Will Konza Technology City take off?
The government of Kenya has recently stepped up a publicity campaign about the proposed technopolis that is Konza City. Situated about 60Km from Nairobi on the Mombasa-Nairobi road, the proposed area was selected due to its proximity to the capital city Nairobi and the flat terrain that makes designing a city on it simpler. The city is part of the Vision 2030 grand plan that is aimed to make Kenya a middle-income country by the year 2030 AD. McKinsey and company helped the Kenyan government draft this vision even though critics say its has striking similarities to the Bahrain Vision 2030.
Since Kenya’s independence, there have been visions of one form or the other such as “water for all by the year 2000″ and many other ‘Nyayo’ projects, however, the Vision 2030 project is the grandest of them all as it is arguably the first well though out plan to help the country develop its social, economic and political welfare hot in the heels of the successful implementation of the Economic Recovery Strategy for Wealth and Employment Creation (ERS), responsible for the country’s GDP growth from a low of 0.6% and gradual rise to 6.1% in 2006. (Source: Wikipedia)
In the grand scheme of things, Konza city is supposed to attract multinational technology companies to set up base in the country (and by technology i don’t just mean IT, it encompasses areas of Bio technology, robotics, nano-technology etc). By doing so, these companies are to contribute to the country’s development into a mid income country.
Sadly in our clouded mindsets of considering land as a very valuable asset, the government is “Offering land” to the likes of HP, RIM, Sony and Apple as incentive to set up base in Kenya. land…really? Recently the government in the same mood of land dishing escapades offered Bharti Airtel some land next to Yaya to build its Africa head office. The land offer has since encountered hurdles and was stopped by the local courts on grounds of contravening the Public Procurement and Disposal Act of 2005. So Apple Inc with over 100 Billion dollars in liquid cash in their bank accounts is supposed to be over the moon and in dire need to set up its Africa HQ in Machakos due to two or so acres of land they will get for free from GoK. Apple Inc can buy the entire country if they want with the kind of money they have. These companies need a better incentive than being offered some parched piece of land.
The question then is: What can attract these companies to Kenya?
An Educated work force
Kenya boasts of a well-educated work force with a good mastery of the English language. Sadly majority of this work force falls far behind what these multinationals would expect to employ. Our education system lacks the infrastructure or trainers to prepare a workforce ready to work for these companies. With majority of them being under graduates and not full graduates, their level of thinking and quality of output is disappointing by international standards. Instead of offering land to Apple and HP, the government should first invest in revamping the education sector. it could start this by making tertiary education affordable and also making a Master’s degree as the first professional degree and doing away with the Bachelors. Countries such as Germany, Austria, Russia, Greece, Poland and Spain have done this to great success. This step plus the revision of the entire university syllabus to make it relevant to the market demands will ensure that the country’s work force offers the right skills that can attract these companies. There will also be the need to create an all round work force that understands the environment it operates in, majority of the graduates from local universities do not venture beyond their areas of specialization and can therefore not contribute much in a multi-talented team other than what is expected of them. Majority of the technology companies in Kenya today are hiring expatriates due to the shortage of local qualified and skilled personnel. Look around your office and count the ratio of true local and foreign experts. This is especially true at mid and high level management positions.
Stop Unending Politics
The fact that we have presidential and parliamentary elections every 5 years that come with some level of uncertainty in the economy means that making long-term investments in Kenya by these technology companies will be a tricky affair. Kenyans need to stop politicking to the extent of scaring away would-be investors. As a write this, its February but the country is already in an election mood for elections that might be in December or March next year. Such a politically charged environment will do us more harm than good in our bid to attract these companies. This change will have to start with our politicians who should focus on development and stop politicizing everything happening in the country. They should also know that the would-be Konza investors are listening and watching them on TV and social media and on live broadcasts from the ICC.
Stabilize the Economy
The technology sector will not be the only contributor to the GDP. There are other sectors of the economy that the government need to ensure that they also thrive. Tourism, Agriculture and Service sector are also in need to attention similar to that given to technology. unfortunately this is not the case, coffee bushes are being cleared to pave way to real estate projects, farmers continue to be fleeced by middlemen and fake farm inputs cartels, post harvest technology is virtually non-existent and news items about farm produce going to waste in farms is now common.
Fiscal and monetary policies implemented by the government leave a lot to be desired and appointments to critical decision-making positions are still based on tribal and political criteria. Unless we focus on stabilizing the economy and maintain a steady growth, the Konza city project will be a spectacular failure.
Kenya is ranked as one of the most corrupt countries in Africa. Majority of the companies Kenya hopes to attract have a strong ethics and culture against corruption, recently a French court jailed directors of a company that engaged in the corrupt practice of bribery in Africa. Unless we eradicate corruption, it will be very hard to attract some of them into the country. The recent ruling by the Indian supreme court cancelling 122 GSM licenses that were fraudulently and corruptly issued have seen several multinationals plan their exit from the Indian market while some saw a rapid decline of their stock value. Corruption will be Kenya’s Achilles heel in the bid to build the silicon valley of the savanna at Konza. The recent advice by the attorney general to the ministry of information to stop issuing the land to predetermined companies and instead go for a bidding process also went unheeded, The AG said that doing this went against the Public Procurement and Disposal Act (PPDA) 2005, which bars sale or tender by the government to a predetermined person or group. This already opens up the city and its would-be investors to lawsuits. These lawsuits will not come from companies that actually wanted to set up shop at Konza and missed the opportunity, but by competitors of those who got the land by direct allocation to expand into Kenya so as to embroil them in long legal tussles and scuttle their expansion plans to new markets.
Other than land, there is no noticeable activity to enhance the infrastructure and other amenities at Konza, no water supply dam is being built nor is there a major road expansion project to the site. With the governments track record of not keeping promises, investors will be wary of building premises without the basic amenities of water, electricity and roads in place first. By now we should have seen a flurry of activities in water reservoir construction, roads expansion and additional electric power supply towards the city. Kenya has perfected a culture of offering land without supporting services and still charge stamp duty for it. Look at the recent real estate development areas like Athi-river, Mwiki, Syokimau and Rongai, they lack roads, water and sanitation facilities and a constant supply of electricity.
The development of a city is a long-term activity and not a ‘project‘. I am not convinced that the government has the will power required to run and maintain a completely new city when our existing cities are already in dire need of attention. It will take a lot of convincing to investors that Konza will be different from Nairobi or Mombasa and that it will also not be plagued by land grabbing, uncontrolled development of structures and traffic jams. It is laughable how the same government that has been unable to expand services and amenities within the existing city will be able to allocate resources to do so in a new city in which will not host the seat of government. We should start by making Nairobi city a more habitable place as evidence of our ability to run a new city. What the promoters of Konza city forget is that these investors will be coming to run a business and make a profit, not to run the city. So the flashy design of the proposed city and its maintenance will be Kenya’s responsibility and not Apple’s, HP’s, Google’s or Oracle’s.
Comments are welcome.