Mergers, Acquisitions and Financial Results

There is a new private technology business development network - - with a mission to promote the rapid growth of innovative and profitable technology-driven ventures in Kenya, was launched early this month in Nairobi.

"It will serve as an online clearing house bringing together entrepreneurs, interns, mentors, investors, incubators and other partners in order to create wealth and generate jobs for Kenyans," Peter Kamacia, founder and chief executive officer, said last week.

"Such networks are a critical ingredient for the early success of the Government’s economic recovery strategy."The emergence of the technology business development centre reflects the increasing presence in Kenya of the ICT business, which is one of the fastest growing sectors in the economy propelled by mobile telephony and the Internet.

Kamacia said is looking up to cash in on the wave of anticipated investments in the country brought about by the liberalisation of the Very Small Aperture Terminal (Vsat) technology , a move that has sparked the evolution of data networks.

Last week, for instance, saw the launch of Kenya Data Networks Limited (KDN), the latest data communications carrier in the local market.These networks are behind the phenomenal success of such technology hubs like Bangalore in India and other emerging technology areas like Cape Town in South Africa, Accra (Ghana) and Port Loius in Mauritius, according to the founder.

"They also re-assure international investors and joint-venture partners that their investments are part of a professional business community," Kamacia, who has worked in the technology world for over 10 years, said.

He went on to explain that’s prime objective is to help entrepreneurs find local and international investors for their technology-driven ventures.

By December last year, US Information Technology (IT) companies were jostling to promise customers cheaper and flexible services using technology professionals in low wage countries such as India, China and Mexico, according to the CNET website.

Hewlett-Packard (HP), for example, already has several thousands of services employees in the Indian sub-continent, while computer services giant Electronic Data Systems announced its "Best Shore" programme, promising a 40 per cent increase in personnel and resources devoted to low-cost applications services centres around the world, according to the CNET report.

By 2015, a total of 3.3 million US jobs and US$136 million in wages will transfer offshore to countries such as India, Russia, China and the Philippines, according to Forrester Research.

"With local Treasury Bill rates just below two per cent, a double digit inflation and currency in circulation at Sh60 billion, the financial market appears ripe for new investment vehicles," Kamacia argues.

Kamacia said technology-driven ventures backed by solid business plans prepared by entrepreneurs and other key stakeholders will charm investors in search of better returns.

"Our second goal is to promote the establishment of business incubators or technology parks to host technology- driven ventures," Kamacia told The Financial Standard.

A business incubator is an office or factory facility that houses its tenants by giving them space on flexible terms and shared services such as meeting areas, secretariat, accounting, research computer and even production-related facilities.

They offer a range of business development services to enhance the success and growth of their tenants, and ventures located in such incubators or parks can save up to 40 per cent of their costs, said the consultant.

Through this network, is hoping to involve Kenyans living overseas as both entrepreneurs and/or investors in technology-driven business based Kenya. "As professionals working abroad, they have first hand experience of technology and should therefore be at the forefront in transferring technology to Kenya," Kamacia said.

"We aim to facilitate this process by proving the Kenyan Diaspora with a dynamic network that is ready and willing to collaborate with them."

As part of its mission, if focused on ensuring Kenya becomes an active player in the lucrative outsourcing industry. To this end, the centre has scheduled a series of seminars over the next few months on global outsourcing , business processing and contract manufacturing , for technology entrepreneurs and investors.

India and Philippines have taken the lead in this field. "Africa’s leading economy, South Africa, has turned outsourcing into a growth opportunity," Alexander Erwin, the country’s Minister of Trade and Industry said in an interview published by Wall Street & Technology Online in January 2003.

The country has about 500 call centres, with a majority of them having the range of 50 seats and some even averaging 1,000, the minister said. Call centres are still under-developed and the only documented call centre by is being installed at the Export Processing Zone (EPZ), Kamacia said.

Computer Sciences Corporation SA (CSC) has secured a multi-million rand contract to provide insurance BPO support to CSC clients in the Americas and the deal has already begun creating jobs in Cape Town, Itweb, a South African technology news site, reported in April.

Ghana has not been left behind in looking to offshore BPO to diversify the revenue stream for her economy, IDG News Service says, adding that some companies like Florida-based Global Response Corporation and Dallas-affiliated Computer Service Inc, Data Management International Inc of Wilmington, Delaware, already have offices in the West African nation.

Kamacia hailed the abolition of tax on imported computers and their accessories in the 2003 Budget, saying the move will boost the growth of ICT in the country.

Said the CEO: "The ball is now in the court of local investors and entrepreneurs. The Government has done its part by building the road."

Financial Standard via LiquidAfrica