Strong growth in Eastern Africa offers opportunities
Fred Klinkenberg THE reality of the business opportunity in Africa is often different to what SMEs first assume. Beyond the ‘glass half-empty’ headlines lies an expanding market in the second-fastest growing region in the world. Rapid growth has created opportunities for Irish exporters in key sectors such as international education, healthcare, ICT, telco, fintech and aviation.
The scale of the opportunity is clear in the market size. Eastern Africa is home to 460 million people, 6pc of the world’s population. Kenya acts as an ideal gateway into the region’s target market of 250 million people, covering Ethiopia, Uganda and Tanzania, as well as Kenya itself.
The market is developing quickly in ways that benefit Irish businesses. Ethiopia became the world’s fastest-growing economy this year according to the World Bank, with an economic growth rate of more than 8pc. In 2016, Kenya’s growth rate was close to 6pc, with its rising middle class clustered mainly in urban areas — 30pc live in Nairobi, offering a dense market for exporters to the region.
The growth of the Kenyan middle class is creating opportunities for exporters in sectors such as education and healthcare. Some 400,000 African students travel abroad to undertake undergraduate and postgraduate studies every year, creating an enormous market for Ireland’s education sector.
Uncertainty generated by Brexit has created huge potential for Ireland to increase the number of African students that study here. A number of Irish universities are leveraging opportunities in the sector.
During Simon Coveney’s trade visit to Kenya in November, Griffith College signed a partnership agreement with Nairobi’s Riara University, which will see it support the education of the country’s growing youth population. Mr Coveney also awarded International Computer Driving Licence certificates to students who are among its rising skilled workforce.
Irish companies are using innovative technologies to help improve the quality of the region’s medical care. Earlier this year, Enterprise Ireland facilitated a multimillion agreement between Novaerus Ireland and Quinton’s Pharmacy, a Kenyan-based company, which will change the landscape of infections control and prevention in East Africa.
Through its partnership with Quinton’s, Novaerus is adding value to Kenya’s healthcare system, reducing the number of infections in hospital environments and creating cost savings of approximately €12m.
Also during November’s trade visit, Dublin-based Vitro Software announced a multimillion dollar contract with The Nairobi Hospital, one of the most prestigious private hospitals in East Africa. Vitro’s electronic medical record software helps reduce change management challenges and deliver better patient outcomes.
The hospital’s Mr Odundo said: “This initiative will bear great testimony to our ability to be innovative in all matters that ensure the highest standards are met.” For Vitro Software CEO Declan Daly the agreement is a gateway to the broader East African region: “We are now well placed to grow, not just in Kenya, but to other sub-Saharan countries.”
A number of strengths make Kenya a great gateway for Irish exporters considering expansion to Africa. The port of Mombasa is a key transit point, not just for imports and exports to and from Kenya, but also to and from Uganda, Rwanda, South Sudan, and the Democratic Republic of the Congo.
Recognising the potential of the market, Enterprise Ireland appointed a dedicated trade representative for Kenya in July 2017, based in Nairobi. Interested Irish companies should attend the East Africa conference in Dublin in March 2018.
A trade mission, led by an Irish Government minister, is planned for South Africa and Kenya in May next year.
Enterprise Ireland’s advisers can help companies to identify opportunities in East Africa, get introductions to Kenyan buyers and potential partners, and get informed about important procedures, market entry barriers and license requirements.