Nairobi, the next great global city?
I’m been living in Kenya for about 4 months now. As I meet people in Nairobi, walk the marble floors of its new malls, devour a perfect chicken burrito at Pete’s, and watch a room of young professional women work on a coding problem, I can’t help it. I’m calling it right now — Nairobi is on the verge of something extraordinary.
It’s possible that Nairobi will be the next great global city. Don’t believe me?
Well, first let me tell you why I might be crazy. Risks and uncertainties do lurk around the corner.
SECURITY: Kenya faces regional instability with terrorist activity bleeding over from its northern neighbor, Somalia. We are all too familiar with the Westgate tragedy and more recently, the Garissa shooting.
CORRUPTION: Kenya ranked near the bottom — #145 out of #178 on the corruption perceptions by Transparency International. Just this month, in an unprecedented move, a coalition of twelve Western Ambassadors rebuked the nation for its on-going corruption crisis.
Some of the laws here are just bizarre. The traffic cops all around Nairobi asking for bribes are only doing exactly what they are incentivized to do. Low pay. Ridiculously high penalties and day-long waits in court for minor driving infractions. The system is rigged for them to make their living through bribes (and for the higher-ups to make the most).
A proposed law was recently circulated — that every new foreign company needed to include 30% local ownership. It did not pass, but the fact that it was even discussed gives you a sense of the level of conversation.
INFRASTRUCTURE: While infrastructure is relatively good and getting better fast, it is still only mediocre by Western standards. Water outages, wi-fi outages, and car-killing potholes are relatively common. More times than I’d like to admit, someone will just say, “TIA” (this is Africa). My “fast” internet here in a small town near Nairobi is 1MB/second. Don’t laugh.
Oh, and the TRAFFIC. And I thought L.A. was bad.
On the bright side, many things are getting better. And getting better quickly. New roads, bridges, and high-rises, expertly built by legions of Chinese workers, are popping up like African monkeys around mango gardens.
However, there’s no getting around the fact that the two big X-factors are interlinked: security and corruption. With corruption untamed, security becomes more porous. More laundered money ends up funding extremists in Somalia. If President Kenyatta can turn the tide on corruption, his impact on the future of Kenya can not be overstated. Obama said that corruption could be the “biggest impediment” to further growth. Kenyatta’s record to date is uneven at best. Though, give him credit for not being afraid to do something bold — dismissing 175+ civil servants (including 5 high-level cabinet members) in a corruption purge earlier this year.
Nonetheless, even as all of these negative factors persist, many people already believe what I do — that Kenya, and specifically Nairobi — has its best days ahead.
Consider the facts:
- Only 2 countries’ economies in the world grew faster than Kenya this past year. Cheap oil will only accelerate this growth.
- There is no other country on the planet where it’s easier to pay for anything from your phone. Kenyans did $20 billion of mobile transactions last year. Kenya boasts 40% more mobile penetration than the rest of the continent. CBS News’ 60 Minutes calls Kenya’s Mpesa mobile payment system the Future of Money. Conditions are ripe for further innovation.
- Kenya is building a $14 billion, 5,000-acre IT business hub, Konza, dubbed the “Africa’s Silicon Savannah.” Kenya is also building a $3.6 billion rail from Nairobi to Mombasa, a key port city and popular resort town for Europeans and Africans alike.
- Wrigley is building a $70M plant. That’s right, for all of you chewing gum right now; in a few years, that gum may be made in Kenya.
- A UK private equity firm just bought 70% of Kenya’s #3 telecomm provider, as the opportunities for mobile data & content abound.
- Nairobi is becoming the change-the-world capital of the world (paywall). Impact investors are pouring in millions into businesses that are addressing problems related to poverty.
- Kenya’s nature resources are astounding. The soil is fertile, and the climate is perfect for farming. Agro-business opportunities for progressive farmers are limitless. Kenya is building Africa’s largest and the world’s most efficient wind farm. In the dry northern region, massive underground water supplies have been found. As have significant oil reserves.
- Kenya’s economy is diversifying outside of just tea/coffee imports and tourism — Nairobi is now a regional hub for telecommunications and finance. Don’t forget that scores of multinational companies have their Africa headquarters right here in Nairobi, including Toyota, Google, GE, Coca-Cola, and IBM.
- iHub. As an entrepreneur, I can’t think of any place in the world that is cooler than this. Awesome co-working space. Start-ups getting launched. A R&D division. A UX Lab. A prototyping facility called GearBox with 3D-printers, circuit-printers, and more. Awesome companies are coming out of here, like BRCK and Ushahidi.
But it’s not these facts that convince me on Nairobi’s future. It is the Kenyan people I have met.
My friend James, as a small-village farmer, is experimenting with turning cow dung into cooking gas through a cheap, innovative tarp dome design. His passion is to protect the woods from deforestation.
My friend Njedi supports the 11 kids in her house by herself through her tireless resourcefulness and different freelance gigs. She is my language teacher and somehow is also my supplier for cheese.
My friend Ken runs a successful advertising firm and a non-profit advertising firm that employs slum teenagers; he has plans to start a TV station next year.
My friend Daniel runs a successful touring/transport company and is equally comfortable talking about Nairobi traffic, K-Pop, Obama’s healthcare policies, and Dubai restaurants.
A quiet, determined hard-working entrepreneurial spirit is rising up now in just the right place at just the right time. Kenya, do you see what’s happening? Nairobi is on the verge of something extraordinary.
