Nairobi: Africa's digital beacon seeks its post-Covid future

Nairobi, the Kenyan capital, is on the starting blocks to emerge from the health crisis and return to growth. For years, this East Africa's major economic and diplomatic hub has struggled to shake off a reputation for crime and insecurity as unenviable as that of Lagos. The gamble paid off at the turn of the 2010s, when the wave of murderous carjackings that had left so many people homeless was halted. the expatriate community and business travellers in a perpetual state of alert. At the same time, the metropolis has given itself a a new image of high-tech innovation while seeing the emergence of a local upper social class, often educated abroad.

To achieve this transformation, Nairobi has been able to take advantage of - relatively a forerunner in Africa - to high-speed internet access, an opportunity that has given rise to a digital hub. This technological facility has enabled the city to renew itself while consolidating its position, still unrivalled in the east of the continent, as a crossroads for international diplomatic and development institutions, with many international NGOs based there.

Tourism industry hit hard

That was on 13 March 2020, when news arrived of the first Covid patient in Kenya, the country was ready to ride this technological wave In mid-March, the Manufacturing Industry Association launched a digital directory to encourage customers to source locally manufactured products online, as well as a portal so that companies can continue to source their raw materials via the Internet. paperless payment platform solutions.

Most Kenyans were already familiar with these solutions: the country is the birthplace of a revolutionary technology in Africa, the M-Pesa electronic wallet from the telecommunications company Safaricom, which has enabled a whole section of the population, from the informal economy, to rationalise their payments, whether for bills or money transfers. The value of mobile payment transactions rose from 1.6 billion dollars in 2008 to 41.3 billion in 2019. From 17 March 2020, Safaricom reduced its commissions and increased its daily transaction limit from 657 to 1,400 to encourage contactless payments, while numerous partnerships were formed between delivery companies and supermarkets and restaurants.

This useful effort has not succeeded in putting a lasting stop to the economic tsunami that has hit the service sector. 80 % of Kenyan companies are small and medium-sized enterprises, which generate around 75 % of all jobs and 30 % of annual GDP. Tourism (10 % of GDP, 9 % of jobs) and the hotel and restaurant services industry play a predominant economic role. From 25 March 2020, the disruption to air traffic has hit the tourism industry hard. The sector, which is one of the country's leading sources of foreign currency, has lost most of its business, with just 439,487 international tourists in 2020, compared with 1.54 million the previous year.

The consequences are dramatic in the country's fifty or so nature parks, only six of which are profitable according to the government. Thousands of rangers who look after these parks have found themselves without an income. The debate on the question of the partial privatisation of these natural areas is open and already promises to be stormy. The absence of tourists has also hurt the hotel industry, including the top end of the market. Five months after the suspension of international flights, the 389-room InterContinental hotel in the capital closed its doors, stifled by its debts and the disaffection of its customers.

A slow return to normal in Nairobi

The recent lifting of numerous restrictions and the resumption of international flights are gradually opening up a new chapter. Some hotels had already adapted their offer. For example, the five-star Sankara Nairobi, member of Marriott's Autograph CollectionBy the end of 2020, the hotel chain was beginning to offer a dozen private rooms for business lunches. From now on, while the buffets will remain closed, the restaurants of the major hotels will be opening spaced tables, with Draconian hygiene rules These include sanitary stations at the entrance to the restaurant, online menus or menus accessible by QR code, compulsory masks and dishes served under cloche to avoid any risk of contamination between the kitchen and the dining room. Many restaurants have had to halve their clientele to comply with the social distancing rules.

The question is how business travellers will return. There has already been some progress among expatriates. On the French side, " There have been a few normal departures linked to turnover, but there have also been cases of people who have left but not yet returned: this is the case for "non-essential persons". who are not yet authorised to return to Kenya It's not always easy to keep a family together," says Christelle Adjagba, President of Nairobi Accueil, an association of French expatriates. As a result, expatriate families are still separated. " The number of members has fallen by 30 to 40 % compared with last year, and there are far fewer new arrivals: no more than ten this year, compared with around forty in 2019. "she adds.

This decline is undeniably a sign of a sharp slowdown in travel linked to French investment in Kenya. This represents around 10 % of foreign direct investment in Kenya, French companies' interest in the country was growing before the health crisis hit. The number of sites had risen from 35 in 2012 to 110 by January 2019. Some of these companies have a long-standing presence, such as Lafarge-Holcim, which has a stake in Bamburi Cement, and Total Distribution Kenya, which has acquired a local network. Schneider-Electric and L'Oréal also acquired an industrial partner in the country in 2015. The retail sector is also well represented, with Carrefour and more recently Décathlon.

Assets, but also clouds for the recovery

In other words, the capital is eagerly awaiting the complete reopening of the borders to reassure foreign investors and boost its service sector, on which millions of employees in a precarious situation depend. To get back on trackthe authorities are naturally counting on the resilience of the digital innovation sectorparticularly as this area of the economy is of interest to more and more foreign investors and attracts programmers and software companies.

As early as 2007, the famous M-Pesa money transfer app put Nairobi at the forefront of mobile innovations in finance, and in 2009 it was the first mobile phone to be launched in Nairobi, the Kenyan government has kicked the high-tech sector into high gear thanks to TEAMS, an undersea fibre-optic cable. Kenyans could now access the internet quickly and cheaply. The following year, the IHub was officially inaugurated in the Bishop Magua Center, a building in Nairobi that at the time was emblematic of the Kenyan technology community. Recently acquired byNigerian incubator Co-creation Hub (CcHUB), it has already incubated more than 450 start-ups, some of them very well known, such as Ushahidi ('testimony' in Swahili), a crowdsourcing website created to map incidents of violence during the crisis in Kenya between 2007 and 2008 and since used for other situations of international violence.

A pioneer of the continent's digital economy and having helped raise over 40 million dollars in funds, the IHub, now allied with the CcHUB, is today nurturing major ambitions such as building a pan-African community platform for the Internet of Thingsa project called Wakanda. This trend towards pan-African technological innovation can also be seen at 888mph. This start-up accelerator, founded in 2011 in Nairobi, focuses on web and mobile start-ups and has opened hubs in Cape Town and Lagos, the two other African centres of the digital industry.

For its part, the Kenyan government is trying to capitalise on this high-tech scene by including it in the targets of its Vision 2030 strategic plan which includes developments at the Konza technology park and a universal internet access. The government is also betting heavily on investment in the "blue economy linked to the oceans and has begun to develop infrastructure in fishing areas in the hope of boosting their contribution to economic growth and employment. But the future of all these projects seems to depend more on the prospects for private investment than on state funding.

In the spring, the announcement that the International Monetary Fund was going to grant Kenya a new loan of 2.34 billion dollars over three years was greeted with consternation in the country. Several petitions were circulated calling on the international institution to decide not to grant the funds because of the corruption scandals in the use of previous loans. One thing is certain: Kenya, whose debt is expected to reach 73 % of gross domestic product in 2022-23, is going to have to go through a phase of austerity at the very time when it is banking everything on the recovery and the return of tourists.