African Business Outlook for 2010

Africa Practice: A survey of business executives conducted by Africa Practice, a consulting firm, reveals some interesting perspectives for the coming year:
- 68% of the interviewees expect to expand their businesses significantly
- 100% expected FDI to increase in 2010 (mainly from china) (up from 69% in 2009)
- Leading business challenges are access to credit (30%) and availability of talent (35%)
- No change in US administration impact on Africa
- Increased intra-African business and moving away from a reliance on international exports was cited as key in Africa’s private sector development
- The most significant development will be technology investments and reduced costs communions costs (56%)
- But, just 54% believe that economic benefits from the 2010 world cupwill be felt only in South Africa itself.

Economist: Also writing on the World Cup is the Economist which notes

the more pressing question is whether South Africa will benefit from the World Cup. New airports and roads will attract more foreign investment to provincial cities, ...but the boost in tourism in poorer country areas will hardly offset the broken promises of investment by the crony-ridden African National Congress. And the newly built stadiums will be filled only occasionally by the national rugby team.

A worry for FIFA is that the tournament will not be African enough...There will not be many fans travelling from qualifying African countries. Many black South Africans will not be able to afford even the subsidised ticket prices for matches; gifts of tickets to nurses and teachers will be needed. So Africa’s moment may be uncomfortably white.
The article is part of their annual the The World In (2010),and this issue also has an article crowning neighboring Somalia as the worst country on Earth and which reads like it was conjured up for the satire in the onion

Standard Chartered: Also an interesting read is this future wealth report from Stanchart.

Twitter Week: Top 10 (December 11)

Twitter is a micro-blogging tool that is really nifty for doing mini-posts, forwards and other remarks that (are on any subject) and are maybe not worthy of a full blog post. Here’s a summary of my week on Twitter in a Dave Letterman top 10 format covering Bill gates in Nairobi, tiger woods gets (in)famous, Nigerian banking wars, Nairobi is becoming a tech conference hub, Fibre cable starts to take effect , and Kenyans are bad dressers but fast drinkers!

10 Get on twitter and new media before it’s too late - New Kenya airays rugby page seems to confirm @KenyaAirways is the legitimate KQ twitter a/c http://tinyurl.com/yjuzj92
- The Rwanda president @paulkagame on twitter? @gotissuez @ngeny @towmee there's a link on paulkagame.com to @paulkagame; looks legit but poorly managed account that can improve
- R/t gtbankonline Guaranty Trust Bank launches NDANI their e-News Quarterly e-zine, http://ndani.gtbank.com/ #notlazycheapkenyanbank
- r/t @mkaigwa Dear Equity Bank, you're the Safaricom of banks. Okthanksbye. #Dontmeanitinagoodway #ReasonwhyIhave2bankaccounts
- Musician Suzanne owiyo features in new #equitybank 'ni member' TV ad

9 Funny Money Tales: - the gambler who lost $127 million in Vegas http://online.wsj.com/article/SB125996714714577317.html (via @WhitlockJason)
- Nairobi star headlines today: Kalonzo denies link to 1 billion farm sale, Ruto to raise 8 billion campaign fund by 2012

8 Beer not clothes - New bar Another brand new bar in Nairobi, already full on day 2
- @rafikiz @jamesmurua is the new off-shoot of @Bacchus at old treasures langata rd
- r/t @towmee No offense to my Kenyan tweeps but at the airport i knew KQ had landed just by how dull the passengers are dressed #notsapuers

7. Kenyans government churns through money - r/t @alykhansatchu Kenya 2nd infrastructure bond oversubscribed 138% http://bit.ly/6205Lf surprised at insatiable appetite for GOK Paper. Lots of foreign interest at ~12% coupon @alykhansatchu as you said
- Bloat in Kenya government is mass employment and needless parastatals & committees-latest is 'national tourism crisis management committee'

6. Top Kenyan business women - Nominate a top 40 woman under 40 to Business Daily http://www.businessdailyafrica.com/ top40under40_at_nation.co.ke D/L 16/12 to join @justdes you can run for re-election and I’m sure you'll be re-nominated #top40

5. Tiger, Tiger, burning... - Tiger may have to bail as marriage costs more each year but his sponsors need a good family image http://tinyurl.com/ykg7lk7
- Only @TheOnion can tell it: "Investigators Still Piecing Together Weird-Ass Clues in Fucked-Up Tiger Woods Crash" http://bit.ly/8WGsZ8
- *Yawn* bill Clinton jokes being recycled into tiger woods jokes
- Tiger at #9 http://tinyurl.com/yl6cpmb but yet to be nabbed at on golf course unlike a famous Kenyan
- Go On Be A Tiger: Accenture (nee Arthur Andersen) advertisement http://tinyurl.com/ydz4un9

4. Bill in Town - #nairumor bill gates private jet is at Nairobi airport.
- @coldtusker he has 3 bombardier challengers

3. Kenya becoming tech conference central - Mobile Web East-Africa is coming to Nairobi - make sure you're there! http://bit.ly/4po1zi (via @mato74)
- R/t There are some available seats at the @ushahidi user group meeting at Strathmore University. Come on by! #UshMeet

2 Cheaper fast Internet becoming a reality: - Now that there's #fibre in Nairobi, i can finally watch the fascinating #TED Talks videos http://www.ted.com/index.php/talks
- ad in standard today - Kenya data networks say free Christmas wifi internet till January 4 http://www.kdn.co.ke (but nada at website)

1 Nigerian Bank Wars: - r/t Deadly news. Bank PHB of Nigeria reports 15-month loss of $2.5 billion: http://bit.ly/7xPwj7 .That is lethal (via @obionyeaso)
- @coldtusker 9-month pre-tax profit of all banks in kenya this year is about $500 million
- Nigerian bank wars via @obionyeaso another full page ad describing new mgt of bailed out banks as 'undertakers' http://bit.ly/4r2aIY

Can Africa Profit from the World Cup?

I was supposed to write a piece on business opportunities for the 2010 World Cup for Kenya; however the notice was short and though I started research, I never got to finish it by the deadline. Also I lost my notes and forgot about it, till I was jolted back by an e-mail from Emirates Airlines yesterday advertising world cup travel packages that include airline tickets, hotels selection and, most important, specific match tickets. I tried one and it came to about $4,000 to watch Algeria vs. England.

Back to the post, so besides global giants like Sony and Coca Cola, what other opportunities are there for Kenyan and other African nations & companies?

Airlines: while Emirates is the official partner of FIFA and can put together packages, their passengers flying to SA have to route through Dubai. Meanwhile local airlines like South African Airways, Kenya Airways, and Ethiopian Airlines that have huge footprints in Africa can fly hundreds of fans in and out of SA daily.

Road transport: Nairobi is 3,000 kilometers from Johannesburg and which would take perhaps a week to travel by road. Bunson Travels, a Nairobi agency, has scheduled an overland bus and truck transport package to South Africa, with the possibility of match tickets on some of the higher priced packages.

Tourism: The World Cup will draw thousands of people making their first or a rare trip to African continent, which can yyield opportunities for locales outside South Africa
- Beach tourism: The World Cup is associated with summer, but takes place in winter in SA (southern hemisphere), and while the weather will be relatively mild compared to Europe and US winters, its not beach strolling weather like you could get in Mombasa, Zanzibar or Seychelles.
- Regional packages: Ethiopian Airlines has travel packages that cover more than one country e.g. see the attractions of Ethiopia, Tanzania, Egypt, and Kenya and will probably sell those in SA. Likewise Kenya Airways (or local agents) who will probably have travelers from Thailand and China can draw on the same to entice people on the way back e.g. also tour the Great Rift highlands of Kenya and Ethiopia and visit athletic camps to see where world beating Olympic athletes hone their skills.

new Ole Sereni hotel neat Nairobi airport

- Nairobi hotels: these are 4 hour flight away from South Africa, and will be much cheaper than the premium priced rooms in Johannesburg next June/July. Seasoned travelers may choose to cool off and wait to minimize their hotel bills
- Sports counter programming: how about an event that takes place immediately after the world cup e.g. an international rugby tournament (safaricom safari sevens?), safari rally or a cross country event.
- Training camps: for teams to practice away from fan and media attention, but in similar climate e.g. Naivasha

Logistics: Looking at the staggering numbers from the last world cup there are opportunities for hospitality, medical, security and other personnel, including K street. In IT support, there will be data, video, broadcast, and programming opportunities all of which will need capacity e.g. at the recent zuku internet launch, the Wananchi CEO bragged about the company having more fibre capacity than the entire current usage of South Africa!

Financing: Three years ago UAP insurance launched a World Cup savings plan (what happened to it?). And while Visa is the official FIFA partner, I won’t be surprised if Equity Bank launches a ‘world cup loan’ package to enable tardy fans to finance a trip to SA.

Curios: Local companies should put their African art and curios online with local companies like verviant And mamamikes, and not have to be there in SA physically to sell them to visitors.

Governments: there are opportunities for proactive governments to get involved and promote their countries with marketing campaigns, or with travel advice for locals, expedited transit visas (JKIA) or passport renewals. See what UK government is doing.

Which other local (non SA) companies have World Cup related packages, or have started, or can position themselves to profit from the 2010 World Cup in South Africa? Please post comments below, but not unrelated advertising spam

2009 Kenya Bank Rankings Part II

10. Diamond Trust (2008 rank 11) : assets of 44.9 billion ($600 million) and nine month profits of 1 billion ($14.2 million). Loans (28.6 b) grew faster than deposits (33.1b), but expenses also grew faster than income. Neck and next with NIC and I&M banks with 44 and 41 billion in assets in position 11 and 12 respectively.
9. Commercial Bank of Africa (7): assets of 52 billion and nine month profits of 1.39 billion. Deposits flat (40 b) but loans (28.2 b) are up 20% this year and with GOK paper up 77%, however income and expenses are lower than 2008.

8. National Bank of Kenya (9): assets of 55.2 billion and nine profits of 1.4 billion. The bank is in great demand with a planned further divestment by GoK which may attract significant interest next year. For 2009, NBK has had a remarkable 40% growth this year, with 27% loans (12 b) and 48% in deposits (41 b)

7. Citibank Kenya (8) assets of 55.6 billion ($742 million) and nine month profit of 2.3 billion ($31 million). while embattled in the US, Citibank had a slow down in growth of loans (22.7 b) and deposits (29.7 b) compared to ‘08 but will still record a healthy +20% growth for year 2009.

6. CFC Stanbic (4) assets of 83.5 billion and nine month profits of 981 million. Bank had no growth in loans (43 b) and assets, but sitting on a load of cash - almost 16b billion (~$214 million)

5. Equity Bank (6) assets of 92.4 billion and nine month profits of 4.2 billion. Equity is still one of Kenya’s fastest growing banks though the 100% growth margins have tapered off to more manageable 30%+ for loans (55 b)and deposits (63 b) as it expands regionally in Uganda and Sudan and continues to roll out unique banking products.

4. Cooperative Bank of Kenya(5) with assets of 98 billion and nine month profits of 2.9 billion. The bank continues its 20%+ annual growth a year after listing and has diversified into investment banking. However their re-jigged executive shareholding following n ESOP is a sore point to be debated further.

3. Standard Chartered 3 with assets of 122 billion ($1.6 billion) and nine month profits of 5.2 billion ($69 million). Despite my earlier negative outlook, stanchart was a late bloomer and has come on strong: significantly, unlike other big banks, stanchart grew faster this year compared to 2008 - with 18% growth in deposit (89 b) and loans (40 b) while profits are up by 40% as income is up 23% compared to just 5% for costs while spearheading technologial products & services to their customers. Also increased investment in government securities by 77% and holds ~ Kshs. 36 billion now.

2. KCB (2) assets of 163 billion ($2.17 billion) and nine month profits of almost 5 billion ($66 million). KCB group is larger than Barclays in assets (185 b to 168 b) but has a smaller asset base than last year. In 2009 deposits (133 b) and loans (93 b) are up over 20% but profit is up just 3% - income is up 11% but expenses are up 15%, as KCB continued its expansion, opening six branches in November and also expanding in Rwanda Uganda, South Sudan and soon to Burundi. The bank also continues to weather occasional storms against it sustainability with triton and now Kenya planters coffee union.

1. Barclays Kenya (1)assets of 168 billion ($2.25 billion) and nine month profits of 6.63 billion ($88 million) . Barclays shrunk by 2% compared to growth of 17% a year ago with lower deposits (123 b) and loans (96 b) compared to a year ago but with profits ahead of last years pace, perhaps boosted by GoK securities investments which are up 23% this year.

Zuku Slashes Kenya Internet Prices

thanks K for the Breakfast invite

It’s been a big year for Zuku of the Wananchi Group - they got new funding and the fibre cable reached in Kenya - they are a shareholder in TEAMS which is operational (but not yet launched) and have also bought capacity on Seacom. Their CEO said the 50 gigabytes they have on TEAMS will serve the anticipated needs of their Kenyan customers for the next decade and they have the option to increase capacity on either cable.

Reduced internet prices: This morning (2/12/09), Zuku announced reduced internet prices of ~50% as follows for wimax package:
• Prosurf (256Kbps) 3,000 Kshs 1,500 (~$20)
• Supersurf (512 Kbps) 6,000 Kshs 2,500 (~$33)
• Megasurf (1 Mbps) 10,000 Kshs 4,500 (~$60)
The one time installation cost has also gone down from 5,800 to Kshs 3,000 lowering the entry barrier for homes

For small corporates and SME’s they have new Zuku Biz which is unlimited corporate broadband packages priced as follows:
• 10Mbps will cost Kshs 10,000 per month (~$133)
• 15 Mbps will cost Kshs 15,000 per month (~$200)
• 20 Mbps will cost Kshs 20,000 per month (~$266)
For these installation costs are Kshs 3,000, and equipment and VAT are included in the pricing, with security services offered at an additional cost (firewall, e-mail security, spam management)

Reaching out to property developers Zuku is currenlty available in Nairobi Nakuru Mombasa and Nyeri are already wired, and in Nairobi 40 buildings are fully wired with another 100+ having cabling up to their doorstep. By reaching out developers and property owners, Zuku hopes to convert planned, new, and existing buildings to be internet-ready properties that meet the modern demands of some of their prospective tenants for high quality affordable internet. Zuku have a dedicated team to liaise with property owners on right of way, and installation issues for buildings. (Here's a list of Nairobi fibre- ready buildings)

New Nairobi Hotel: The Zuku breakfast took place at the new Ole Sereni Hotel on the edge of the Nairobi National Park, off Mombasa Road. The building previously housed the old US Embassy in Nairobi prior to its conversion to a 134 bed 5-star hotel. Like the adjacent Panari, Ole Sereni also lies close to Nairobi’s Jomo Kenyatta Airport, shielding their guests, and transiting airline passengers, from some of Nairobi’s (now) notorious traffic jams. Though not yet officially open, and with some facilities yet to be completed, management says the hotel rooms are already fully occupied. Wildlife in the park can sometimes be observed in the early morning, and should become a regular occurrence once a waterhole is completed (inside the park fence) to be observed from the hotel’s dining room and bars which have a (relatively) pocket friendly Tusker price of 195 ($2.6)