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Nairobi ranked third most attractive city to investors in Africa

Kenya ranks amongst three nations perceived to be the most attractive investment destinations in Sub-Saharan Africa, a new study shows. The other countries according to the survey by global consultancy firm Ernst & Young include South Africa and Nigeria. These countries account for over 40 per cent of the total foreign direct investment (FDI) projects in the continent, according to the survey whose findings were released yesterday. Angola, which is the fourth-largest recipient of FDI projects is similarly perceived to be the fourth-most attractive investment destination. “However, investors who are not yet established in Africa are less aware of opportunities in countries other than South Africa,” the report says. According to the report, Africa’s cities are now emerging as the hotspots of economic and investment activity on the continent. “Transport corridors and trade routes are being developed to connect these cities, transforming them into sizeable urban clusters, large enough for consumer-facing companies to target,” says report.

The report says nearly 70 per cent of the respondents to the survey stressed the significance of cities and urban centres in their investment strategy in Africa. In terms of perception, city attractiveness closely mapped country appeal with half of the respondents quoting South African city as their first option. According to the report dubbed ‘2014 Africa Attractiveness’, Johannesburg is considered the most attractive city in which to do business ahead of Cape Town. Nairobi and Lagos are ranked as the third and fourth most attractive cities respectively. In North Africa, Casablanca, Cairo and Tunis are perceived as the top three cities in which to do business. Middle class “Our investors also highlighted that in order to attract greater investments, cities need to focus on the following critical factors: infrastructure (77 per cent), consumer base (73 per cent), local labour cost and productivity (73 per cent) and a skilled workforce (73 per cent),” says report.

According to the survey, Africa’s perceived attractiveness relative to other regions has improved over the past few years. Africa has moved from the third position in 2011 to become the second-most attractive investment destination in the world. This year, only North America ranks ahead of Africa in terms of investment attractiveness. “The dominant view is that change is real. Economic growth and development will continue, and will be driven by a burgeoning African middle class with growing levels of discretionary income, growth in local entrepreneurship and investment in bridging the infrastructure gap,” says. Gitahi Gachahi, EY’s Chief Executive in-charge of the East African region. According to the report, 60 per cent of the respondents said there had been an improvement in Africa’s investment attractiveness over the past year up four percentage points from the 2013 survey. Similarly, nearly three out of four respondents believe that Africa’s attractiveness will improve further over the next three years. According to the survey, Africa’s share of global FDI flows has been improving year on year. In 2013, Africa’s share of global FDI projects reached 5.7 per cent, its highest level in a decade.

Cyberoam partners Kenya’s BusinessIT Afrika to market its products

India’s Network Security appliances provider, Cyberoam -has today announced its partnership with BusinessIT Afrika Ltd, a Kenyan based company that offers IT solutions to private and public businesses. The partnership will see BusinessIT market Cyberoam’s IT security solutions of Cyberoam.

According to Philip Obondy, Cyberoam’s Channel Manager in Kenya, with the internet becoming an integral part of businesses in East Africa and especially with over 50 percent of users depending on their smartphones for connectivity, network security has become paramount in the region.

“Growing adoption of smartphones and other forms of endpoints has resulted in intensified demand to bring these endpoints into the work environment of enterprise as well as emerging businesses hence increased need for network security,” adds Vincent Muchai, BusinessIT Afrika Head of Strategy and CEO.

A recent cyber security survey in Kenya revealed that the number of cyber-attacks detected in Kenya rose by 108 percent to 5.4 million in 2013.

In response to this rising need for cyber security, BusinessIT Afrika has set up a business unit called ‘Business IT Security’. Through it, Business IT already offers an array of solutions including networking infrastructure, messaging and collaboration software, backup solutions, endpoint management services, web and mobile application development, and information management. The partnership will see BusinessIT expand to include identity based unified threat management appliances and award winning products from Cyberoam.

“To assist in ensuring internet security for millions of people who access internet via smartphones daily, Cyberoam recently introducedSophos end-point protection portfolio for sale by our partners in Kenya and Tanzania,” said Obondy.

Sophos offers a broad range of protection providing coverage for operating systems, desktops, mobile devices, gateways and Exchange servers. It can manage complex compliance requirements as well as filtering by policy and appliance. Sophos can protect off-network laptops and PCs to manage remote or traveling workforces.

“We believe that with this partnership, BusinessIT Afrika will help businesses and individuals prevent common issues like Botnet attacks, cyber-espionage, online and mobile banking fraud and anonymous proxy server attacks which are some of the key threats here,” said Muchai.

Industry analysts also observe that the increased uptake of cloud computing alongside rising interest in open networks, internet shopping and e-commerce models are some of the factors sustaining the high demand for network security in Kenya.

The collaboration was launched at Intercontinental Hotel in Nairobi and was attended by IT professionals drawn from both private and public companies.

The alliance with BusinessIT Afrika will further strengthen Cyberoam’s presence in the region, where it already has been extensively investing in expansion of network infrastructure.

Cyberoam works closely with a wide range of businesses in more than 125 countries, and has been instrumental in strengthening IT security with its award winning security appliances.

“We believe that BusinessIT Afrika fame and its team of professional techies will help promote Cyberoam platforms in Kenya,” Obondy concludes.

 

EVEREADY EA ROLLS OUT DIVERSIFICATION BUSINESS MODEL.

Eveready East Africa Limited, one of the region’s leading manufacturers of dry cell batteries has rolled out an ambitious diversification business model as part of its five year strategy aimed at increasing efficiency in its business processes and continuously satisfies consumer’s evolving needs in the East Africa region.

Panasonic to Enter into Potential Electrical Construction Materials Market in Tanzania

Panasonic Marketing Middle East & Africa (PMMAF) – the regional headquarters based in Dubai, UAE for Panasonic Corporation, Japan and a leading player in the environmentally friendly eco solutions category is looking to expand in the potential Tanzania market, as part of its thrust in the East African markets.

Having crossed milestone achievements with its “Eco Solutions” product category in the Middle East, the company aims to achieve accelerated growth in the fast growing African markets.

The launch marks the beginning of a new phase where new innovative, highly efficient, durable and a broad spectrum of wiring accessories, protection devices like circuit breakers, distribution panels and air moving solutions like ventilation fans, ceiling fans, electric fans, stand fans etc will all be made available under a common platform.

The new category launch announced by Panasonic Marketing Middle East & Africa along with its valued and esteemed business partner United Traders LLC, Tanzania was well attended by over 200 guests encompassing Architects, Consultants, Contractors Dealers, and Developers. Alongside Mr Tatsuya Kumazawa, Director, Eco Solutions Category, Panasonic Marketing Middle East & Africa, the event was graced by other top officials from Panasonic Corporation in Japan and senior officials from Tanzania.

Speaking at the launch, Tatsuya Kumazawa said, “According to a recent report published by the African Economic Outlook (AEO), the economy of Tanzania is projected to grow by around 7% in 2014 and 2015. The country is currently witnessing an expansion in the public investments as well as related investments aimed at stabilizing the economy in general. This paves the way for a buoyant electrical construction materials industry. With our strong brand image, high quality standards, long history of servicing different market for over 96 years and our strategic alliances with industry leaders like Anchor and Viko; we are well-positioned to cater to a fast growing and potential market in the coming years. The launch is also all set to benefit the neighboring economies alike, as we also plan to launch in Kenya and Uganda within this year.”

Panasonic and Anchor, India entered into a joint venture in 2007 where products such as home appliances, lighting, home automation, interior design solutions and security systems would be made available. Moving on in 2013, Panasonic also acquired major stake in leading Turkish Electrical manufacturer Viko. Viko produces electrical wiring accessories including switches, sockets, and protection devices such as circuit breakers.

Khalid.M.Salim, Co-Owner, United Traders LLC (Clock Tower Tanzania) said, “Positioned at the brink of a major shift in lifestyle trends, the construction and residential industry in Tanzania is all set to transform in the coming years and we would like to capitalize on this opportunity. Our ongoing partnership with Panasonic has been in line with the philosophy of providing innovative and high performance products that satisfy the modern day needs of the customers. With the strong line-up of quality and world-class products, we are very confident that we are well positioned to augur well for the market.”

The growing demand for high quality products in African markets are important to Panasonic’s global sales, and the company is confident that its new range of eco-friendly products and solutions will help drive sales across the region.

Ranked no 2 globally for wiring accessories, these initiatives and expansion plans are in line with Panasonic’s vision of attaining the no 1 position in the coming years. Panasonic’s future in Africa is to be known as the most preferred customer centric brand. The company believes in creating and developing products for customers, and towards contributing to the well-being of the society which is of paramount importance. Panasonic aims to add value by providing “A Better Life, A Better World”.

Mimecast Moves Into Africa And The Middle East With Grove Group

Six of the ten fastest growing world economies are African, and the International Data Corporation (IDC) expects overall IT spending in Africa to total $33.4 billion over the next five years. In fact, according to the IDC one third of all Kenyan enterprises view the implementation and expansion of cloud capabilities as a key priority for the future. With this fuelling its trajectory through the continent, leading cloud services company, Mimecast, has partnered with Grove Group to launch Mimecast’s unified information management services into Africa and the Middle East.

“Security and compliance is critical to the running of a business,” says Jonathan Zartz, Head of Channel at Grove Group. “Grove recognises a significant opportunity in bringing Mimecast into the region based on the explosive market share that Mimecast has gained in the UK and South African markets over the last five years. Grove has been a cloud security provider that has been selling email security solutions for the past nine years, so there is no doubt that Mimecast is the perfect cloud security solution for African and Middle Eastern enterprises.”

Mimecast, a leader in enterprise cloud services for the protection and management of corporate human generated data, has over 10 000 customers and nearly three million users worldwide. “Our expansion into Africa and the Middle East is incredibly exciting,” says Martin Rohde – Mimecast Business Development Manager: Africa. “Grove’s focus on bringing innovative technologies to a diverse set of markets across Africa and the Middle East, made partnering with them an opportunity to deliver our solutions to a broader and largely untouched community,” adds Rohde.

“We live in a unique period in time where we are experiencing a technological revolution,” says Zartz. “Businesses are now adapting to change through innovation and achieve massive positive transformation by adopting simple, flexible, mobile and cloud-based technologies. Grove is at the forefront of embracing this opportunity seeing significant year on year growth, even though the market is still developing,” he concludes.

The strong partnership that already exists between Grove Group and Mimecast in the UK and South Africa will act as a solid foundation for an incredible future together in the rest of Africa and the Middle East.  Whilst the complementary partnership will result in businesses across the continent gaining access to the latest cloud technologies and solutions; customer service is still a key focus for both companies as they support African and Middle Eastern businesses through this technological revolution.

BJP to open overseas office in Kenya, other African nations

Spreading its wings across the African continent where it did not have much of a presence till now, India’s ruling Bhartiya Janata Party (BJP) will be opening an overseas office in Kenya’s capital Nairobi in the next fortnight.

The party also has plans to launch offices in some other East African countries like Ethiopia, Rwanda, Tanzania, Zimbabwe and Zambia. Last weekend, it opened offices in Canada, Denmark, and Uganda.

“We have a very good structure and we are now appointing coordinators in each major town in Kenya to work for the overseas office of BJP,” Vimal Chadha, president of the Overseas Friends of BJP (OFBJP) in Kenya, told IANS.

According to Chadha, who has also served in the local community for five years in the municipal council in Nakuru, Kenya, opening these offices in East African nations will help bring these countries together with India.

The overseas offices, he said, are important for interacting with the Indian community in the countries concerned, knowing their problems and passing that information to New Delhi.

“India is also playing a greater role in the Southern African Development Community (SADC),” Chadha said.

“As our prime minister (Narendra Modi) said, ‘Let’s get the SADC nations together, and play the role of the big brother to show good governance in action’. And that is what we are doing through these different activities.”

This engagement could also enable people from Africa and other countries to look for potential investment areas in India through the opportunities the government provides, according to a Kenyan MP.

“India also needs assistance from the countries that have something that would benefit India and the same goes to the other countries,” he told IANS, adding that the local people will also feel Indians are part of their growth.

The BJP currently has offices in 32 countries in Africa, Europe, the US and other parts of the world.

Flydubai adds three new routes to East Africa

flydubai

Dubai-based flydubai added three new East African routes, bringing the total number of destinations in the carrier’s network to 80. With the launch of flights in September 2014 to Bujumbura in Burundi, Entebbe in Uganda and Kigali in Rwanda, flydubai will fly to nine destinations in Africa.

Commenting on the launch of these new routes, Ghaith Al Ghaith, Chief Executive Officer of flydubai, said: “We are delighted to announce the launch of three new East African destinations which also sees flydubai become the first national carrier from the UAE to fly to Rwanda and Burundi, underlining our commitment to opening up underserved markets.”

Flydubai’s operation to these emerging markets will provide passengers with a reliable, direct and high-quality service. Business Class, which is made available for the first time between Dubai and Burundi, will give passengers travelling to these new destinations a more comfortable and personalised travel experience.  “We have announced 17 new destinations since the start of 2014, matching the total number of destinations flydubai launched last year. We look forward to continuing to expand our network as we remain committed to supporting Dubai’s trade and tourism sectors,” Al Ghaith added.

In addition to operating between Dubai and these three new cities, flydubai has obtained the rights to carry passengers between Uganda and Burundi.

Rwanda and Burundi are home to some of the most biodiverse places.

Filled with numerous volcanoes, nature reserves and the second deepest lake in the world, the two countries also have one third of the world’s remaining Mountain Gorillas and one third of Africa’s bird species. While tourism is the largest contributor to Rwanda and Burundi’s economies, Uganda is considered one of Africa’s most progressive economies and is emerging as one of the leading commercial centres within Africa.

Within Africa, flydubai currently operates flights to Alexandria in Egypt, Khartoum and Port Sudan in Sudan, Juba in South Sudan, Ethiopia’s Addis Ababa as well as Djibouti’s capital Djibouti.

Kenya to reap big from global firm’s Sh40b software project

Software firm, Systems Applications Products ( SAP) has announced a Sh44 billion war-chest to develop tailor-made business software for Africa. The programme, to run until 2020, will focus mainly on accelerating growth in energy, utilities, financial services and telecommunications sectors in Kenya, South Africa, Nigeria, Angola and Morocco.

Announcing the plan at a press briefing in Johannesburg, South Africa, Robert Enslin (pictured), a member of SAP’s executive board, said they want to establish the continent as one of their top-five growth markets globally. “The African market is unique in its growth potential and readiness to innovate. The SAP executive board strongly believes that now is the right time to take our engagement and commitment to expand in Africa to the next level,” said Enslin, also the firm’s president of global customer operations.

And as a long-term commitment to regional expansion and skills development, SAP will train up to 10,000 IT consultants through its Skills for Africa Programme, with an innovation hub to be built in Johannesburg. “We plan to engage and invest in even more markets while helping build the appropriate talent base for the IT industry and support our customers and partners by actively contributing toward crucial technology and business skills-sets and new employment opportunities in Africa,” said Enslin.

The Skills for Africa programme was successfully tested in Kenya, where 67 graduates were awarded SAP certification. “The launch of additional Skills for Africa scholarship programme sessions in S Africa, Kenya, Nigeria and Angola by the end of the year will foster an open business ecosystem of SAP-qualified consultants to execute various projects. This follows on the heels of the announcement last year of SAP Africa’s skills development agreement with the World Bank,” said Pfumwa Serima, SAP Africa CEO.

Standard Bank to arrive in South Sudan

Standard Bank joint CEO Sim Tshabalala

Standard Bank hopes to close the sale of its controlling stake in the London-based Global Markets business in six months’ time.

It also plans to set up a self-standing branch in South Sudan by the end of the 2014 financial year as part of its growth plans in the continent.

In results for the six months ended June, Standard Bank on Thursday reported an improvement in its rest of Africa operations. If that improvement is sustained, it gives Standard Bank an opportunity to offset challenges in South Africa, should growth slow.

In terms of total income contribution to the group, the rest of Africa constituted 30% — growing from 17% in 2010.

Personal and business banking in the rest of Africa swung to headline earnings of R53m from a loss of R201m in the interim period in 2013. “It represents a change of strategy. They are looking for high-quality customers,” Avior research analyst Harry Botha said on Thursday.

Personal and business banking in the rest of Africa grew customer numbers by 6% to 15.9-million.

Headline earnings from the overall group personal and business banking division grew 13% to R4.19bn, while its corporate and investment division suffered a 22% drop to R2.82bn, partly knocked by potential losses from fraud in physical aluminium held in bonded warehouses in China.

Standard Bank Group CEO Sim Tshabalala said on Thursday that the plan was to sustain the momentum in the rest of Africa. He said Standard Bank now had an infrastructure and a good product set in the continent, and if the macroeconomic environment remained positive the bank would sustain earnings growth.

South African personal and business banking posted a 6% rise in headline earnings to R4bn in the 2014 interim period, with the business banking unit delivering the biggest growth.

The group personal and business banking division at Standard Bank contributes 50% to group headline earnings.

However, instalment sale and finance leases — a unit within personal and business banking that provides financial facilities for the acquisition of vehicles and other assets — posed a challenge to the bank as its bad debts increased dramatically.

Credit impairments in the instalment sale and finance leases unit doubled to R504m in the six months to end-June 2014 compared with R251m before.

Mr Tshabalala attributed this partly to “suboptimal decisions” taken on credit in the instalment sale and finance leases.

At a group level Standard Bank posted a 2% rise in headline earnings to R8.3bn in the six months ended June, hit by an $80m provision held against suspected Chinese fraud affecting its commodity finance business.

The corporate and investment banking division reported a 22% fall in headline earnings to R2.8bn, contributing 34% to the Standard Bank Group.

Corporate and investment banking experienced an increase in operational costs, and slower growth rates in East Africa. The division was also affected by the alleged fraud in China.

One of the issues that Standard Bank Group will be dealing with in the next year is the maturity of its black economic empowerment deal and how it affects the transformation scorecard in terms of ownership. The scheme, known as Tutuwa, has a total value of R10.7bn.

African technology expands in Europe

AFRICANS have long used technology developed abroad, but now a Kenyan cash transfer network which bypasses banks is being adopted in Europe.

The M-Pesa mobile money transfer system which allows clients to send cash with their telephones has transformed how business is done in east Africa, and is now spreading to Romania.

“From east Africa to eastern Europe, that’s quite phenomenal when you think about it,” Michael Joseph, who heads Vodafone’s Mobile Money business, told AFP in the Kenyan capital Nairobi.

“I think that this is something the rest of the world can look at, to say that there are ideas that can emanate out of the developing world, and take it to the developed world.”

M-Pesa — or “mobile money” in east Africa’s Swahili language — was introduced in Kenya in 2007 by Safaricom, the country’s largest mobile telecommunications company, in partnership with British giant Vodafone.

Since then the service has grown exponentially, with about $40 billion (30 billion euros) flowing through the service in Kenya alone.

In Kenya, the system has become a part of daily life, with more than 18 million customers, and is used by almost two-thirds of the population with more than eight million transactions daily.

The network allows customers to bypass the traditional banking system, using an application available on the simplest of mobile phones to pay utility bills, buy a drink in a bar, or send cash to family and friends.

Boon for cash economy

Romania is the latest nation Vodafone is tapping, with its first European launch last March.

For Michi Carstoiu, an engineer in the capital Bucharest, M-Pesa complements established online payment services.

“Most importantly, I save time – plus I think the transaction fees are smaller,” Carstoiu told AFP, shortly after activating his mobile phone account at one of the 1,000 outlets already open.

The number of distribution points is expected to triple by the end of the year.

“Everyone has a mobile phone, and it is very simple to send and receive money or make payments,” he added.

Users can charge up their phones by paying in cash at mobile-money agency points, and often at one of the points where they are doing a transaction.

Similarly they can withdraw cash against mobile-money credits at an agency, or when settling a bill, much in the same way as customers in Europe can obtain cash at some supermarkets when using bank cash cards.

Agents are often found in the form of shops or street kiosks.

The outstanding credit can be sent via a special text message to others for a small transaction fee.

African countries using the system include Egypt, Lesotho, Mozambique and Tanzania, and it has also been rolled out in India.

A savings version has been set up as well, allowing those without access to formal banking systems to earn interest on their savings.

The scheme has largely succeeded in Kenya because it meets the needs of millions of people without a bank account who would otherwise operate strictly within a cash economy.

They benefit from a network of M-Pesa agents spread across the country.

First step into Europe

Officials said that Romania was chosen as the European launchpad because many people in the eastern European country still rely on cash.

“The majority of people in Romania have at least one mobile device, but more than one third of the population do not have access to conventional banking,” Joseph said.

He is targeting seven million potential Romanian customers who operate in cash alone, and the company aims to reach 300,000 customers by the year’s end.

More than $1.2 billion worth of person-to-person transactions are sent on the system each month worldwide, according to Vodafone.

In Kenya, transactions can be as small as a single cent or as much as $1,600, while in Romania up to $9,000 can be sent each day.

Moving beyond emerging markets means adapting to fresh challenges however.

The operator will face different regulatory environments, and consumers who already have access to a wide range of financial services.

For Kenyans, where the network is used for everything from paying for grocery shopping and restaurant tabs to sending cash to relatives in remote regions, the spread abroad has given some a sense of pride.

In a way, the M-Pesa system has taken banking full circle, back to the founding principles of Venetian banking when money changers began keeping ledgers of credits and debits for traders who did not want to carry gold and silver with them.

These money dealers set up networks of correspondents, or agents, who ran parallel ledgers, enabling traders who otherwise had no “banking” system, to settle accounts, paying in or drawing out cash only when necessary.

“Technology that started out in Kenya is being exported to Europe,” said 24-year-old Rhoda Kibuchi, who runs an M-Pesa outlet in Nairobi. “It’s good news.”