Investors Diary

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Sunday, September 9, 2007

Making Kenya Next Outsourcing Hub in Africa

Role of ICT
The 2006 Kenya ICT strategy promotes collaboration and outsourcing for economic growth and makes a good read. As a matter of fact, It is now evident that nations the world over have recognized the developmental opportunities as well as the challenges brought about by the fast-paced information age whose hallmark is information and communication technologies (ICTs). Evidence from developed countries has shown that ICTs can play a dramatic role in enhancing economic and social development by acting as a production sector for economic growth and an enabler for social development.

Sectoral Applications
ICT applications have enabled these countries make gigantic improvements in both productivity and quality in agriculture, manufacturing, infrastructure, public administration, and services such as finance, trade, distribution, marketing, education and health.

Kenya ICT Board
The newly launched Information and Communication Technology (ICT) board has started an aggressive campaign to market Kenya as the next outsourcing destination in the world after India and South Africa in this part of the world. South Africa with the largest economy and ICT infrastructure in the sub region, had been poised to lead the charge but now here comes Kenya with its fiber optic infrastructure being set up as well as the emergence of digital villages and kiosks all over the country.

The heavily funded ICT board plans to use the Sh8 billion loan it received from the World Bank in May to expand use of existing bandwidth, increase capacity for outsourcing as well as digitise the country’s 210 constituencies through digital villages.
Business Process Outsourcing is therefore an idea for 2007/08 and beyond and with enough capital you may wish to lay down strategies towards setting up a call center!

With the laying of the submarine cable and the country's fiber optic infrastructure time is now ripe for online shares trading and the emergence of online stock brockers in the league currenlty dominated by 18 brokers making it one of Kenya's exclusive clubs. The emergence of Online stockbrokers will be a move in the right direction. Currently hisanetafrica a stocks agency firm is providing online account management and reports and with the right infrastructure they can easily pounce on this new catch alongside other players as Eight Ltd and more.

As policy makers and the government strive to utilize ICT in all sectors as well as make Kenya an ICT hub it is vital to ensure the following:
Policy-Hasten the formulation of a legal and policy regime that regulates e-transaction, privacy and data protection, intellectual property rights, capacity building and generating content for the digital villages initiative, among others.
Connectivity-This will be achieved through the purchase of broadband capacity in regional and national networks for specific user groups such as universities, schools and technical colleges. Further there is need to fasten ther laying of the fiber optic cable infrastructure in the country and the under sea optic cable to connect Kenya and the world.
BPO-Speed up business process outsourcing (BPO) industry through intense marketing abroad so as to wrestle the pie from such developed economies as India. South Africa etc.
Implementation- There is need to implement the proposals of the Kenya’s National ICT Policy (2005) and ICT Strategy for Economic Growth (2006) amongst others.
Collaborations-The government should encourage partnerships with all stakeholders in maintaining a favorable climate for investment in ICT manufacturing and services.
Foreign Direct Investment-The should be full support for FDIs in this vital sector that is poised to steer Kenya towards Vision 2030.

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