During this autumn, Gaia will have a strong presence in Nairobi, the ‘most intelligent’ city in Africa. Kenya, and East Africa more broadly, is where a nexus of megatrends emerges. Population growth, urbanisation and climate change are already cultivating the landscape and this momentum will only accelerate in the future. This makes Kenya a fertile ground for businesses looking for new markets and for investors seeking both return and impact.
Picture a groomed millennial sitting on a terrace with her laptop, sipping a steaming latte. An inviting scent of stone oven pizza wafts during the lunch hour as a group of startup entrepreneurs gathers around a nearby garden table to brainstorm. This is not Silicon Valley. This is Nairobi.
Kenya in 2019 is very different from what many of us would expect. Apart from its mesmerizing nature, beautiful sunsets, wild animals and great savannahs, it is more and more often a home to vibrant new businesses who want to service the region’s growing middle class. The most innovative and impactful solutions can also service the so-called bottom-of-the-pyramid, fostering wider prosperity and lifting people out of poverty.
In 2018, Kenya’s economy grew 5.7% placing it as one of the fastest growing economies in Sub-Saharan Africa. The neighbouring Ethiopia’s figures are even more impressive, 7.7% growth in 2017/18. Having used to the sluggish economic growth in Europe, for anyone interested in new business opportunities abroad, these figures are hard to ignore.
As the World Bank puts it, Kenya has the potential to be one of Africa’s success stories thanks to its growing youthful population, dynamic private sector, highly skilled workforce, improved infrastructure and its pivotal role in East Africa. It is true that many challenges remain, but it is equally true that these challenges cannot be met without private businesses and financiers who make the innovations and provide the much-needed resources. Challenges turn into opportunities.
“Due to many people lacking access to traditional banking services, Kenya is extremely developed in mobile services, and a pioneer in mobile payments. Getting a sim card here takes three minutes. You walk into Safaricom, show your passport and write your signature with your finger on a smartphone they show you. Mobile payments using M-Pesa, a virtual banking system, are accepted everywhere. Your account is linked to your SIM card and you can make payments and transfer money to vendors or friends using SMS,” says Minna Kuusisto, a Senior Consultant at Gaia, who will spend the next three months in Nairobi.
Investors globally have not missed Kenya’s potential. The country is a regional hub for impact investing. It hosts dozens of private equity and impact funds that are there for both the return and the impact. Many investors focus on industries that have great potential thanks to Kenya’s climate and demographics, such as agribusiness, renewable energy, or affordable housing. At the same time, creative industries such as fashion and design are increasingly attracting investors as well.
Aging populations and slow productivity growth are weighing down inflation and growth prospects in developed markets. Are you looking for a new market for your products and services? Can your business provide solutions to the most pressing challenges in East Africa, such as those borne by urbanization and climate change? Are you an investor looking for new investment opportunities, ready to make profit while simultaneously creating positive societal impacts?
“Gaia possesses a unique and profound understanding of the development context and innovative business models. We have relevant contacts and experience from the region, and we have analysed regional market opportunities. Now we have even stronger presence with feet on the ground, which enables an ever more systematic and active support for businesses and investors who are interested in penetrating new markets and harnessing the potential of this fast-growing region,” says Ulla Heinonen, Managing Director of Gaia.
- Minna Kuusisto, Senior Consultant, Gaia Consulting Oy, email@example.com, +358 44 260 9979 (WhatsApp)
- Ulla Heinonen, Managing Director, Gaia Consulting Oy, firstname.lastname@example.org, +358 40 550 6982