly developed human resources, among others. He might have added that they have two of the most progressive constitutions in Africa, and two of its most advanced technology innovation markets.  

The strongest presence from the South African side of the fence was from the moneymen and women. Rand Merchant Bank’s deputy chief officer James Formby — whose wife is Kenyan — said RMB had already made deals worth $1-billion in Kenya, mostly in energy and infrastructure, and Standard Bank, which has been in Kenya for 50 years, has done business worth several billion dollars over this period, and had many seats in the room. 

The Kenyan priority was clear from the composition of the delegation from Nairobi, with energy, infrastructure and communication being the areas they were most keen for South Africans to dip their toes into. 

Many speakers highlighted that because the East African Community is the most economically and politically integrated bloc in Africa (with an elected regional parliament and a court that sits in the Tanzanian city of Arusha) — plus it has a common security architecture — investment in Kenya as a hub is ultimately investment in the region. 

The mega Lamu Port Southern Sudan-Ethiopia Transport corridor is a 1 720km rail, road, pipeline and electricity corridor through the three countries, and there are plans for the pipeline to loop into Uganda’s Albertine oilfields. The new standard gauge railway will run into Uganda and on to Rwanda, with projections for it to snake on into Burundi. 

Many for price of one
To paraphrase RMB’s Africa analyst Nema Ramkhelawan-Bhana, investing in Kenya gives access to many markets for the price of one. 

Johannesburg-based Dalberg’s executive director James Mwangi said that the innovation in tech taking place in Kenya now is how the rest of Africa will “look like in five years”. Kenya, he said, is an “African lab”. After the mobile-money payment system M-Pesa launched in 2007, many people said its stunning success could not be replicated outside Kenya. It has gone on to become the world’s leading mobile-money platform. 

He might have said the same of Ushahidi, born in the December 2008 post-election crisis in Kenya, which has gone on to become a leading crowdsourcing software tool. 

Echoing the view of giant mobile operator Safaricom chief executive Bob Collymore, Mwangi said the next game-changer from Kenya is set to be off-grid energy. This is spawning a series of innovations, perhaps most notably M-Kopa, which has brought together the mobile phone, micro payments and solar to create Africa’s first “pay-as-you-go” solar energy in Africa.   

US president Barack Obama was sufficiently impressed when he dropped in on the M-Kopa stand at the Global Entrepreneurship Summit in Nairobi during his visit in late July 2015. 

Konditi also referred to clever solutions in managing and monetising waste in Kenyan slums. More recently, the big story has been “water ATMs” — cheap, safe, water dispensers for people living in the poorer parts of Nairobi. 

In Mwangi’s view then, Kenya is the place to come and develop innovative processes, then export them to other parts of the continent or put them to work improving how your own business works. IBM Research, for instance, set up its Africa Research lab in Nairobi in 2013 to stay ahead of the competition.  

A bit lonely out there
Recently Safaricom set up what it baptised the M-Pesa Academy. Collymore said during the Kenya Trade and Investment Forum that the academy, which will offer scholarships to talented, underprivileged students, aims to become “the best school in Africa”. The prestigious Johannesburg-based African Leadership Academy (ALA) has been roped in to improve the academy.  

Collymore said these synergies are among the things that will enable Africa to create world-beating and leading institutions and businesses. “South African-born Nando’s is a little lonely out there as the main African global brand: it needs company.” 

Mohamed and other speakers noted that Nigeria, South Africa and Kenya account for 40% of Africa’s GDP. The big prize will be in doing something with the possibilities out there.  

While there are regional and economic blocs on the continent, there was a sense that what is lacking are links that create new vanguard business movements, perhaps akin to how US technology companies bedded in Ireland, or how American media has become intertwined with Britain’s, enabling a flood of back-and-forth talent and innovation and further global growth for them. 

During the day, the expressions “mobility of capital”, “mobility of talent”, “innovation leader”, “solution-based”, “infrastructure”, “South Africa’s insurance edge”, and “open for business” were used repeatedly. 

The smart businesses stand to make a lot of money in the years to come. Kenya was in Johannesburg to set out its stall.

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