Kenyans hunt societal solutions in Silicon Savannah

THE best thing to be said about Kenya’s oil fields may be this: they don’t contain much oil. If the country pumped out crude at the rate of Saudi Arabia, its reserves of 600-million barrels would vanish in 52 days.

That is no bad thing in a continent in which the “resource curse” has hexed many a country. Take a look at the countries with stuff in the ground including Nigeria, Angola, Zambia, South Sudan and the Democratic Republic of Congo, and Kenya’s lack of natural bounty looks like a blessing.

Instead of oil or gas, gold or cocoa, Kenya has had to rely on ingenuity to keep itself ticking over. That matches the first success stories in Asia, where Japan, Taiwan and South Korea took off in spite of, and not because of, natural riches.

Kenya has developed one of the most diversified economies in Africa, with light manufacturing, agroprocessing, tourism, banking, remittances from the diaspora and, most significantly, a technology hub so fizzing with youthful enterprise, they call it Silicon Savannah.

Now that the commodity boom is over, Kenya, along with a few other countries in East Africa including Ethiopia, Rwanda and Tanzania, looks better placed than countries that have failed to diversify.

According to the World Bank, Kenya will grow 5.6% this year and 6.1% next year.

On a recent visit to the iHub, a multistoreyed building on Ngong Road in Nairobi, the only sound to be heard was the tap-tap of keyboards as 20-somethings, sprawling on sofas, perching on exercise balls or lounging on beanbags, worked on projects.

Juliana Rotich is executive director of Ushahidi, a company whose crowdsourcing technology has been used to map crises around the world, from earthquakes in Haiti and tsunamis in Japan, to political violence at home.

Rotich, a serial entrepreneur in her late 30s, is a director of BRCK, which produces a rugged brick-shaped modem and Wi-Fi router that provides internet access even when the power is down, an all-too-frequent occurrence in much of Africa.

Kenyans, she says, have become adept at creative solutions to everyday hassles and working around infrastructure shortfalls. “It’s the sort of thing that’s not whizz-bang, but incredibly impactful.”

One example is M-Kopa, a company that sells individual solar-panel kits to villagers who can run lights, a radio and cellphone off the power. For a down payment of $35 and daily instalments of about 50 cents, customers are guaranteed a constant electricity supply.

Once they have demonstrated creditworthiness by paying off their solar equipment, they become eligible to buy other products including fuelefficient stoves, smartphones as well as M-Kopa-powered televisions.

M-Kopa is a business, not a charity, which makes it sustainable. It is an example of “leapfrogging”, a favourite word among Afro-enthusiasts who believe technology can solve problems from poverty to corruption.

Rotich, sensibly, makes less grandiose claims.

“It’s patching up, but it’s cool,” she says. As with much technology in Kenya, M-Kopa is enabled by M-Pesa, a decade-old mobile money system that underpins Silicon Savannah.

Bob Collymore, CE of Safaricom, which developed the idea, said he knew his company was on to something when ordinary Kenyans told him they no longer used ATMs or banks. M-Pesa has brought Kenyans, from herdsmen and subsistence farmers to slum dwellers and apartment owners, into the networked economy.

Kenya might even become the world’s first cashless society were it not for politicians’ need for bundles of paper currency at election time.

There are limits to such technological workarounds. M-Kopa would be redundant if Kenya had reliable, universal power. Its success is partly a product of the state’s failure, although to be fair, Kenya has a better and more diverse energy supply than many other African countries.

Nor has there been a technological breakthrough with anything like the same effect since M-Pesa was introduced in 2007. Still, there are incremental advances.

General Electric is developing a telediagnostic health service with local start-up SevenSeas that allows screening to take place in remote clinics and to be analysed in central hubs in real time.

Safaricom has installed cameras in Nairobi and Mombasa, replete with facial recognition technology, to help fight crime and terrorism.

One must not exaggerate. Kenya is still poor, prone to ethnic violence, vulnerable to terrorist attacks and terribly corrupt. Income per capita, in purchasing power terms, is still only about $3,000, less than half the level of the Philippines, until recently considered an Asian basket case.

Still, Kenya, market-friendly, deregulated, chaotic and entrepreneurial, feels like a country on the move. As the commodity groups of Africa pick themselves off the floor and wonder what to do next, Kenya’s economy is moving across its home-built savannah. © Financial Times 2016