Kenya pushes forward with “Silicon Savannah”

English: I&M Bank Tower in Nairobi, Kenya

English: I&M Bank Tower in Nairobi, Kenya (Photo credit: Wikipedia)

Kenya has begun building the recently dubbed ‘Silicon Savannah’ development in Konza, about 60km south of Nairobi and the project is widely expected to be a game-changer for Kenya’s $36bn economy. The country that has focused on technology as a means of economic progress, and brought the continent breakthroughs such as M-PESA and Ushahidi, has now turned it’s attention to ensuring that it is one of the main centres of Africa’s technology sector. M-PESA is the country’s mobile phone banking system which empowers people by allowing the simple transfer of money through a mobile device and has helped the previously “unbanked”. Indeed, it estimated that the service transfers the equivalent of 27% of the country’s GDP. M-PESA has seen a massive uptake in Kenya and Tanzania and has recently launched in India targeting 220m people in Eastern parts of the country. Ushahidi is an open source, not for profit project that allows users to crowdsource information via multiple channels including mobile, the web, and twitter.

Construction on the 5,000 acre piece of land in Konza, has begun in an effort to turn Konza into the most modern city in Africa. The project has been split into 4 phases, with the initial phase planned for completion in 2017. Encouragingly, it has been reported that the development is not just about attracting technology firms to the site, but is also a way of circumventing the country’s corruption, which has been deeply embedded for decades. The site is also projected to create 200,000 jobs when completed in 2030, as well as schools and universities. Konza – economically and politically a “new city” in Africa – may well act as a blueprint for further developments on the continent.

The project is a natural progression for Kenya’s aspirations to be the technology hub in Africa, and organisations such as IBM, Google, Microsoft and Intel have their regional headquarters there. Concerns however have been raised about the fact that most of the companies being formed in Kenya are based on a single app or software programme, making them economically vulnerable. In addition, despite clear progress in the technology sector, the Kenyan government still has a long way to go in addressing the country’s 40% unemployment rate.

M-Pesa arrives in India

English: A poster advertising the introduction...

English: A poster advertising the introduction of the mobile payment service M-Pesa in Tanzania (Photo credit: Wikipedia)

The Vodacom M-Pesa mobile banking service has been a huge success in many African countries and has recently launched in parts of India. After the huge success the M-Pesa service has had in Africa, it is hoped that the service will have the same impact in India. We take traditional banking services for granted in the West, but huge numbers of people in developing countries simply don’t have access. M-Pesa offers a way of empowering people and allows for the free flow of money in countries like Kenya, Tanzania and now India. M-Pesa adopts a simple, text-based approach to enable users to deposit and withdraw from specific M-Pesa outlets, carry out transfers, make payments at retail outlets and pay utility bills.

The M-Pesa service from Vodacom will target 700m people in India who currently don’t have access to banking services. It is being launched in partnership with ICICI Bank and will initially target 220m people in Eastern areas of India with the aim of reaching the 700m people in India with no access to banking services.

Whereas there is currently a ‘land grab’ in the UK for the potentially lucrative mobile payment market, with the likes of Google, PayPal, VISA, the newly launched WEVE and Retail outlets all jostling for position in what is likely to be a long and complicated process, more simple solutions in developing countries are likely to have more of an impact on peoples everyday lives. It may indeed be places like India and Africa that lead the way with mobile payment services, allowing for countries like the US and UK to learn from the process. Indeed, whereby mobile payments play such a crucial role in peoples lives, the issue of ‘trust’ around the security of the system is circumvented and progress is potentially quicker.

Marten Pieters, managing director and CEO of Vodafone India, stated

For millions of people in India, a mobile phone is a bank account, a front door to a micro-business or a lifeline to people in the remotest areas. Research shows that M-Pesa brings real benefits to users in their daily lives, saving three hours a week of their time and around $3 in money transfer costs – a significant amount to people in some areas.