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Kenya comes of age as more firms enter regional markets

By Lewis Njoka
Thursday, June 10th, 2021 00:00 | 2 mins read
Kenya comes of age as more firms enter regional markets. Safaricom does it.

Lewis Njoka @LewisNjoka

Kenya has matured insofar as investing abroad with local companies emerging a force to reckon with on matters concerning regional investment.

On Tuesday, President Uhuru Kenyatta witnessed the issuance of an operation licence to the Safaricom-led consortium to set up a telco in Ethiopia.

Over 10 multinational telecommunication companies had initially expressed interest in the bid but it narrowed down to a race between Safaricom and MTN with the Safaricom consortium emerging the winner.

Speaking in Ethiopia during the event, President Kenyatta said the entry of Safaricom will transform by positively impacting most sectors like it had done in Kenya.

“Today’s ceremony is the first step in an exciting and rewarding opportunity for Ethiopia.

Kenya has seen the great gains and opportunities unleashed by Safaricom across the entirety of our socio-economic landscape,” he said. 

“Ethiopia now stands at the cusp of making even greater strides in Safaricom’s areas of strength which include digital presence, mobile money, telephony, data and fibre connectivity and business solutions,” he added.

Safaricom-led Global Partnership for Ethiopia consortium which won the Sh91.8 billion bid is expected to spend Sh864 billion in Ethiopia in the next 10 years.

The investment is expected to create jobs for millions of Ethiopian citizens as well as Kenyans.

Additionally, it will enhance information technology skills on both sides of the border.

Ethiopia has the second largest population in Africa after Nigeria at 112 million, making it a lucrative market highly sought after by investors.

Last year, Equity Group Holdings, another homegrown company, caused waves in the region after it acquired 66.5 per cent of Banque Commerciale Du Congo at a cost of Sh10.3 billion.

This resulted in the formation of Equity BCDC, a subsidiary of Kenya’s Equity Group Holdings in the Democratic Republic of Congo (DRC).

According to Equity Group, the subsidiary has a balance sheet in excess of $3 billion (Sh325.5 billion) and a nationwide footprint of 74 branches with a customer base of over one million people.

Speaking during the unveiling of the subsidiary in the DRC, Equity CEO James Mwangi, said the acquisition will enhance the bank’s capability to play a key role in regional economic development by facilitating cross border trade especially through trade finance and payments.

Distinctive capacity

“With its size, footprint, experience, aspiration and ambition, Equity BCDC has the distinctive capacity and unique capability to significantly contribute to positive transformation in the lives of the people of the Democratic Republic of Congo,” he said.

The subsidiary will seek to replicate Equity’s model in Kenya of democratising access to banking services and inject bring affordability and convenience into the banking industry of the DRC. 

Another local bank, I&M Holdings acquired 90 per cent of Uganda’s Orient Bank, making Uganda the fifth country where it has operations in Africa.

Other countries where I&M has operations in Africa include Rwanda, Tanzania, and Mauritius.

The entry into Uganda was an affirmation of an earlier promise the company had made in 2013 when it said I&M planned to use part of the Sh10 billion it raised in a bond to expand into the country.

In the recent past, Kenyan companies, especially banks, have made moves to expand throughout the East African.

Other local banks with presence within the East African region include DTB, KCB, Equity and Co-operative. However, it has not been all rosy for local companies expanding across the region. 

Paints manufacturer, Crown Paints, for instance, announced that its subsidiaries in Tanzania and Uganda performed poorly last year despite its Kenyan operation posting good results.

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