Kenyan economy set to rise further, driven by mobile money and network coverage boom.
By Katie Mcevinney
- Kenya’s total number of mobile subscriptions grew by 5.6 percent to 32.2 million at the end of June 2014 (population of Kenya is 45 million)
- 20 Billion US dollars passed through M-Pesa mobile money service in 11 months in 2014
- Signal penetration (coverage) in the country rose to 79.2 percent
- Data/internet subscriptions reached 14 million
Eastern African economies are continuing to grow stronger, particularly in Kenya, whose public investment and solid infrastructure, lends itself to more opportunity for development in the future.
According to the most recent Kenya Economic Update (KEU), economic growth in Kenya is expected to jump from 5.4 percent in 2014 to 6-7 percent by 2017, establishing itself as one of the fastest-growing economies in Sub-Saharan Africa according to the World Bank.
Diarietou Gaye, the World Bank’s Country Director for Kenya, said in regards to the report: “Kenya is emerging as one of Africa’s key growth centers with sound economic policies in place for future improvement.”
For enterprises like Cojengo – whose vision is to improve animal health in the developing world – the opportunities presented are evident, and this growth in enterprise will bring benefits, not only for these companies based in Eastern Africa, but for the people who actually live and work there too.
There are still several challenges however, especially for foreign companies starting out in Kenya and other Eastern African countries, which underline the need to adapt to a different, changing world of business.
The most apparent difference is the challenging prospect of operating in large numbers of rural and agricultural areas, in which banks can be often scarce. Not only is this a challenge for businesses like Cojengo operating in Eastern Africa with farmers and vets, but also for the citizens living in sparsely populated areas who lack formal financial services.
This is perhaps why the mobile banking system, M-PESA, founded in 2007 by Safaricom has garnered its largest success in Kenya. Over 17m Kenyans now use M-PESA - the banking service based on transferring money through SMS messaging on smartphones – with around 2 trillion Kenyan shillings (around 20 billion US dollars) passed through the service in 11 months in 2014, according to Business Mind.
The country has since been labeled the leader in ‘mobile money’ on a number of occasions, paving the way for other African countries such as Tanzania to follow suit, while also facilitating more successful start-up businesses in Kenya. With the presence of the M-PESA success in the world’s fastest growing mobile market, and the road to significant economic improvement expected, the future for enterprises working in Kenya, like Cojengo, stands clear.