Category Archives: Kenya ICT

Economic Forecasts from Citi, Barclays, World Bank, Brookings, Oxford

A roundup of recently published economic forecasts, reports, and surveys.   

AfDBThe African Development Bank’s interactive platform, #MapAfrica, maps the locations of the bank’s investments in every country across Africa.   

Also the AfDB launched their 2018 African Economic Outlook report. 

Barclays: In Nairobi this week, Barclays Africa launches the 2017/18 macro-economic report as well as the Africa Financial Markets Index,  which is a survey of 17 African stock markets.

Citi: Citi Research has just published two reports on frontier markets and one on food inflation in AfricaCiti found that frontier markets did better than developed markets and that Kenya did well (36% return on equities) despite the banking interest cap law and the prolonged election season which has now ended.

Citi’s forecasts of top picks for frontier markets in 2018 are Sri Lanka, Romania, and Kenya and they see weaknesses for Argentina, Morocco, and Egypt. The Citi rankings consider six factors: macro growth, macro imbalances, monetary factors, valuations, earnings momentum and price momentum for their forecasts. Citi also ranked five top stock for frontier markets BGEO Group (Georgia), Humansoft (Kuwait), IDH (Egypt), KCB (Kenya) and MHP (Ukraine). For KCB they like the growth profile of corporate and salaried customers from which the bank will grow market its share even if the banking law remains the same.

The Citi forecasts also looked at the Kenyan currency (shilling) which has remained stable relative to other African currencies and how it will continue to do so even with the country’s balance of payments deficits and heightened politics. But they found that one problem with making Kenya predictions is that a significant portion of inflows that offset the current account deficit is classified as other flows, and their timing is not predictable. They assume that the inflows are from the East and Central Africa region that sees Kenya as a safe haven, despite the politics of the second half of 2017. Another finding was that devaluation of currencies have a bigger impact on food inflation in sub-Saharan Africa but Kenya which had drought and food security issues in 2017 is able to draw on food production from its neighbors (Ethiopia, Tanzania, Uganda) that keeps food inflation in check even though the food trade data is not captured in official statistics.

World Bank: Meanwhile the World Bank is taking heat after one of their economists admitted that the WB “Doing Business” rankings for Chile had been manipulated for political reasons. The Doing Business reports are cited by leaders of several countries such as Kenya, Rwanda, India as indicators of their good performance in office, But this one admission of political interference could trigger fall out as to the credibility of other reports, country economic forecasts, growth statistics, inflation measures and discussions with governments that the World Bank does.

The Oxford Business Group: The Oxford forecasts reviewed the year Kenya in 2017 in which growth was expected to be about 5% (down from an initial forecast of 5.8% for 2017), but still above the sub-Saharan Africa average of 2.7%. It noted the mixed agriculture performance was due to the drought that affected maize, sugar, tea. Also that Kenya’s Supreme Court decision to nullify the presidential election set a good path for the country in 2018 despite the added cost of staging two elections in 2017 affecting the government’s ability to meet budgetary targets and which later resulted in Moody’s considering a downgrade of Kenya’s debt rating.

Brookings: The Brookings forecasts are contained in Foresight Africa, an Africa-focused report  that celebrates Africa’s growth and highlights priorities for the continent. For Kenya, it contains a sum up of the ability of the country to leverage technology and innovation for things like revenue collection and uptake of products and mobile bonds (M-Akiba), M-Tiba, and IFMIS. It mentions that Kenya can balance the impact of special economic zones and infrastructure from China against politics and that the successful launch of the SGR in May 2017 could one day serve Uganda Rwanda, Burundi and even Tanzania South Sudan and Ethiopia. It has special sections on the 2017 Kenya election and the M-Akiba bond (“The KSh 150.04 million (approximately $1.5 million) uptake of the M-Akiba bond was mainly dominated by small investors who invested less than KSh 10,000 (approximately $100)”)

Huawei Mate 10 Kenya Launch

Huawei has launched its Mate 10, a premium phone in Kenya in conjunction with e-commerce platform Jumia. The company which now sells 140 million phones a year, and aims to power past Samsung and Apple in the global phone sales race, has been in Kenya for 19 years powering base-stations, communications, surveillance, and fibre networks, devices and systems including M-Pesa and will next do intelligent traffic lights starting in Nairobi.

Huwaei’s traditions of innovation, research, engineering, patents and new technology are all seen in the Huawei Mate 10 which is compact than its Mate 9 predecessor, but with the same screen size. The Huawei Mate 10 runs on Android 8.0 and is powered by the Kirin 970, a powerful Huawei-made chipset which enables the artificial intelligence (AI) capabilities for the phone to study the phone user’s habits, and predicts future usage and allocates phone resources to enhance the user experience.

The AI also allows real-time translation on the phone, by voice or of documents, by taking a picture (e.g. of a page of Chinese text) of 50 languages (and counting). This happens on the phone, not in the cloud, and this provides better privacy & security for the user, minimizes data usage and is faster. Huawei has a partnership with camera maker Leica that has seen them enhance photography capabilities; e.g. the Mate 10 camera recognizes millions of images of people, scenes and objects like food being photographed and optimizes the settings to produce better pictures from the combination of two 20X and 12X cameras.

For practical use in many markets, the Mate 10 is a dual SIM phone capable of holding two 4G SIM cards, and the new powerful battery will easily last two days with normal use despite the large screen and fast processing speeds – and a quick charge of the phone for just 20 minutes should be enough to get a full day of use. The Mate 10 has a curved back for easy grip and is spill and dust resistant.

The Mate 10 can be plugged into a screen to work like a desktop for the user to make edits and show items like demos and presentations right from the phone. The split-screen allows true multitasking of functions and the user can still take calls or check social media while working on other projects.

The Mate 10 phone is now available exclusively on Jumia for Kshs 79,999  (~$775) and for the Black Friday sale period, Jumia is offering a free power bank and a Kshs 2,000 shopper voucher. In the coming weeks, there will be more variants of the Mate 10 offered on Jumia, at Safaricom shops and the open market including the Mate 10 Lite phone that will retail for about $500.

Idea Exchange: Startup Roundup

Recent and upcoming startup events around Africa

AVCA Nairobi: The African Private Equity and Venture Capital Association (AVCA) cordially invites you to an informal evening of networking over cocktails on Wednesday, 22nd November 2017 5:30 – 9:00 pm Sarabi Pool & Supper Club Sankara Nairobi. AVCA Members and Qualified LPs: FREE, Non-AVCA Members: £25

ABLAA Africa: 7th All Africa Business Leader Awards will feature winners from West, Southern and East Africa at the AABLA Finale on November 30th in Sandton, which will be broadcast on CNBC Africa on December 7th. West Africa will be represented by Alloysius Attah, Co-Founder and CEO of Farmerline (Young Business Leader of the Year), Oluwatoyin Sanni, Group CEO of United Capital Group (Business Woman of the Year), Mustapha Njie, CEO of TAF Africa Homes (Entrepreneur of the Year), Guaranty Trust Bank (Company of the Year) and Herbert Wigwe, CEO of Access Bank (Business Leader of the Year).

Startups that use drones are welcomed.

The Airbus BizLab initiative in Africa, launched in August this year, targeted African startups innovating for future applications in the aerospace business. Startups that use Unmanned Aerial vehicles (UAVs), satellite Operations and Imagery, 3D Printing, Smart sensors, Internet of Things (IOT), smart energy and Artificial Intelligence (AI) were encouraged to apply. There were 11 finalists who were shortlisted included Aerobot Technologies – Kenya, ESIPPS International – Uganda, Kuunda Three Dee – Kenya, Maisha – Ethiopia, QTRON Industries – Kenya, Swahili Box – Kenya, Savannah Circuit Technologies – Kenya, Startup Lions – Kenya, Track Your Build – Sierra Leone, UAV Kenya – Kenya and the overall winner of the Airbus Bizlab  was lluminum, an Agri-tech startup that uses connected sensor technology with its solar panels to automate and enable remote control of greenhouses. Illuminum greenhouses will get a 10-day trip to Europe to meet with Airbus experts as well as present to Airbus Executives and investors.

I Love Black People Tour & Pitching Competition: Blockchain startup BitMari has teamed up with the National Society of Black Engineers to bring you a unique opportunity to tackle financial challenges across the global African Diaspora and has been inviting undergraduate students, graduate student, and professionals across all fields, including developers, designers, product developers, and entrepreneurs, plus businesses that want to embrace the idea of social innovation or initiatives that combine a positive mission with business. Students can now enter the pitch competition and win up to $5,000 for sending a youtube link with a 60 seconds pitch on an idea that uses Bitcoin technology which will qualify them for a hackathon at the end of November.

Innovate Ventures, the leading Somali tech and business startup accelerator launched in partnership with VC4A, Telesom the Work in Progress! Alliance, had their second cohort of 10 startups from Somaliland and Somalia graduate from their programme. This year’s accelerator saw over 400 applications received and the seed investment given doubled from $15,000 last year to $30,000. First place went to Bilan Baby, a startup that sells baby furniture, accessories and baby clothing as well as maternity products. Bilan Baby received $7,000 in seed investment. Second place went to SAMS, an agritech marketplace for farmers and buyers and Almijet, a digital printing company who received $5,000 each. Finally, Brandkii, an online marketing and advertising startup, received $3,000. Further investment was provided to Muraadso, an e-commerce startup and last year’s winners; they received $10,000.

Kenya Bankers Catalyst Award nominees include Barclays, Commercial Bank of Africa, Cooperative Bank, Diamond Trust, Equity, KCB, Kenya Women’s Finance Trust, Lendable /Levanter, National Bank, NIC, Prime, Safaricom, Standard Chartered, and Stanbic among others.

MasterCard Foundation sponsored ‘Client at the Centre’ Prize which highlights best practices in financial services where client satisfaction is a priority. Jumo, a South African based company beat close to 100 financial services firms to win the$150,000 prize in recognition of its innovative and impactful low-cost financial services that serves poor people. The winner was picked by a 400-person audience during the ongoing Mastercard Foundation’s Symposium on Financial Inclusion  2017 Symposium on Financial Inclusion in Accra, Ghana. The other two Prize finalists were ftcash, one of India’s fastest-growing financial technology ventures which aims to empower micro-merchants and small businesses with the power of digital payments and loans, and Destacame, a free online platform in Latin America that empowers users by giving them control over their data to build their financial capabilities and to access financial products.

Orange  announced the winners of the 7th Orange Social Entrepreneur Prize 2017 in Africa and the Middle East. 49 local winners who were drawn from Orange’s 17 subsidiaries in Africa and the Middle East were entered into the international contest. The winning projects this year were: 1st prize was awarded to Manzer Partazer in Madagascar, a startup that aims to reduce food waste by sharing excess food from restaurants, hotels or supermarkets.  2nd prize was awarded to City Taps which has developed a solution which bridges the gap between water services and the most disadvantaged citizens.  3rd prize was awarded to eFret.tn in Tunisia a website that links up foreign exchange senders with transport and transit professionals in Tunisia .Also a Special Content Prize was awarded to Génie Edu in Cameroon, an e-learning platform which aims to help students having problems by providing online video courses and Internet users were also invited to choose their “User Favourite” project and this was the Malagasy project Majika that facilitates access to renewable electricity and support for rural entrepreneurship.

Reuters Journalism Training Programme (Middle East & Africa): The Reuters Journalism Programme is an opportunity for recent graduates, early career reporters, or professionals with proven experience who are looking to switch careers into journalism. The programme in 2018 will consist of 6 months of formal and on-the-job journalism training, initially in our London newsroom, followed by one of our other main reporting newsrooms or bureaus in the Middle East or Africa.

 

USAID: Enterprises within the Kenya Innovation Engine (KIE), a USAID-funded program Feed the Future initiative have leveraged $8.2 million worth of private sector investment, and created more than 6,000 jobs at the business and farm level. In the course of implementation, in order to ensure sustainability, KIE-supported enterprises formed 56 strategic public-private partnerships with progressive local and international organizations such as Safaricom, Equity Bank, Microsoft Corporation and VISA. Over 670 innovation applications received in four solicitation waves and over $4.2M invested in a total of 26 awards made to date. Project awardees: Stage I (proof-of-concept): M-Farm; Quest Agriculture; The Real IPM Company; University of Nairobi; Virtual City; Kenya Medical Research Institute (KEMRI); Maseno University; Caytree Partners; and Kenya Network for Dissemination of Agricultural Technologies (KENDAT). Graduated to Stage II (pilot-roll-out): Arid Lands Information Network (ALIN), Kenya Livestock Marketing Council (KLMC), iProcure, Amtech Technologies; Wanda Organic; and Kenya Biologics. Direct entrants at Stage II (pilot-roll-out): Lachlan ; Indicus Kenya.; Value Farms and Takaful Insurance.

Village Capital is launching the Fintech Africa 2018 program in collaboration with PayPal. The U.S. headquartered VC firm is recruiting a cohort of 12-14 early-stage fintech startups to go through a three-month investment-readiness program, early next year. They are recruiting from Ghana, Kenya, Nigeria, Rwanda, South Africa, Tanzania, and Uganda and are looking for startups that address insurtech, pensions and savings, cooperative finance, and financial literacy; leverage data for credit scoring and consumer insights; and apply fintech to other sectors of interest: agriculture, energy, education, and health. Two startups will be peer selected by fellow entrepreneurs to receive $50,000 investment each. The deadline for applications is November 24.

XL Africa: Twenty of the most promising African digital start-ups will take part in the XL Africa  residency, the flagship initiative of the business accelerator launched last April by the World Bank Group’s infoDev program. The residency will conclude with the XL Africa Venture Showcase, a regional event organized in association with the African Angel Investor Summit.  With support from African investment groups, XL Africa will help the startups attract early stage capital between $250,000 and $1.5 million. Selected from a pool of over 900 applicants, the startups participating in the event are: Aerobotics (Data, South Africa), Asoko Insight (Data), Coin Afrique (Marketplace, Senegal and Benin), Edgepoint Digital (Jamii) (FinTech – Insurance, Tanzania) , Electronic Settlement (FinTech, Nigeria), Lynk Jobs (HR, Kenya), MAX (Transport, Nigeria), ogaVenue (Venue Platform, Nigeria), Ongair (SME Services, Kenya), Pesabazaar.com (FinTech, Kenya), Prepclass (EdTech, Nigeria), Printivo (Printing, Nigeria), Rasello Company (SME Services, Tanzania), Rensource (Energy, Nigeria), Sendy (Delivery, Kenya), Snapplify (Publishing, South Africa and Kenya), Sokowatch (Delivery, Kenya), TalentBase (HR, Nigeria), Timbuktu (Travel, South Africa), and Tizeti Network (Connectivity, Nigeria)

Future of Financial Services in Africa and the Middle East

Technology will continue to offer great opportunities for millions of unbanked people including groups of women, Muslims and governments in Africa, Middle East and South Asia (MEASA) and new companies who design financial services in these space.

These are the findings from a report by the Economist Intelligence Unit that was sponsored by the Dubai International Finance Centre which highlights that:

  • Findings Gaps in financial services present an opportunity for financial companies—both traditional and non- traditional players.
  • Overcoming a strong preference for cash in the MEASA region will be imperative to move towards a cashless economy
  • Blockchain has the potential to change the financial architecture in MEASA, particularly for banking.
  • New business models are being developed to reach the “missing middle” of retail investors and medium-sized businesses.
  • In Islamic finance, the approach is shifting from “sharia-compliant” to “sharia-based”
  • Governments and regulators have a crucial mandate to drive financial innovation.

It notes that there is a prevalence to use cash in the three continents (to receive wages, pay school fees and for utilities etc.) and that current regulations which require the use of ID cards are a barrier for women who need ID cards and other documents to receive these services.

The 3 billion people on the three continents will be a source of demand and supply for better financial services, and governments have a role, regulators should balance prudence with innovation, and financial service providers should collaborate for everyone to benefit.

There are opportunities for wealth and private equity funds and individuals (through crowd-funding) to support the growth of new players to take on financial sectors such as insurance, whose levels of penetration can be increased through the mobile phone as has been seen for banking and Islamic financing, by promoting sharia-based products, more than ‘sharia-compliant’ ones. Technology has the ability to address financial exclusion and scale services to millions while reducing costs and creating new revenue models; this can be through smart data to improve credit scoring models and the use of bitcoin to replace money transfers (with banks and currency conversions to international dollars).

Huawei in Kenya

Huawei Kenya held a media briefing at their Kenya headquarters near Lavington. This was refreshing as last year when they were to do a demonstration of the Nairobi Smart Cities project; they scaled it down as soon as they heard the Cabinet Secretary was not going to show up for the event.

Huawei has been operating in Kenya for 19 years since 1998. They have done lots of projects mainly in the telecommunications space; they rolled out networks for Safaricom and Telkom Kenya and also launched the Ideos, the $100 smartphone with Google and Safaricom.

The Huawei Kenya representatives spoke about ongoing projects with the government such as cloud services for the entire Kenya government, roll out of government fibre to all 47 counties, and police security & 4G networks. Since 2015 they also provide the software for M-Pesa for Vodafone to roll out across Africa and the world. They also provide about 2/3 of the infrastructure of Safaricom and also power M-Kopa solar payment systems.

Huawei is a $75 billion company with 180,000 employees (80,000 who work in R&D), and operate in 170 countries. It is entirely employee-owned by 81,000 employees in China while the founder/CEO owns  1.4% of the shares. They have 300 staff working in Kenya and provide about 100 scholarships a year for Kenyans to study in China.

In 2016, Huawei sold 139 million smartphones – (number three behind Apple and Samsung). They work hard to combat the reputation that Chinese means ‘low quality’ and Huawei is the world biggest patent filer, and have been granted over 62,000 patents. They spend over $10 billion a year in R&D – and build their own its own chipsets, batteries, and some phones have three antennas etc. to optimize their phones.