Konza Techno City Exhibition Platform Image - by SHoP Architects

With a booming tech sector in Nairobi, investors and entrepreneurs are questioning the wisdom of building $14bn techno city nearby

Kenya’s plan to catapult itself into an elite club of technology hubs by splashing out $14.5bn (£9.3bn) on a city dubbed a “silicon savannah” will not solve fundamental financing problems facing the country’s burgeoning tech industry, say people working in the sector.

Leading figures say Konza Techno City, which the Kenyan government plans to complete by 2019, will fail to attract top talent because it is too far [37 miles] from Nairobi. Funds allocated for Konza would be better spent giving commercial lenders incentives to invest in new startups, they say.

“Our company doesn’t have a single Kenyan investor,” says Chris Asego, co-founder of Eneza Education, an SMS-based teaching service. “You realise when you go to Nairobi that most of the technological hubs are in one location – we have iHub, the Nailab, the m:lab, then you drive 100 metres from that building and you get other labs close by. Most of these hubs are supported by people who are not even Kenyans.”

Kenya’s information and communication technology (ICT) sector contributed about 12% to gross domestic product last year, showing steady growth from 2006 when it made up 9% of the economy. The Konza Technopolis Development Authority (KTDA) says that by 2020 the city will create 100,000 jobs and bring in $1bn a year.

But east Africa’s booming tech sector, which is anchored in Nairobi, would benefit more from private-sector partnerships and better ICT training and education programmes, says Josiah Mugambi, executive director of iHub. “I support the idea behind [Konza city], but I’m just not sure that it’s what’s needed right now. Many [in Kenya’s tech community] are sceptical about [Konza city]. Density is important but growing those companies that would eventually fill – or better still, would be able to build – such a city I think is more critical.”

Kenya’s national development plan, known as Vision 2030, includes a target to transform Konza into a bustling city with 200,000 people working in business outsourcing in the next 20 years, with the larger goal of becoming a world class destination for tech business, education and research.

“Konza will serve as a hub for the east African technology industries, attracting leaders from the region and beyond. Konza is not meant to compete for Nairobi business, but will complement growth. This is similar to many countries globally where there are satellite cities to decongest the capital cities,” says Catherine Adeya-Weya, chief executive of KTDA.

But not all Kenyan tech entrepreneurs think Konza is a bad move. Ken Mwenda, managing director at eMobilis Mobile Technology Academy, says: “You need to start somewhere and [Konza] is that somewhere. There have been many other disjointed government efforts and initiatives but the scale of this project means that one would have to try hard not to notice that Kenya is seriously committed to its tech industry.”

Kenya, which has long been seen as a leader in mobile technology, has 32.2m mobile subscribers giving it a 79.2% mobile penetration rate, according to the most recent quarterly report (pdf) from Kenya’s communications authority. Many of the country’s projects focus on developing products that reach Kenya’s poorest through SMS services available on basic mobile phones.

Kenya-based journalist Tom Jackson says in a blog post: “There are concerns that Kenya might be getting ahead of itself in building Konza before its ICT capabilities are up to scratch. Konza may be a brave attempt at revolutionising the sector, but many feel that it should not be the first step on the road to a booming tech sector. Local interest in investment in Konza was low.”

But multilateral organisations such as the World Bank are keen to pump funding into developing countries’ tech sectors, with Kenya touted as a model for others to follow. Jim Yong Kim, president of the World Bank, said: “What we’re seeing in Kenya is what we need to see in every part of the developing world. We also need to find ways of building business environments that will allow the development of small and medium-sized enterprises to create jobs, and we know that jobs are really the way that we’re going to end poverty.”

Source: The Guardian

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