kenya opportunity supporting kenya bpo development strategy presentation to the world bank singapore...
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Kenya Opportunity
Supporting Kenya BPO development Strategy
Presentation to the World Bank
Singapore June 2009
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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
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Source: Vision 2030
BPO in Vision 2030
Move towards greater efficiency and at least a 30% formal market share*
• Create 10 hubs and 1000-1500 PBGs
• 10 Tier 1 retail markets
• Add 3 new retailers with national reach
Goals for 2012
1. Tourism 2. Agriculture 4. Manufacturing
5. Business Process Offshoring
Be a top 10 long-haul tourist destination
Innovative, commercially oriented and modern
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
• 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 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
Infrastructure development
People development
Land reform
Economic pillar To maintain a sustained average economic growth rate of 10% per year over the next 25 years
Transversal reforms and
key enablers
Visions
3. Wholesale & retail
6. Financial services
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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.
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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
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Our strategy to develop the BPO sector
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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
Initiatives underway to greatly improve access to high-speed connectivity; 2 programs are
Government-sponsored.
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Uganda
Tanzania
Somalia
INDIAN OCEAN
Ethiopia
Eastern
North Eastern
Coast
CentralNyanza
Rift Valley
Western
Lokichoggio
Lodwar
Kitale
Weybuye __
Kakamega
Eldoret
Kisumu
Kisii
Kericho Bomet
Narok
Rongo
Isebania
Nairobi
Kaljiado
Namanga
Tala
Kitui
Makau
Mwingi
Garissa
Garsen
Thika
Muranga
Nyeri
Embu
Meru
Nanyuki
Nyahururu
Nakuru
Isielo
Wajiir
Marsabit
Moyale
Mandera
577
129
82
501
159
159
321
318
912
770
70
Mobasa
Malindi
Kilifi
Central region
Coat and North Eastern region
Telkom Kenya Network
Western Region
National Optic Fibre Backbone Initiative (NOFBI)
•5,000 Kms•Nearing Completion•Down payment paid•Completion date: February 2010.
The National Optic Fibre Backbone Initiative provides a backbone throughout Kenya
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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
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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
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Potential area of World Bank Support
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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%).
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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
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• Thank you