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African techno-euphoria and the origins of Kenyan mobile exceptionalism

August 30, 2012
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I’m struck by one of those periodic waves of Africa techno-euphoria as I catch up on my post holiday reading (Google Reader, twitter, email, random subscriptions – is there no end to it?). The Guardian has pieces on how the web is changing Africa and 15 innovations that are transforming the continent. Meanwhile the Economist has a fascinating piece on mobile technologies in Kenya. Some highlights:

“In 2002 Kenya’s exports of technology-related services were a piffling $16m. By 2010 that had exploded to $360m. To its boosters, Nairobi is “Silicon Savannah”.

However, it differs from its silicon sisters in one crucial regard. From the start, its tech firms have designed their products for mobile mobile money by countryphones rather than computers. Kenya is still a poor country; few of its people own laptops. But there are 74 mobile phones for every 100 Kenyans, well above the African average of 65. And nearly 99% of internet subscriptions in Kenya are on mobile phones.

Three factors helped Nairobi to become an African tech hub. The first is a supportive government. In 2005, when Bitange Ndemo was appointed as permanent secretary to the ministry of information and communications technology (ICT), Kenya was a technological backwater. Access to the internet was available only through satellite connections and was wallet-sappingly expensive. In 2009 Mr Ndemo brought the first of four undersea internet cables to the Kenyan coast. Prices plummeted and bandwidth exploded. Just under 12m of the country’s roughly 40m people now use the internet, a number that has trebled since 2009.

Second, Kenya has undergone a revolution since 2007, when M-PESA, a mobile-payments system operated by Safaricom, a phone company, was launched (see chart). Many start-ups use it as a base for their business. One team streamlined the payment of school fees through the service by helping institutions and parents keep track of upcoming and late deposits. Another offered an electronic version of Kenya’s popular informal savings groups. M-PESA has also inspired others. In May Google launched Beba, a pre-paid card for commuters using Nairobi’s local buses. Insiders say that this is a test run for a much larger cashless-payment system.

Third, since 2010 Nairobi has had a place, called the iHub, for local techies to get together and exchange ideas. The iHub has expanded to include a consulting arm, a research department and an incubation space called m:lab, which supports start-ups developing mobile applications.

Will Nairobi then compete with other emerging tech hubs such as Bangalore and Tel Aviv? Not at once, says Joe Mucheru, head of Google in Kenya. Nairobi has exported two notable innovations: M-PESA (which began life in London) and Ushahidi, a non-M-PESA Kiberaprofit platform for crowdsourcing information during disasters. But most Kenyan tech firms are coming up with solutions to local problems. One team has built a service to help poultry farmers, who waste hours sitting around watching their chickens, keep track of their brood with text-message alerts. “We need to solve the nitty-gritty first and then we can invent new things,” says Mr Mucheru.

Yet this may ultimately be the key to Kenya’s success. “We have so many problems that can also be opportunities,” says Mr Ndemo. M-Farm, a service that gives farmers access to market prices for the cost of a text message and allows them to group together to buy and sell products, has won several supporters and awards. It is the sort of thing Kenya could export to other poor countries.”

Even taken with the necessary pinch of salt (tech fixes are seldom a pain-free substitute for sorting out inequality, injustice and exclusion), these are still fascinating developments. And I’m still waiting for a really convincing explanation of Kenyan exceptionalism: according to the accompanying editorial, Safaricom handles more than half the world’s mobile money transactions.


  1. I can tell you why Kenya is out there on their own. Its what you always say – its about power.

    We work with a couple of local mobile telecoms providers here in the Oxfam Bangladesh program (mainly to provide location services for fishermen caught up in increasingly regular storms as the Bay of Bengal warms up), and have explored electronic transfers via mobiles in our emergency food security and livelihoods programs.

    The Chief exec of one of them informed me over a year ago that they could roll out Safaricom style mobile money services ‘tomorrow’ if they could get the regulatory support from government. However, a Bangladesh government that is increasingly concerned about our existing microfinance networks is unlikely to allow an explosion of e-money any time soon, and vested interests (including traders, money transfer agencies, the central bank etc.) have a huge stake in ensuring that it doesn’t happen.

    Even telecoms services such as video-conferencing are still illegal, mainly due to control by the national monopoly. Although they don’t have the capacity to monetarise such a business, they want to ensure no-one else does. The technical capacity is already there – I know this because our IT staff successfully tested a system just once, and we had someone from the regulatory authority knocking at the door to tick us off the very next day.

  2. Thanks Duncan. Here’s a precis of some research on one aspect of Kenyan exceptionalism – mobile money. Not sure if the full paper is available. Three headlines: ‘progressive’ central bank regulation, market share of main operator and management focus within that operator on people and their networks not tech.

  3. You say (tech fixes are seldom a pain-free substitute for sorting out inequality, injustice and exclusion). Agreed. But would you agree that a BIG part of Kenya’s exceptionalism was friendly telecoms and banking/financial regulation? I heard Kenya’s Central Bank Governor (Prof. Njuguna Ndung’u) say in a speech that he was asked by the banks to stop Safaricom from encroaching on their payments business and to essentially preserve their (banks) monopoly of this service. He didn’t, thank goodness!

    Secondly, Safaricom’s massive market share produced ‘network externalities’ (i.e., the high probability that someone you want to send your money to is on the network, so you will also join it and M-PESA).

  4. Sorry to sound sceptical about your scepticism Duncan but it sounds as if you are uncomfortable and disbelieving of any interventions that do not involve the unimpeachable efforts of Oxfam or similar western pillars of the neo-liberal interventionary development status quo.

    This theme of bitterness about non western NGO led success stories is noticeable in your previous posts on education, religion, humanitarian space and China in Africa among others.

    Are you ever needlessly miserablilist, patronising and critical of positive progress and reports by Oxfam in this way – ie “tech fixes are seldom a pain-free substitute for sorting out inequality, injustice and exclusion”, “techno-phoria”, “pinch of salt”?

    Coupled with your recent “rant” (your word) at academia I really think the liberal, rationalist values you and Oxfam stand for are not reflected in your recent posts.

    I intend no insult, these are just sincere efforts to encourage Oxfam to adopt a more self-critical approach. This self-criticism is most vital in Oxfam’s involvement with schools as partisan propaganda can so easily pass as legitimate education, unforgiveable when dealing with kids.

  5. You might be interested in the chapter we wrote on mobile money for a recent World Bank book:

    I think on the topic of exceptionalism: give it time, and broaden away from the mobile. Cards are increasingly becoming relevant and mobiles will probably be seen more as just one channel, interacting with others.

  6. One interesting development is the linking of mobile phone charging (a necessary service which can provide a good business opportunity for a local entrepreneur) with the spread of solar PV (solar panels or lanterns). Customers increasingly demand solar products that have a phone charging capability so in that way the two are mutually reinforcing. The Ashden organisation has awarded several examples that do this in east Africa and wider, like Barefoot Power, dLight, Rural Energy Foundation, Zara Solar (Tanzania) and Deng (Ghana). See

  7. The Ethiopian government could learn a thing or two from Kenyan investment and deregulation. It is amazing to me the number of countries that still throttle bandwidth by keeping the pipeline to the outside world in the hands of a crappy state monopoly. Sometimes this is about controlling information, more often protecting a pathetic stream of revenues to the state enterprise and its cronies. The costs of those policies were bad when it was State bottling plants or dairy farms, the opportunity cost to a country of essentially throttling the information age is incalculable.

  8. I was involved in M-PESA at the beginning. The reasons I see for it being a success in Kenya are
    1. the banks didn’t realise what was happening and were too late organising political power to stop M-PESA
    2. Safaricom was a trusted brand in a country with few trustworthy institutions
    3. the high level of literacy in Kenya. Being able to read a phone screen is a prerequisite.
    4. a small, inter-company, very dedicated team with excellent, everybody to everybody communication and working ridiculous hours for several years
    5. an incredible team of resourceful and energetic women in Kenya responsible for rolling out and promoting M-PESA in the early days.
    The last of these in particular doesn’t get the attention it deserves. I’ve seen M-PESA rollouts in several countries and no others had such a strong initial push behind them as happened in Kenya. Unfortunately, as time has gone on M-PESA rollouts to other countries have become bogged down in company politics and big company practices.

  9. Thanks Duncan, nice piece.

    Isn’t it all about having an “enabling” environment or at least being able to advocate to open space for one? That’s what makes Kenya exceptional and what make other countries “exceptional”, but on the extreme opposite…

    Why did M-PESA succeed in Kenya and Haiti or Afghanistan seem to not take similar type of systems to the same level of success? That would be an interesting comparative analysis to do and it is probably somewhere out there.

    The interesting thing to me is most of these groundbreaking changes are always prompted by the war industry (i.e. internet) or the private sector.
    In the development and humanitarian sectors we try to keep ourselves as far as possible from those carrying weapons, but we also seem not too interested in learning more and better from practices from the private sector that can improve the satisfaction of our “customers” -that is i the event we feel they really have a right to say and make us accountable.

    Long story short:

    1. Amazing but not amazed to see more and more coming from the so-called “bottom-up”
    2. We have so much to learn and much more to catch up with.
    3. it doesn’t matter what we think, the (r)evolution on the ICT started many years ago and it is up to the sector to really engage or continue being “left in the dark”
    4. What we see is “community resilience” and it is happening without any hum/dev types really “supporting” it.
    5. The best we can do is engage in the conversation, and invest in innovation -and that is not tech, but an institutional attitude!

    Apologies for the mix of topics and issues but the subject is certainly fascinating.

    Great to have more and more people writing and interested in it, worth the effort.

  10. Duncan – another angle on Kenya’s exceptionalism with respect to M-Pesa is that it seamlessly facilitates the kinds of inter-personal transactions that Kenyans undertake through their social networks. This is the underlying demand side of the equation to which supply perhaps unexpectedly responded! The points made above about regulatory open-ness, Safaricom as a near monopoly in Kenya, the energy and appropriate incentives that Safaricom put in place for the building of the agent network etc are all fine but don’t forget why people want and need such a service. See

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