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Kenya Opportunity. Supporting Kenya BPO development Strategy Presentation to the World Bank Singapore June 2009. Kenya . Population (million): 37.5 Population Growth (annual %): 2.6 Area (sq km/thousands): 580.4 Capital City: Nairobi GDP Growth Rate (%): 7.0 (2007) GNI ($ billion) 25.6
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Kenya Opportunity Supporting Kenya BPO development Strategy Presentation to the World Bank Singapore June 2009
Kenya • Population (million): 37.5 • Population Growth (annual %): 2.6 • Area (sq km/thousands): 580.4 • Capital City: Nairobi • GDP Growth Rate (%): 7.0 (2007) • GNI ($ billion) 25.6 • GNI per Capita: US$680 • Life Expectancy at Birth: 53.4 years
BPO in Vision 2030 Economic pillar To maintain a sustained average economic growth rate of 10% per year over the next 25 years 5. Business Process Offshoring 1. Tourism 2. Agriculture 3. Wholesale & retail 4. Manufacturing 6. Financial services Visions Be a top 10 long-haul tourist destination Innovative, commercially oriented and modern Move towards greater efficiency and at least a 30% formal market share* Improve competitiveness to revolutionise sector Quickly become one of the top 3 BPO destinations in Africa Efficient and globally competitive driving high savings and financing investments Goals for 2012 • Increase beds from ¬40,000 to ¬65,000 • Increase visitors from 1.8 M to 3 M • Raise yields of key crops by ~3x • Better utilisation of up to 1M ha • 600K-1M new hectares made arable • Create 10 hubs and 1000-1500 PBGs • 10 Tier 1 retail markets • Add 3 new retailers with national reach • Create at least 2 SECs with at least 10 large international players as well as at least 5 SME parks • Create 7,500 direct BPO jobs, 5000 of which are in BPO park • Raise savings and investment to ~25-30% of GDP Public sector reform Transversal reforms and key enablers Infrastructure development People development Land reform Source: Vision 2030
BPO in Kenya • Kenya will focus on becoming a niche player (as other smaller-scale countries have done). • Kenya will initially concentrate on basic voice services for the English speaking market. • Under Vision 2030 Kenya will capture a part of the US 220b global market for BPO, creating at least 7,500 direct jobs and increasing GDP by Ksh 10b by 2012.
Kenya’s key challenge • Attracting new investors against a backdrop of mixed perceptions among potential investors. • Connectivity (which we are addressing) • Leveraging Talent • Office space
Initiatives underway to greatly improve access to high-speed connectivity; 2 programs are Government-sponsored. • The East Africa Marine Systems (TEAMS) • Bandwidth: 640 GB • 5,600 Kms • Contract signed. Completion date: June 2009 and will be fully operational by October 2009 when it is connected to the NOFBI • East Africa Submarine Cable System (EASSy) • 10, 000 Kms • Bandwidth: 120 GB scalable to 1.2 TB • Completion date: April 2010 (fully operational) • SEACOM • 13,700 Kms • Construction commenced 2008 ETD Mid 2009 • Bandwidth: 120 GB scalable to 1.2 TB
Central region Coat and North Eastern region Telkom Kenya Network Ethiopia Lokichoggio Mandera Western Region Lodwar Moyale 577 912 Eastern Marsabit Wajiir Kitale Rift Valley Somalia Uganda __ Weybuye Eldoret Nyahururu 70 Isielo Nanyuki Kakamega Meru North Eastern Western Nakuru 129 Nyeri 318 Embu Kisumu Garissa Muranga 321 Central Thika Makau Mwingi Nyanza Kericho Kisii Tala Kitui Bomet Nairobi 159 Rongo 82 501 770 Narok Isebania Kaljiado 159 Garsen Coast INDIAN OCEAN Namanga Malindi Kilifi Mobasa Tanzania The National Optic Fibre Backbone Initiative provides a backbone throughout Kenya • National Optic Fibre Backbone Initiative (NOFBI) • 5,000 Kms • Nearing Completion • Down payment paid • Completion date: February 2010.
Kenya’s BPO ready strengths • The available pool of employees with suitable skills and talents forms a good basis for a BPO&O sector. • An Investment ready operating environment is a top Government priority. • The communication infrastructure will soon be world class. • There is a strong presence of certain service providers (in HR, IT and Consulting). • Kenya is cost competitive and therefore likely to pass basic investor evaluation criteria for cost
Key Strategies • Marketing • Launch an international go-to-market strategy. • Operating environment • Incentives • Policy • Education • Revise common curricula for BPO • Implement short-term, specialised and highly practical BPO&O training all levels • Coordinate university–industry collaboration to develop specialised technical skills for the IT industry
World Bank support for skills development • Kenya Government will require a minimum of Ksh 8 billion (USD 95–105 million) over the next 6 years to develop the industry. • The skills required of Kenya’s envisaged BPO&O industry are for basic voice and data operators (70%), managers (5%), engineers (10%) and technicians (15%).
Skills upgrade programme • Execute extensive interventions to transform tertiary education: • Expand universities to increase the enrolment of students • Introduce a compulsory general BPO&O course in all four undergraduate university years • Offer specific, short and practical postgraduate programmes, focusing on skills required for basic voice and data operators this will be offered by TIVETs • Offer a master’s programme in BPO&O management • Collaborate with international universities to build investor credibility
