HUSTLE E.A APRIL 2019

HUSTLE ISSUE 003

VOLUME 017

APRIL 2019

EAST AFRICA

Africa's business magazine for the entrepreneur

INSIDE Passionate biker behind Kenya’s first locally made motorcycle

Esther Muchemi’s Midas Touch

Can M-Pesa’s runaway success be replicated across Africa?

How resilient entreprenuer rose to the top KSH 350

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CONTENTS

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12

22

28

36

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WELCOME..............................................................................7

14

QUOTES.................................................................................8 BRIEFS •Guinness to reward Kenyans with trip to Egypt...................9 • Coke Studio Africa 2019 to fly Kenyans to a music festival in Santorini, Greece...........................................................10 • Kenya’s Meru County to benefit from UN-Habitat’s finance and economic....................................................................11

21

OPINION •Can Africa’s energy crisis be resolved?.............................12

BUY KENYA BUILD KENYA •Passionate biker behind Kenya’s first locally made motorcycle.......................................................................14

MAIN STORY • Esther Muchemi’s Midas Touch........................................18 • “I thirst for greatness beyond what I can perceive”- Esther Muchemi...........................................................................20 • Give Me My Mountain.....................................................21

MAIN FEATURE • How to revive the ‘Buy Kenya, Build Kenya’ slogan...........22

FEATURE • Why Kenyans should cheer the bakers on and vouch for their cake............................................................................24 • Gifted hands...................................................................26 • BIG in retail....................................................................28 • Can M-Pesa’s runaway success be replicated across Africa?..............................................................................30

FARMING •Farmers turn to hydroponics to beat drought...................34 • Going bananas: How tissue culture technology is boosting

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banana production............................. ..............................36

WELCOME MANAGING EDITOR: Amos Wachira WRITER: Jeff Korir MARKETING MANAGER: Wangare Riba BUSINESS EXECUTIVE: Steve Angwenyi SUBSCRIPTION & CIRCULATION: Bill Karani DESIGN AND LAYOUT: Mark Gikonyo ILLUSTRATIONS: Stanislaus Olonde PUBLISHED BY:

“No country is ever successful in the long term... without a really strong and vibrant manufacturing base.”- Alan Mulally Dear reader,

K

enya is one of the fastest growing economies in Sub Saharan Africa, but there’s a problem. It’s manufacturing sector has slowed down in the last decade. The sector provides jobs for thousands of local graduates, and is a catalyst for economic growth.

Industrialization is an important aspect of economic growth. Slowed manufacturing has a ripple effect on our economy. First, the market gets flooded with imported goods, some of which could be manufactured locally.

Secondly, the sector fails to add jobs to the economy, and unemployment rates soar.

With this, the crime rates go up.

With a huge population that’s jobless, we have a ticking time bomb.

What needs to be done? We sought the insights of the local manufacturing lobby, Kenya Association of Manufacturers to get a perspective.

P.O BOX 12542-00400 NAIROBI CELL: +254 720 806488

Read on to understand what ails our manufacturing sector, as well as the opportunities there.

EMAIL: info@hustlemag.co.ke

Another issue that arises is local consumption. Even as local companies overcome steep challenges to set up manufacturing units, the buy Kenya build Kenya slogan is barely in action.

HUSTLE E.A IS PUBLISHED

Most manufacturers decry the proliferation of imports that’s steadily killing the sector. So, what needs to be done? Should the government lead by example and carry out the policy that requires it to buy 40% of goods locally? We have the answers.

MONTHLY. Views expressed in this publication are those of the authors and do not necessarily reflect the position of the publisher. ©2019 Elite Craft Ltd. All rights reserved. Material may be reproduced only by prior arrangement and with due acknowledgement to HUSTLE EAST AFRICA MAGAZINE.

In this issue, we also talked to a passionate biker who’s manufacturing motorcycles in Kenya. Kibo Bikes seeks to be a household name in the region. It’s leading by example, showing that local manufacturing is still viable. His company is creating the much-needed jobs and playing its part in reviving our manufacturing sector.

Also in this issue, we talk to one of Kenya’s foremost businesswomen. Ms Esther Muchemi has grown an organic brand from a single shop to a business conglomerate straddling the IT, hospitality, micro credit, telecommunications and real estate industries. How did she do it in a short two decades? She recently launched her book, Give Me My Mountain, to document her inspiring entrepreneurship journey.

Read on to get her invaluable tips, lessons and nuggets of wisdom.

Happy reading! editor@hustlemag.co.ke FB: hustle magazine Twitter: @hustlemag1 www.hustlemag.co.ke

QUOTES

7 8

“We are hardly getting stocks from farmers even with increased price of Sh2,700 for a 90 kilo bag,”

“These practical guidelines for succeeding as a trader or an industrialist are all based on my personal experiences in the world of commerce and industry, not drawn from any management textbook.”

- Rajan Shah, CEO, Capwell Limited, makers of Soko Unga.

-Narendra Raval, founder, Devki Steel Mill, on his book, Guru.

“I am very excited to be leading General Electric’s regional growth in East Africa and look forward to working with our business leaders, team of dedicated and talented colleagues, as well as our trade partners, to ensure GE’s continued growth and success in the market.”

“It is common practice within the ICT industry to conduct exploratory conversations; to assess the market for areas of synergy, co-operation, and partnership, with the intent of giving customers greater value and superior experience.”

-Brenda Mbathi, CEO, GE East Africa.

- Telkom CEO Mugo Kibati.

HUSTLE EAST AFRICA

hustle briefs GUINNESS TO REWARD KENYANS WITH TRIP TO EGYPT

Guinness Shopper Manager, Kennedy Mutula (L), Kenya Breweries Limited Sales Director, Mr. Andrew Kilonzo (M) with Guinness Brand Ambassador Carol Radull (R) pose with a dummy ticket and promotion product during the ‘Win a Trip to Egypt’ national consumer promotion launch.

G

uinness, the country’s leading stout by Kenya Breweries Limited (KBL), has launched a new consumer promotion that celebrates fans made of more. The promotion dubbed “Be a Fan Made of More: Win a Trip to Cairo with Two Friends” will reward four lucky Kenyans with an extraordinary experience; a chance to win a trip of a lifetime to Cairo, Egypt with two of their friends”.

In addition to this exciting trip, the four grand prize winners will also be rewarded with a cash prize of Kshs. 1 Million each.

The promotion, which runs for 12 weeks from 10th April 2019 to 30th June 2019 will reward over 87,000 Kenyan consumers with over Kshs. 40 million worth of cash and prizes during the period of the campaign.

There will be daily and weekly rewards for hundreds of consumers and nine additional consumers will win Kshs. 500,000 each during the weekly draws.

Consumers can take part in the promotion by purchasing a 500ML bottle of Guinness and sending the code under the crown to 29759. They can also participate by purchasing Guinness six-pack cans and scratching the panel to reveal a code which they will send to 29759.

Guinness is the proud media broadcast sponsor of the English Premier League and during the promotional period, encourages consumers to be on the look-out for Guinness ‘referees’ in various outlets across the country as part of the in-bar experience. Once spotted, a consumer will be tasked with choosing either Fan, Superfan or Match Engagement for a chance to win.

The Super Fan Card will enter you into the in-bar draw to win cash prizes (1,000, 2,000, 5,000 or 10,000 KSH). The Fan Card will win you instant merchandize. And the Match Engagement card gives recipients the opportunity to predict winning teams in order to win exclusive Guinness mer-

chandise.

Speaking at the launch, Kenya Breweries Limited Sales Director, Mr. Andrew Kilonzo said, “The Guinness brand resonates with Kenyan consumers due to the numerous extraordinary experiences we have rewarded them with. Previously, we have taken winners to watch English Premier League matches live in the United Kingdom and now we will be taking them to one of the most iconic and scenic places in the world, Cairo in Egypt.”

In line with the spirit of offering extraordinary experiences to Kenyan consumers, Guinness has consistently rewarded fans with unique football experiences with the most recent events being visits by legendary English Premier League football players Thierry Henry and Rio Ferdinand.

The Guinness Fanzone Experiences have also cemented brand love in the hearts of Kenyan consumers.

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Hustle briefs

PROMOTION

COKE STUDIO AFRICA 2019 TO FLY KENYANS TO A MUSIC FESTIVAL IN SANTORINI, GREECE

(From L-R) From left: Coca Cola Experiential Manager, Sarah Wanasakami, Coca Cola Digital Manager, Mukami Macharia, Coca Cola Central, East and West Africa- Marketing Assets Manager, Andrew Alovi (centre), Almasi Bottlers, Trade Marketing Manager, Carolyne Orao and Shem Oluchiri.

T

he Coca-Cola System in Kenya, has launched a National Consumer Promotion dubbed “Dunda Majuu na Coke Studio” to reward loyal consumers with a trip to Santorini, Greece for a music festival.

Over 6.8 million consumers stand a chance to win mobile phones, home theatres and exclusive Coke Studio merchandise over the 12-week promotion period.

In addition, eight lucky consumers stand a chance to win a three day trip to the ‘Supa Dupa Fly’ music festival in Santorini, Greece. Supa Dupa Fly is a one of a kind annual summer music festival at the Greek Island. Due to its beautiful location and wonderful music from international Deejays, playing primarily 1990s & 2000’s Hiphop, RnB and Garage lover’s diary. The event attracts a lot of revelers and tourists alike and creating a perfect place to create lots of memories.

The line-up for the festival will feature some of the best in demand international deejays who have played at a number of A-list celebrity parties and lucrative events

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globally. It will also include sailing tours, watching sunsets, sunny beaches, restaurants and wine tasting, hiring a quad bike for the tour around the island among other incredible activities.

Speaking at the launch, Coca-Cola Head of Portfolio and East Markets, Nelly Wainaina, said, “We strive to consistently reach our consumers through their key passion points which in this case was through the Coke Studio Africa 2019 Show. This initiative is to award them not just for enjoying the music from the show but their continued loyalty to the portfolio.”

“Music is an art form that unites people of different cultures and backgrounds, through our promotion, our consumers will get to delight in incredible music on the trip,” she added.

To be part of the Santorini-Greece squad, consumers will be required to purchase a 300ml Coca-Cola, Fanta, Sprite, Krest or Stoney in a glass bottle with a yellow crown and check under the crown for a code or redeemable prize. For the code, they will be required to send it to 40111 while product will be redeemed

instantly at the point of purchase.

Grand prize winners, home theatres and mobile phones winners will be contacted through a dedicated customer care number 0791087785 to be advised on their winnings and the selected Official Coca-Cola distributors to pick them from.

In case of queries or concerns on the promotion, consumers are requested to call the customer care number on 0709183111. Unique Coke Studio Africa 2019 merchandize winners will be picked from Official Coca-Cola distributors.

To participate, consumers must be eighteen years and above as well as be registered users of Safaricom, Airtel & Telkom at a cost of 2 shillings per short message service (SMS) Over the years, The Coca-Cola Company has been rewarding customers through consumer promotions such as ‘Funga Mamilli na Coca-Cola’ and ‘Changamkia Mamilli na Coca-Cola.’ During Coke Studio Africa 2017, ‘Watch and Win’ promotion was enrolled, entitling participants to win data and SMS bundles among other prizes.

ECONOMIC DEVELOPMENT

UN-Habitat Director of the Regional Office for Africa, Mr. Naison Mutizwa-Mangiza and the Coordinatorof the Urban Economy and Finance Branch, Mr. Marco Kamiya, present the charter to Mr. Kiraitu Murungi, the Governor of Meru County.

Kenya’s Meru County to benefit from UN-Habitat’s finance and economic development The initial focus of this grant will be the implementation of Meru County’s “My Town, my Business” initiative

U

N-Habitat has committed to supporting the County Government of Meru in Kenya with a grant for collaboration on Municipal Finance, financed by the Swedish Development Agency SIDA. The initial focus of this grant will be the implementation of Meru County’s “My Town, my Business” initiative, an innovative endeavor to promote proactive and responsible citizenship for improved revenue collection and service delivery.

At a meeting held at the U-Habitat headquarters in Gigiri, the Governor of Meru County, Kiraitu Murungi pointed out that increasing the own source revenue of the County will require the government to more directly showcase how taxes are being used for improved service delivery and for citizens to take ownership of their surroundings and fulfil their collective responsibilities.

This initiative comes at a crucial time, when Meru is under pressure to increase its own source revenue. The cost of Meru’s devolved functions was estimated to be 12th largest in the country, and yet it receives one of the lowest per capita contributions from the Central Government. While own-source revenue can help fill this gap, the County Government has struggled to reach its own revenue targets and only collected USD 5.53 million of the targeted USD 7.73 million in the financial year 2016/2017. With a yearly pro capita tax revenue of USD 4.07 million (2016/2017), the County Government is eager to collaborate with UN-Habitat and benefit from its global expertise to increase the resources it has available to invest in the development of the County.

The project foresees UN-Habitat providing a team of Municipal Finance experts to analyze the tax design and tax collection

processes of the county and come up with comprehensive and actionable recommendations for quick improvements in revenue. The insights which emerge from this collaboration will then be used to inform the “My Town, my Business” initiative and transform it into a flagship programme for replication in other parts of Kenya.

This initiative will be implemented by the Urban Economy and Finance Branch at UN-Habitat, which works globally on Municipal Finance, Local Economic Development and Youth and is currently launching several similar projects in other Kenyan counties.

Governor Murungi led the Meru delegation which also included Mr Jeremiah Lenya M’Iringo, the County Executive Committee Member (CECM) for Lands, Physical Planning, Urban Development and Public Works and Mr. David Kinoti Arithi, the Municipal Director of Planning.

UN-Habitat was represented by the Director of the Regional Office for Africa, Mr. Naison Mutizwa-Mangiza and the Coordinator of the Urban Economy and Finance Branch, Mr. Marco Kamiya.

HUSTLE EAST AFRICA

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opinion

By Prof. Bitange Ndemo

population has no access to electricity, and those that do face daily power cuts that can last for hours on end

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ENERGY

Can Africa’s energy crisis be resolved?

V

isiting any African country, there are stories you cannot miss in the headlines - energy, graft, and humanitarian crisis. If you dig deeper into these stories, there are conferences being held, all of them seeking solutions to crises facing Africa.

The problem though is that there is never an end to any of these crises. It is palaver at its best as economies continue to hurt.

In today’s column, I will focus on the energy crises. In South Africa, an electricity crisis remains a major threat to the country’s economic outlook over the coming years. It is estimated that energy disruptions cut the country’s economic growth by as much as one percent every year.

Unlike other African countries, when power goes off in South Africa, telecommunications companies cease to function since they built their infrastructure on the assumption that power

would be available 24/7. When the African National Congress (ANC) met for its bi-annual lekgotla early this month, the energy crises were top on the agenda but sceptical media characterised the ensuing melodrama with headlines like: “Power to the people”, “ANC seeks enlightenment” and “ANC seeks power.”

ANC secretary-general Gwede Mantashe, while addressing the function, did not even recognise that politicians had the responsibility to ensure adequate energy to grow the economy. Instead he told the gathering that “directors in government would have to address the growing energy crises.”

He promised to check if ministers and departments understood their priorities and whether they had been funded.

In Nigeria, Africa’s largest oil and gas producer, the British Broadcasting Corporation (BBC) noted in its March 25 coverage BBC Africa Eye: On the front

line of Nigeria’s energy crisis, that half of the country’s “population has no access to electricity, and those that do face daily power cuts that can last for hours on end.”

Yet, President Buhari and APC’s nine point pledge in 2014 promised to “vigorously pursue the expansion of electricity generation and distribution of up to 40,000 megawatt (MW) in four to eight years.

Total installed capacity of the power plants in 2015 was 7,445 MW. Effective average generation was less than 3,900 MW. In 2017 the country’s generation capacity rose to 8,300MW but its peak production stands at 5,222MW which happened on the 18th of December, 2017.

Still Nigeria has a long way to go to reach the 40,000 MW target.

In Kenya the story is similar as the Kenyatta Government promised 5,000 MW before the dream was abandoned in favour of expensive subsistence production of energy by independent power producers.

Peak demand As a result, Kenya’s generation capacity is 2,651 MW with a peak demand of 1,802 MW, as at June 2018. Pundits who support subsistence generation of energy argue that there isn’t sufficient demand to warrant increased production but this is all a calculated move. What they don’t mention is latent demand and the fact that more

than 40 percent of the population is in the dark.

The energy companies in Kenya, although quoted in the Nairobi Securities Exchange, are technically insolvent, going by pieces of information that get leaked to media. The extent of damage is colossal as manufacturers complain about accessibility and affordability of energy that is key to economic growth.

In spite of the inefficiencies surrounding the energy industry in Africa, investor interest remains high. It does not require any genius to raise funds and for once resolve the continent’s greatest hindrance to economic growth.

Our failure to manage local resources

to become lucrative investment is what is luring Kenyan investors into the hands of conmen in the cryptocurrency space. By now, it should be very clear that minimalist approach to infrastructure development is not working.

There isn’t a good economic model to predict consumption of any product. The approach to building enabling infrastructural projects should never be left to private sector whose motive is profit. Virtually all such projects that that the country gambled on have paid off. From Thika Highway to undersea cables, we have had good lessons that could be invoked to deal with energy more effectively and move away from analysis by paralysis.

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Buy kenya a build keny

MANUFACTURING

Huib Van de Gridjespaarde CEO Kibo Africa, Antony Kiloo of G4S, and Jeff Koinange at the launch of the Kibo K250 at the Nairobi National Museum.

Passionate biker behind Kenya’s first locally made motorcycle Kibo Motorcycles recently introduced their second series of ‘made in Kenya’ motorcycles; the Kibo 250

By Amoxers Wachira

F

or the last decade, the motorcycle industry in Kenya has grown exponentially. The numbers are telling; over 300, 000 motorcycles are imported every year according to various estimates.

Out of these, a huge percentage comes from India and China, with a small number of motorbikes coming from Japan, Europe and America.

According to Huib Van de Gridjespaarde, the founder and MD of Kibo

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Motorcycles, most motorbike imports appeal to the mass market because they are cheap and affordable. However, he says they have an ugly downside; most fare poorly when it comes to safety and reliability. His view is not farfetched. A walk into any county hospital reveals the extent of this problem. There are dedicated wards for motorcycle accident victims.

If a World Health Report is anything to go by, motorcycle related deaths rose fivefold after the government of Kenya removed VAT from motorcycle imports.

Huib wants to change all this by

introducing quality motorcycles into the industry. Through his company, Kibo Motorcycles, he designs and builds motorcycles that are suited for Africa. He says that quality, reliability and visual appeal are central to his company’s vision. Kibo Motorcycles pitched tent in Kenya in 2011.

Although he says the bodaboda industry is huge and thirsts for quality bikes, his company is initially targeting government institutions, county governments, conservation companies, delivery firms and individual motor cycle enthusiasts among others.

Kibo’s flagship motorcycle, the K150 was a product of a survey that he conducted in 2011 when he came to Kenya.

A passionate biker and a Development Economics graduate, his survey revealed

some interesting facts about the West and East African regions.

“The west African countries had a well developed motorcycle industry compared to East African economies. In Kenya, the tide was turning. The government had removed value added tax on motorcycle imports, paving the way for the growth of this industry,” he said.

“Furthermore, most riders in Kenya were using a bicycle. Here was a chance for them to upgrade to a motorcycle.”

Huib found out that there was a huge market for cheap imported motorcycles especially in the burgeoning bodaboda industry in Kenya. However, he noted a huge gap; there was demand for high quality motorcycles that were reliable, and suited for Africa’s rough terrain. His answer was the Kibo 150 motorcycle, a hybrid of a street and an offroad motorcycle.

It was suited for both street and offroad terrains, and was designed with rider safety in mind. It has a high ground clearance and heavy duty suspension that allows a rider to haul lots of cargo.

His bikes are designed in the Netherlands and assembled in Kenya, for Africa.

His firm’s vision is to unlock economic opportunities by providing safe and affordable mobility solutions, and Kenya was his launching pad.

Asked why he settled on Kenya to launch his manufacturing plant, Huib says that Kenyans, like the Dutch, are enterprenuerial.

He also adds that Kenya was at that time a ripe market for motorcycles, and the government move to remove taxes on motorvycles triggered the unprecedent growth of the industry.

“Kenya’s geograpgic location was ideal for us. The approximation to Asia, our supply base easily led us to settle here,”says Huib, who added that he’s a self taught motorcycle mechanic.

Kibo Motorcycles is the first ever company to manufacture motorcycles in Kenya.

Huib explains how they do it.

“Kenya isn’t a small market to us.

Although we’re serving a small segment we are doing something unique in that we assemble the bikes here,” he said.

Most motorcycle imports arrive in Kenya in CKD(completely Knocked Down) kits mostly consisting of 60 components.

The importers then assemble the parts to make the finished product. Kibo’s model is technically different. Mr. Huib says that the company works closely with suppliers from Europe and Japan, who provide components. Unlike in CKD assembly where

you only need to assemble a few parts together, Kibo engineers assemble the bikes from the ground up, bolting together over 400 components.

“If it’s a wheel, we start from scratch.

We have to get all the components, including spokes,hubs, tyres and rims ready before fitting them together.”

But local manufacturing is not for the faint hearted. First, he says it’s hard to get quality materials at the right price,and this is the single reason that makes importation of finished products a more viable option.

The second challenge is the market. in Kenya, the ‘Buy Kenya Build Kenya’ slogan is yet to bear fruits. Huib says that the government, being the largest consumer, should have a policy of buying locally.

When this is done, he says, most people will emulate the government and buy local goods, a shift that could reinvigorate the local manufacturing sector.

Hub also believes that local manufacturers are not adequately incentivized even after creating thousands of jobs. He believes that there should be some incentives that specifically target local manufacturers who create the most jobs.

“As it stands, taxation is done in a blanket way. CKD assemblers and local manufacturers have to part with 10 percent duty. It’s a welcome relief from the previous 25% but we feel it isn’t enough.”

Given that the local manufacturing sector is tiny by global standards, Huib says that there’s a skills gap in the country, something that hampers local production.

“There are some very talented engineers in Kenya. We hire them and train them further in Amsterdam for three months after which they become fully fledged engineers. We promote skills and technology transfer, allowing our Europe based engineers to visit Kenya to impart skills and knowledge to local graduates “ In the Manufacturing industry, availability of labor is an important aspect.

For Kibo, Kenya has a talent pool of eager university graduates.

“A talent pool is very important for any manufacturer that needs to scale.”

Despite the challenges, he says that his company believed that local manufacture of motorcycles was possible.

“We have a working partnesrhip with our suppliers that allows us to move the entire manufacturing of components to Kenya once we hit certain volumes, of course with their help.”

Mr Huib is also bullish on the Kenyan market, saying that the industry is growing and more investors are setting up

manufacturing equipment.

Furthermore, he singled out the government’s big 4 agenda on manufacturing, noting that if such an initiative is a success, local manufacturing will be a key economic contributor to Kenya’s economy. It could also create thousands of jobs.

His firm employs 70 people and plans to grow its staff complement to 400 in the next five years.

Since the launch of the first motorcycle, Hub says that the company has made major strides in the local industry. It sold its first bike to the office of the president and continues to get orders for the K150 and K250 motorcycles from various county governments , NGOs, and individuals.

He says that their strategy is to sell thousands of motorcycles as the company grows steadily. With a production capacity of 5000 motorcycles per month, Kibo could easily become a household name in the manufacturing industry. For now, the company is focused on the high end market segment, and this explains its low production numbers.

The company recently launched the K250, a rugged, more powerful motorcycle that’s loaded with extras like a radiator for cooling the engine, and heavy duty suspension for offroad rides. The bodaboda industry takes up over 90% of all imported bikes and is a lucrative market for any motorcycle importer or manufacturer. Kibo motorcycles plans to introduce a smaller motor bike that will retail at below kshs200, 000. It will be targeting SMEs. Currently, Huib says, Kibo is content with the small niche that it’s playing in.

He added that the compamy will focus on creating quality bikes that are visually appealing and reliable, without worrying about the competition.

“No one needs to buy something that lasts forever but is ugly. For us, the bikes have to look good,” he added.

Local market The only way to grow Kenya’s manufacturing secure, says Hub, when there’s consumption of locally manufactures goods.

For a start, he says that Kenya is making great strides with its ‘buy Kenya build Kenya slogan,’ although a lot more needs to be done to popularize the initiative.

In the meantime, his firm is keen on expanding to other African markets. It has already set its sights on South Sudan, Uganda and Tanzania.

HUSTLE EAST AFRICA

15

Experience More.

Kibo K250 HUSTLE EAST AFRICA

www.kibo.bike

The Bike’s Specifications Engine Type

Air cooled 4-stroke, SOHC

Bore and Stroke

65.5 mm x 66.2 mm

Compression Ratio

9:2:1

Maximum Power output

17HP/6500 rpm

Maximum torque

20 Nm/5200 rpm

Engine displacement

250cc

Chassis

Hybrid backbone cradle frame, 25 degrees caster angle, 97 mm trail

Ignition

CDI

Starter

Electric Starter and kick starter

Transmission

5-speed constant mesh

Dimensions

2200 mm x 810 mm x 1200 mm (l/w/h)

Wheel Base

1450 mm

Seat Height

800 mm

Ground Clearance

200 mm

Fuel Capacity

10.4 litres (average fuel consumption 29 km/ltr)

Front Tyres

90/90 -21 inch, tube type

Rear Tyres

5.10-18 inch tube-type

Front Suspension

Telescopic front, linear coil spring / oil damper, 215mm travel

Rear Suspension

Twin coil-overs shocks, progressive coil spring / oil damper, 140mm travel

Front Breaks

Single disc, opposite dual piston, fixed caliper

Rear Brakes

Single disc, dual piston brake, floating caliper

Loading Capacity

250 kg max carrying load

STRONG

COMFORTABLE

The trellis frame is significantly stronger, yet lighter than traditional frames. The K150 is designed to carry and secure heavy cargo loads up to 250kg.

The 160mm front suspension enables a smooth ride. The 21-inch diameter front wheel size is better for rolling over obstacles.

EFFICIENT

SAFE

150cc air-cooled, single-cylinder engine, that is the perfect mix of power and efficiency. It features a balance shaft that significantly diminishes engine vibration, resulting in a smoother ride.

The front disc brake provides strong, reliable stopping power. The upright seating position offers more comfort and control for those long days on the bike.

For more information contact us on:

0798 404 122 | sales@kibo.co.ke www.kibo.bike

HUSTLE EAST AFRICA

MAIN STORY

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ENTREPRENEURSHIP

Esther Muchemi’s Midas Touch From a single shop, she has built a business conglomerate with interests in microfinance, real estate and hospitality

By Amos Wachira

F

or 18 years, Esther Muchemi has navigated the male dominated telecommunications industry with a confident gait. Starting off with a single shop, she has beaten odds to rise to the helm of Samchi Group of companies, a business that makes millions in annual turnover. The group of companies consists Samchi Telecom, Samchi Credit, After40 Hotel and a real estate firm. Despite her success in the world of business, Ms Muchemi has a simple disposition and an unsophisticated demeanor.

When we met her at the After 40 hotel, she welcomed us with a ready smile, her amiable personality filling the room. But behind the smile is a visionary, ambitious and resilient business woman who has used determination, clarity of purpose and conviction as her building blocks on business. Her journey began in 1996 when she quit her well-paying auditing job at Ernst & Young Global for a stab in entrepreneurship. She founded Esther Muchemi and company auditors, a small audit firm based in Nairobi. Soon after, her audit firm would blossom. Five years later, she made a plunge into the telecommunications industry. With little capital, she opened a shop in Nairobi’s Koinange street, where she sold airtime and SIM cards for Safaricom and Kencell (later to be known as Airtel).

“My former colleagues could joke that I quit a corporate job to become a dukawalla,” she recalls.

She remained resolute and set out to build her company. With a capital of Shs50,000, she delivered her first order to Safaricom. Months later, she was exclusively serving Safaricom and that’s how she became one of their top airtime and lines dealer. As a fledgling company, raising capital was a challenge in the formative years. However, with her business acumen, she could get businesses to trust her and to extend credit lines, and that’s how she overcome this hurdle. But it wasn’t a smooth sail for the Othaya born businesswoman.

“Initially, we were getting a huge margin after selling Safaricom lines. Within no time, other businesses joined in and started undercutting us on price. Our margins fell sharply. Our competitors almost kicked us out of the business,” she says.

Despite the challenges, she had a noble way of growing the firm organically. Her first move was to employ 30 sales representatives who sold the lines inside the shop. It paid off handsomely.

Within years, she was making shock waves into the telecommunications industry, earning her place as Safaricom’s top dealer and top airtime seller.

In 2009, she was crowned the best dealer im dis-

tribution resources by Safaricom. In 2010, she was the best M-Pesa dealer, a fete she repeated im 2011 “I aligned my business with Safaricom’s strategy.

I had made a bet on them early on, and I believed the company could become the next big thing “ Ms Muchemi has a knack for spotting opportunities. When Safaricom launched M-Pesa in 2007, she Didn’t miss the opportunity. She was their pioneer dealer, holding the first till number, 0001.

Fortunately, the company used her firm to pilot the new service. “It was an integrity test. I was happy it turned out to be a success,” she said.

Since then, she has grown her business into a network of Safaricom dealerships.

In recent years, she has also diversified into other industries, including real estate, hospitality and micro credit. The After40 hotel in Nairobi’s CBD is one of her star accomplishes. Her group of companies employs hundreds of people.

In her own right, Ms Muchemi is a seasoned entrepreneur who has won accolades from far and wide. In 2014, she was named a finalist in the EY’ Entrepreneur of the Year Award.

So, how did she do all this?

“I had to create a good idea that could solve a problem. I also had a strong conviction. Every time I felt like giving up, I could go back to my conviction.” She also shares that she had to put structures in place to allow the business to thrive. Unlike the formative years when she was the only one running the show, she has put in place structures that allow the business to run even when she’s not around.

When she talks about entrepreneurship, it’s not hard to see that she’s passionate about empowering others to pursue and reach their potential. It’s not surprising that she’s involved in many fora for empowering the youth.

Last year, she launched her book,Give Me My Mountain, that is a treasure trove of lessons and tips on how to start and grow a business.

“I invest in youth empowerment because I believe they are the leaders of tomorrow. They need mentorship to believe that whatever they chose to do can be a success.”

Looking at how she’s managed to turn a small shop into a business empire, one can easily say she has the proverbial Midas Touch. “You have to be inspired and determined to become successful in any endeavor. You also need to quit your comfort zones and to grab opportunities. In the face of challenges, you need to be irrepressible and resilient,” she advises. Having accomplished a number of milestones in the world of business, she says she’s not yet done. “I’m always on the look out for the next mountain to conquer,” she says.

At a glance: • She’s a mother of two.

• She holds a Bachelor of Commerce degree from the University of Nairobi.

• She’s deeply religious. She reads the Bible every day.

• She loves a good cup of tea • She advocates for healthy eating and fitness • At times, she does Zumba and Yoga • To unwind, she creates time to be with her family

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Q&A

“I thirst for greatness beyond what I can perceive”- Esther Muchemi Hustle East Africa interviews Esther Muchemi, the Chief Executive Officer of Samchi Group of Companies.

She shares her thoughts on entrepreneurship, wealth creation, youth mentorship and her recently released book, “Give Me My Mountain.” Excerpts

By Hustle East Africa Team What’s the secret behind Samchi Telecom’s tremendous growth?

Was capital an impediment?

I started with a single shop. With dedication, honesty, hardwork and conviction, I have grown from that single shop to over 60. Besides, the company has now diversified into hospitality, micro credit and real estate. I had a conviction of where I needed to be, and worked hard towards that. My secret is to start small before scaling. Above all, I attribute my success in business to God.

I don’t believe that capital is a major limitation for anyone who’s starting a business. Our first order from Safaricom was worth Kshs50, 000. We started small and grew from there. It was difficult at first as more orders came. For seven years, we couldn’t afford a holiday.

My greatest advantage was the value of integrity. I found that people were willing to trust me, and that’s how I managed to steer the business forward. The secret is to grow organically, like we have done over the years.

What gives your firm the leading edge?

In your view, what is holding back the youth?

Over the years, I’ve inculcated some values into the business. One of these is honesty. We’ve been able to portray ourselves as a business that can be trusted.

We also invest in solutions that solve people’s problems.

Most of the youthful population believes in a quick way of making money.

Unfortunately, there are no quick fixes in business. There are no shortcuts to wealth creation. You have to come up with a great idea and have a vision and the passion to actualize it. It’s a long journey that you have to take to be successful.

You take part in many youth and women empowerment gatherings. Why are you passionate about empowering the youth and women?

For a long time, I have obsessed about youth empowerment because I believe the youth are the leaders of tomorrow.

I also believe in quality mentorship and that’s why I wrote the book, Give Me My Mountain, to share my story with others and to show that it’s doable.

It is a handbook for any entrepreneur out there.

Any challenges along the way?

First, I was joining an industry that I wasn’t familiar with. It was a new area for me and for the country. It was a deep learning curve.

The industry is also dominated by men. When we started Samchi Telecom, monied businessmen almost elbowed us out of the business. They had the financial muscle to buy in bulk and sell at low margins. We had to be creative to compete well.

The industry is also full of risks and fraud is one of these.

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Are there mentors out there that the youth can look up to for inspiration?

I would say there are many quality mentors in Kenya and beyond. However, I don’t think they have done their part.

As mentors, we need to start showing the youth the importance of starting small. We need to erase from their minds the idea that you can start today and get your wealth in a fortnight.

Successful leaders should aspire to give themselves to people, to impart their experiences and skills to the next generation. It’s a way of making society a better place.

What inspired you to write your book?

Throughout my journey, I have made some good and bad choices. My book summarizes all these steps. These can be used by anyone in their own journey. I had to write it to demonstrate that building a successful business takes a lot more than having the capital to start. The book shows that some values like integrity, honesty, and hard work are necessary building blocks for any successful business.

What keeps you awake at night?

I attempt to sleep well. However, if there’s a persistent problem, I have to make a decision. Something has to change. I have come to realize that your business is as healthy as you are.

However, most entreprenuers forget the things that make them healthy.

Briefly highlight the firm’s roadmap We want to inspire greatness in what we do and who we relate with. In my book,I look at my goals as mountains that I have to conquer. I’m always on the look out for the next big thing, or the next mountain. I don’t allow myself to be limited by what I can see. Greatness is what drives me. I thirst for greatness beyond what I can perceive.

BOOK REVIEW

Give Me My Mountain Author: Esther Muchemi Pages: 159 Price: Ksh1,450 There’s no denying; Esther Muchemi is one of the most successful women entrepreneurs in Kenya. She is a seasoned business magnate who has created an empire through sheer resilience and hard work.

Her inspiring book, Give Me My Mountain, takes us through her winding journey into entrepreneurship.

She plunged into the uncertain world of business two decades ago when she quit her well-paying auditing job to start her own practice.

Esther Muchemi & Co grew in leaps in bounds. As she revealed, the business was doing so well that she was able to buy a Mercedes-Benz car within five years.

One of the hallmarks of entrepreneurs is that they never quit even after achieving tremendous success. Instead, they look for bigger challenges. Esther never settled for less. She thirsted for more. In 2000, she ventured into the telecommunications industry when she founded Samchi Telecom.

Alluded from the Bible, the title of the book is symbolic. It’s derived from the story of a man called Caleb, one of the only two Israelites to set foot into the promised land of Canaan. Caleb, an 85-year-old man requested God for his mountain, knowing very well that the mountain was infested with giants.

Despite his advancing age, he had the conviction and the will power to fight the giants and to reach his destiny.In her journey, she talks of challenges as mountains, saying that once she conquers one mountain, she sets her sights on the next one.

“I got the title from the Bible. Caleb is a man I have come to admire. He had the courage to ask for his inheritance even at his old age. The youth should have the courage and the boldness to ask. The worst answer they can get is a “No”.

The book tells us how a combination of vision, focus and resilience played out to

gift her a successful business.

What started as a single shop selling airtime has morphed into a business empire, consisting 60 shops and grossing millions of shillings in turnover.

The book is captivating as it tells the story of the odds that were stacked against Ms Muchemi, and how she overcame each challenge.

It also shows her knack for spotting new opportunities. For instance, when mobile money was introduced in Kenya, she saw an opportunity and jumped into it. As the holder of till number 0001 for M-Pesa, she was the first person to transact with it. Importantly, her company was used to pilot the new service.

Divided into 18 chapters, the 159 paged book provides readers with a fresh insight into leadership and entrepreneurship.

Most importantly, it distills key values and traits that are useful in business.

Ms Muchemi’s draws true story lessons from her journey to the top. The book is a handbook for any entrepreneur wishing to start and grow a business.

“I wanted to document my story and to share it with the world to inspire others.

Through the book, I feel like I’ve shared a part of my life with the world,” said Ms Muchemi. The book, whose foreword was penned by Safaricom’s CEO Bob Collymore, retails at Sh1,450.

Where to buy: Any Samchi shop, Comrades Bookshop near Quickmart, Kiambu Road, and online through www.africanbookhub.co.me/givememymountain

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MAIN FEATURE How to revive the ‘Buy Kenya, Build Kenya’ slogan The manufacturing industry plays a pivotal role in Kenya’s economic development. However, the industry has stagnated for decades, and the ‘Buy Kenya, Build Kenya’ slogan is barely in action.

Hustle East Africa magazine talks to Phylis Wakiaga, the CEO of manufacturers lobby, Kenya Association of Manufacturers to shed light on the challenges, opportunities and outlook of this sector. Excerpts

By Hustle East Africa Magazine team Hustle: What’s the mandate of KAM as a local manufacturers lobby?

KAM: As the voice of the manufacturing sector, we use a fact-based policy advocacy to champion for the industrial transformation of our country to create a sustainable economy for future generations.

KAM strives to create an enabling business environment to steer competitive manufacturing. Such an environment has trickle effects to the economy in the form of job creation and prosperity in the long-term.

KAM develops a Manufacturing Priority Agenda that highlights the most burdensome challenges that face our local industries. We look at how these challenges can be solved to make Kenya more competitive.

We develop the agenda from engagements with our members as well as observations and other regulations to review the business environment.

We have collated the agenda into five pillars that can be strengthened to create a more competitive environment for the industry.

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MANUFACTURING

One of our top agenda is the need for a regulatory policy framework that addresses the concerns of the manufacturing sector. We would like to see the national and county governments addressing the issues raised so far with regards to national policies, county revenue laws, levies and charges.

The other four pillars include a competitive manufacturing sector, a level playing ground for manufacturers, making Kenya a manufacturing hub for exports and securing the future of the industry.

Hustle: Is the government playing any role to promote local industries?

KAM: The government has demonstrated high level commitment to revitalize the manufacturing sector. It introduced the industrialization program dubbed KITP that’s focused on increasing the revenue from the manufacturing sector to over 15% of the GDP, create a million jobs, increase FDI by a factor of five and improve Kenya’s ranking in the ease of doing business to top 50 by 2020.

The expansion and improvement of infrastructure include projects such as the Standard Gauge Railway, and the generation of an extra 5000MW of electricity to cut the cost of electricity.

In the coastal region, the Lamu port, South Sudan Transport Corridor Programme is on course and is creating lucrative incentives for local and foreign investors.

Hustle: How has KAM intervened for local manufacturers?

KAM: Over the years, KAM has made gains in its advocacy work.

From the reduction of number of licenses required to start a business, to the introduction of the Single Business Permit, our work in expanding markets is clear through EPAs and extensions of facilities like AGOA which lead to massive job creation.

We have also played a key role in the fight against counterfeits and other forms of illicit trade.

Hustle: Why does the ‘Buy Kenya, Build Kenya’ slogan seem like it’s fading? Aren’t consumers supportive?

KAM: At times, consumers prefer imported products and this erodes the market share of local manufacturers.

The ‘Buy Kenya, Build Kenya’ policy is

yet to be fully actualized. The government’s policy to have 40% of all of its procurement sourced locally is yet to kick off. Consumers tend to think that imported goods are superior to locally manufactured ones. They need to change their mindset.

Hustle: Does this mirror the negative growth of the local industries?

KAM: Indeed, the manufacturing sector has been on a downward trend for the last few years. Our economic growth has slowed down in three out of five past election years with the exception of 2013.

Our value addition is fairly low, meaning that the industry has lots of opportunities for growth.

The sector is stagnant because we have open markets and goods are moving freely across the globe. We have to be more competitive as a country.

Hustle: Any challenges facing local manufacturers?

Kenya is losing her competitive edge due to high cost of energy, influx of cheap and fake goods.

Local companies also have to deal with increased taxation, multiple levies and other money tariff barriers. In a nutshell, local manufacturers have to deal with an inconsistent regulatory environment that impacts their pricing.

However, we hope the sector will pick up pace and create jobs, increase productivity and improve our country’s GDP. Hustle: What are the trends in the manufacturing sector?

The Banking Act 2016 that capped interest rates is one of the trends. Since this law came into effect, the relationship be-

tween private sector credit and economic growth is not clear.

So far, the interest rate cap has locked out most Small and Medium Enterprises since commercial banks are reluctant to lend to borrowers who are considered to be ‘high risk’.

The interest rate caps weren’t intended to make it difficult for SMEs to get access to finance. However, now that it’s happening, we need an intervention on this matter to allow SMEs and the manufacturing sector to thrive.

Hustle: Any gaps in the manufacturing sector?

KAM: There’s an increase in demand for skilled workers. We launched a TVET (Technical and Vocational Education Training) project in partnership with GIZ in 2017 to fill this gap.

The project aims to improve access to technical and vocational jobs and economic opportunities for the youth.

The project will place over 500 technical and vocational graduates on internships in various industries and create jobs. It will also give refresher training to industry employees based on the identified skills gaps.

Hustle: What’s the outlook of the local manufacturing sector?

We are looking at innovation and more research and development in the sector as we aspire to create unique locally manufactured products with a unique selling point.

We also need to diversity our products to expand external markets.

There’s also a push to make sure that learning institutions produce quality graduates fit for the industry.

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FEATURE

MANUFACTURING

Why Kenyans should cheer the bakers on and vouch for their cake Local manufacturers speak out on why they are hard-pressed in operating their businesses

By Special correspondent

I

t’s heartbreaking to walk into a government office feeling so Kenyan and proudly so, only to be served tea alongside imported serviette.

The ‘Buy Kenya, Build Kenya’ slogan has so often been scorned by such experiences. It’s up to Kenyan consumers and policy makers to this slogan.

While manufacturers and other intermediaries in the supply chain would be happy to take up this clarion call, their rewarding efforts to do so have eventually turned them off. The sad reality on the ground is most Kenyans would not buy locally made products especially when there’s an imported substitute in the market. In downtown Nairobi for instance,

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home to many of Kenya’s burgeoning entrepreneurs, the effects of cheap imports is easily evident.

James Waeni sells shoes in one of the many stalls along Price Road. He thrives in thin margins, the reason he makes occasional travels to China to get his products at a fraction of the local cost.

It does not help that shoes can be easily manufactured locally. In fact, a spot check in Nairobi’s Industrial Area, a local shoemaker has slowed down production due to slow sales as wholesalers and retailers continue with their exodus. For Waeni, he knows very well that going for cheap imports kills local manufacturing, but for now, he says it makes business sense.

“China-made goods are fast-moving compared to locally made products.

They fly off the shelves simply because of cheaper price tags, says the youthful entrepreneur.

He is just one of the many business owners who are moving to China to buy manufactured goods at a cheap price, despite rising concerns about the quality of the products.

With this trend, out goes the Buy Kenya Build Kenya slogan introduced by the government to spur local production.

The Buy Kenya, Build Kenya campaign was kickstarted in June 2015 when Kenyan president Uhuru Kenyatta promised to enforce policies to make sure increased production and consumption of locally manufactured goods and services. For a start, he announced that 40 per cent of

all goods and services procured by the government at all levels should be locally produced.

Almost four years down the line, the campaign has borne no fruits.

“It has become expensive to do business in Kenya because of costly inputs.

Power is expensive compared with our competing countries like Egypt,” explains Dr. X.N Iraki, a University of Nairobi lecturer.

Due to the high cost of doing business in Kenya, he adds, multinational firms have no other option but to shut down their manufacturing units as they look at importing their products from their affiliated firms in other countries, a less costly alternative.

It does not help that Kenya’s bilateral trade with China is tilted in favour of the Chinese dragons.

According to data from the Kenya National Bureau of Statistics, the value of imports from China stood at Kshs306.47 billion in 2016. At the same time, Kenya’s exports to China averaged Kshs5 billion,

revealing a sharp trade deficit.

A case in point is in 2016 when China supplied Kenya with railway construction materials, including steel, worth more than Kshs13 billion.

Meanwhile, local steel manufacturers face tough times as cheap steel from China keeps them out of business, the downside of this being massive layoffs.

Analysts say that Kenya should make re-evaluate its taxation decisions about value added tax, industrial development fee and the railway development fund as they stifle local production, making locally made goods more expensive than imports.

Kenya Association of Manufacturers head of steel sector, Kotni Rao, proposes a dumping duty on cheap imports to avert the trend.

Elsewhere, manufacturing stakeholders are scouring for a solution. A manufacturers lobby for instance, is vouching for the implementation of a policy that will promote local industry.

The Kenya Association of manufactur-

ers launched the Manufacturing Agenda 2017 programme that seeks to increase the sector’s contribution to the economy by 1.6 per cent every year for the next three years.

In the same light, a local e-commerce giant, Jumia Kenya rolled out an online store dedicated to selling locally made products.

But a lot more needs to be done to revive the sector.

Kenya Association of Manufacturers chief executive Phylis Wakiaga says that it is easy to peg the turnaround of the manufacturing sector on government policies, but if the policies are not well implemented, they might fail to bring any tangible results. For a start, local consumers need to embrace locally made goods.

“There is need to sensitize local consumers about the benefits of buying locally made products. Most of these consumers do not see the link between buying local products and job creation.

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FEATURE

INNOVATION

Morris Mbetsa, innovator.

Gifted hands With no electronic engineering background, innovator creates unique vehicle tracking solution

M

orris Mbetsa’s rags to riches story is awe-inspiring. At 18, when most of his peers were preparing to join tertiary institutions, he invented a car tracking system. Dubbed ‘Block and Track’, his innovation mesmerized thousands of people and propelled him to the spotlight.

But beyond the success was a humble boy whose only inspiration was to escape the shackles of poverty that he had lived with all his life.

Mbetsa knew he had an interest in electronics at a tender age. Growing up in Mariakani in Mombasa, he could dismantle and rebuild electronic gadgets as a past time. He grew up in an impoverished household. His grandmother was the sole bread-winner. For her, putting food on the table was a struggle.

With no T.V at home, Mbetsa could join his peers at the nearby video den where they used to pay to watch television. It was in these dens where he realized he had a gift in the field of electronics.

He invented a device that could jam TV

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signals and offered it to one of the owners of the video dens.

“I showed him how he could jam his competitors’ TV frequency to monopolize the business, on condition that he could allow me to watch the TV for free,” recalls Mbetsa.

He says he knew it was a bad business practice but it was a perfect way of testing his device.

After high school, he relocated to Nairobi to live with a cousin in the sprawling Kibera slums.

Before long, he learned of a carjacking incident that involved one of his friends.

In that incidence, his friend had lost a car.

At the time, carjacking incidents were on the rise. Seeing how desperate and helpless his friend was after the ordeal, he set out to find a solution. And this is how he birthed the idea of a car track system.

Block and Trace is an SMS based vehicle security system that allows car owners to monitor their vehicles. It’s practical in that it brings the concept of vehicle security into one’s hands, through the mobile phone.

Once a car owner installs the device under the hood, he’s only required to install a program in a mobile phone. This allows him to lock the vehicles door by sending an SMS. In the event the vehicle is stolen, there’s no need to panic. The owner sends an SMS with a code to stop the vehicle on its tracks. The system works best where there’s a good network coverage. His device is also fitted with a GPS system that locates the vehicle on a map.

While Mbetsa’s innovation is not the first in the vehicle security industry, it stands out for its simplicity. Most other tracking systems need a monthly subscription that could drain the vehicle owners account in the long-term. Mbetsa’s innovation only needs a mobile phone that’s been preloaded with airtime.

The system allows one to control various functions using a mobile phone.

For instance, you can lock the vehicle’s doors, stop it, monitor it or even restrict its movement to a given place.

Mbetsa made his first million when a client made a bulk order for the devices.

He demonstrates that Africa can devel-

op solutions for its problems. Africa has never been in short supply of innovators, but few innovations see the light of day.

Limited funding,for instance, scuttles brilliant ideas and keeps them from being conceptualized into award-winning solutions.

“Africa can compete more at the world stage, but only if we become producers instead of consumers. It could also be good if governments could support local innovators, instead of favoring imported technology,” he said.

His big break came when his innovation caught the eye of the then National Commission for Science and Technology CEO, Prof. Shaukat Abdulrazak. The institution funded his idea. Besides, he got a chance to learn from the industry greats. Later on, he traveled to China where he honed his skills in technology and manufacturing.

On returning home, he felt he was ready to delve into business.

“I learnt a lot from China. That’s where I got most of the values that I instill into my company today.”

Mbetsa Innovations was his flagship company. He refined his concepts and designs to improve on his original idea.

Furthermore, he has come up with 10 more innovations, including Auto Pad, a car recognition software.

Mbetsa’s company has grown into a hub for electronic design, software,

firmware and PCB design and fabrication of devices,such as home automation systems, home security systems, tablets and car security systems.

His innovations bagged him accolades from far and wide. These included the Inventor of the year award from NACOSTI (2010-2012), and the Vision 2030’s best manufacturing award in 2013.

In 2015, he was nominated for the Mandela Washington fellowship, a flagship program started by former US president Obama’s Young African Leaders Initiative.

This culminated into a three-month long scholarship at the University of Notre Dame, Indiana, and a job offer from global tech giant IBM. “IBM offered me employment at their innovation center. However, I chose to resign after three months as I wasn’t satisfied with playing a small role in a big process.”

Months later, Microsoft, another tech giant, came calling with a job offer. After working for a month, he resigned as he felt underutilized.

“After all this, I decided to work on my innovation. Among my innovation is a revenue collection system I designed for Kilifi county,” he said.

He’s not yet done. Not until he makes his innovation a global success. If his foray into the Nigerian market is anything to go by, then his dream is finally turning into reality.

“We were well received in the Nigerian market, although there was some opposition initially, seeing as it is that I’m a foreigner,” said Mbetsa.

He says he plans to scale his company’s manufacturing process, a move that could aid its entry into the West African market.

They say that one of the hallmarks of entreprenuers is all about spotting opportunities and turning a profit out of them.

Mbetsa saw an opportunity in purified drinking water and pounced on it. His firm has since diversified to provide purified drinking water in the Island of Mombasa, which is surrounded by salty sea water.

He employs more than 50 people directly and another 200 people indirectly.

Considering his humble background, one can easily see he is the epitome of resilience. He has overcome great odds to rise to the top. He says that he didn’t know the ropes of business while he was starting. To make matters worse, he didn’t have a mentor to guide him. “I learned through mistakes. People couldn’t simply believe I could deliver on my promises,given my young age. However, I proved them wrong, time and again.”

One of his major plans is to create a footprint across Africa. Having experienced the challenges that young innovators face, he plans to create a platform that incubates and finances upcoming innovators.

An engineer working on one of the drones before launch.

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FEATURE

ONLINE SHOPPING

BIG in retail

Online commerce is taking the lion’s share of shopping billions Amoxers Wachira

I

n most suburbs around Nairobi, Kenya’s capital, vast farmlands are giving way to mega shopping malls that are gradually changing the landscape of the city. The shiny shopping malls are part of a retail revolution that is being fuelled by a burgeoning middle class which has an insatiable thirst for consumer goods. An African Development Bank report shows that in Africa, there is a significant rise of people with a huge disposable income. The report estimates the number of the middle class, classified as those spending between $2 and $20 daily, stands at 313 million people. In East Africa,29.3 million people fall into this category, representing an average of 22.6 per cent of the population; 44.9 per cent of Kenya’s population, 18.7 per cent in Uganda, 12.1 per cent in Tanzania, 7.7 per cent in Rwanda, and 5.3 per cent in Burundi. Coupled with Africa’s heavy adoption of the mobile phone, successful mobile payments platforms and higher penetration of the internet, these factors explain why shopping malls are sprouting fast , bringing around a new shopping

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experience to shoppers.

Take the case of Garden City Mall, one of East and central Africa’s largest shopping malls. Only three years after it opened its doors to shoppers, the modern shopping mall is home to world renowned brands which are bringing more choice to local consumers.

A few miles away from the expansive mixed use shopping mall is its predecessor, Thika Road Mall, which also hosts a number of multinational brands competing for the same customers. And more shopping malls are coming up.

Two Rivers Mall which is arguably the biggest construction project in East and Central Africa is one of these. The mall is valued at Kshs13 billion, sitting on 102 acres of land in the diplomatic blue zone neighbouring up market Runda and Gigiri.

On completion, the project became the biggest destination mall in Nairobi after Garden City Mall.

Combined, the three biggest shopping malls avail an approximate retail space of 1, 500, 000 square feet according to Skyscraper City, a leading built environment data integrator, signaling the rise and rise of shopping malls in east Africa’s biggest

economy. These are part of a bigger picture of a country that is continuously registering unprecedented growth in retail, demonstrated by the surge in supply of retail space. Statistics corroborate this growth. According to Broll Property Group, a South African-based consultancy with presence in major markets in sub-Saharan Africa, Kenya is increasingly rising as a shopping destination in Africa. Broll’s managing director Malcolm Horne says an estimated 30 per cent of shopping in Kenya is now through formal retail chains compared to South Africa that has 60 per cent rating. Far from the shiny malls, however, is a revolution that is claiming the lion’s share of retail sales: online shopping. Seen as a less costly mode of selling products, and already a big hit in populous nations like Nigeria, online commerce, which involves buying of goods over the internet, is gaining traction in East Africa, and Kenya is leading the way.

One of the e-commerce sites, Jumia Kenya, owned by Africa Internet Group has recorded impressive returns after setting shop in Kenya. This followed a successful launch in Nigeria in 2012. It’s former MD Parinaz Firozi said the online

retailer grew orders by a 900 percent margin in one year, thanks to an innovative way of reaching the local consumer that the e-commerce site adopted. Since then, Jumia has been used as a launch pad by various international brands venturing into the Kenyan market.

Other e-commerce sites have also noted the huge potential that exists in this space, and are keen on tapping it.

This growth however, corresponds with the spike in numbers of internet users in Africa.

According to communications Authority of Kenya (CA) quarterly sector statistics report, the number of internet users stands at 29 million. Internet subscriptions stand at 18.8 million while mobile subscriptions dominate at 18.6 million bringing to 99 percent the number of Kenyans browsing the web via phones and to 72.7 percent the number of people with access to internet in Kenya.

This is the reason why many of these online retailers are creating mobile applications that allow for seamless online shopping as they jostle for customers who are increasingly using the mobile phone to make orders online. From food distribution, to taxi cab hailing, to clothing, electronics, imported toys, gardening tools and even household goods, more online shops continue to open their doors to virtual customers. This has created opportunities for thousands of entrepreneurs who are also making profits by

displaying and selling their wares online, eliminating the need for setting up brick and mortar premises.

How does e-commerce work? Sellers list their product on an online portal where consumers can see them, compare prices and make orders. The e-commerce site, which takes an agreed commission only for items sold and offers storage and warehousing for free, then dispatches the product to the buyers’ address.

Sellers make significant profits as they are exempted from costs such as rent, wages, salaries, government and city council charges.

Cyrus Onyiego who heads Jumia Travel, a hotel booking site says that listing on an online market place offers sellers more value since most e-commerce companies invest in site traffic, a rather expensive affair for a sole proprietor.

On the flipside, online shoppers emerge as the real winners as they enjoy competitive prices, quality products, doorstep deliveries and variety. For online buyers, the experience can only get better, especially with free flowing investments that are aimed at scaling online commerce.

In 2016, Africa Internet Group, the parent company of leading e-commerce platforms Jumia and Jumia Travel secured more than Euro 300 million in funding from new and existing investors like AXA, a worldwide leader in insurance and asset management, MTN and Rocket Internet

as well as a new investor, Goldman Sachs.

Other than this, other players in this industry are making heavy investments on their e-commerce sites to ramp them up.

Experts say that the exponential growth of e-commerce will continue unabated, buoyed by a thriving economy.

According to CA, Kenya’s e-commerce industry is worth Ksh4.3 Billion compared to South Africa’s Ksh54 Billion.

Professor Bitange Ndemo, associate professor at the University Of Nairobi School Of Business says that the fact that Kenya aspires to become a middle income economy is evidence of bright prospects for e-commerce. As the economy grows, you get more people moving out of poverty. This will be the source of new e-commerce users.

Does the unwavering growth of e-commerce spell doom to the multimillion dollar investments in brick and mortar shopping malls? Prof. Ndemo explains: Eventually both e-commerce and shopping malls will find some balance but at the moment e-commerce is largely an upper class product while other people in lower economic classes will continue shopping in malls. Despite the apparent rise of e-commerce however, a few hurdles stand in the industry’s way to reaching its full potential.

The CA cites high custom duty, taxes paid on imports and inadequate cybersecurity systems as major impediments to the growth of e-commerce in the country.

Garden City mall.

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FEATURE

CASHLESS

Can M-Pesa’s runaway success be replicated across Africa?

M-Pesa’s success made Kenya a global leader in mobile money transfer villages. There were two ways of doing that back then: the expensive but safe remittance service of the Kenya Postal Corporation; or a cumbersome travel to deliver the money — another expensive alternative.

How M-Pesa works Using data preloaded on a SIM card, M-Pesa utilises an SMS based interface to send money virtually to other phones.

A user is required to sign up for the service at any of Safaricom’s M-Pesa agents and put money into the system by handing cash, which is credited into the customer’s virtual account.

The virtual account can be used to pay for goods or services.

By Suparna Goswarmi and Amoxers Wachira

A

s the rest of the world strives to adopt cashless economies, Kenya (population: 46.6 million) is emerging as an unlikely leader in digital finance, thanks to M-Pesa, a mobile phone-based money transfer platform which is spurring a cashless revolution.

From paying for goods, services and utility bills, to booking a flight or even remittang money to people in far-flung villages, M-Pesa offers Kenyans the convenience of making transactions at the touch of a button.

The pioneering product is the outcome of the collaboration between mobile telephony giant Vodafone and Safaricom, Kenya’s leading tele-communication company. With the only requirement for

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participation being a basic mobile phone, the success of M-Pesa does not come as a surprise. It is used by over 20 million Kenyans, an equivalent of two-thirds of the adult population.

Communications Authority Q22018/19 Financial Sector Report shows that the mobile payments platform handled 616.8 million transactions valued at Ksh 1.6 trillion, between October and December 2018.

According to Central Bank of Kenya statistics for January 2019, Ksh.368 billion was transacted on mobile money platforms. Safaricom’s M-Pesa handled 80.8% of this amount, a clear demonstration of the system’s runaway success in Kenya.

At inception, M-Pesa was marketed as an alternative remittance system for Kenyans who had moved to urban centres and were looking for ways of sending money back to their families in their

Meteoric growth The single most reason for M-Pesa‘s unprecedented rise has been attributed to Africa’s heavy adoption of mobile phones.

More than 80 per cent of Kenyans own a mobile phone, or can easily access one.

M-Pesa’s huge adoption demonstrates how readily available technology and culture can be blended to deepen financial inclusion in Africa, where most people still remain unbanked or under banked.

Safaricom’s chief executive Bob Collymore said, “Electronic transfers save people time, freeing them to do other, more productive things instead. We are happy with such growth and it definitely means Kenya is slowly moving into a cashless society. Mobile money has become a way of life for more Kenyans and there is still big room for growth.”

But, it does not seem as easy as it sounds.

And this raises the question, can M-Pesa’s success be replicated elsewhere?

There are only a few success stories in other African countries.

Many say that the comparisons are unfair and it would be wrong to expect every company to replicate the success the British telecom giant enjoyed in Kenya.

Mobile money & MFIs

What an idea The idea of M-PESA was conceived by a London-based team within Vodafone, led by Nick Hughes and Susie Lonie. They believed that mobile phones could play an important role in lowering the cost of accessing financial services.

The idea was picked by the Safaricom team in Kenya, led by then CEO Michael Joseph and product manager Pauline Vaughn.

Key challenge at launch

The going, however, was not easy. Safaricom needed to set up a widespread network of agents to enable customers to access their cash. Susie Lonie, who was instrumental in launching and running the service, says, “The real challenge was convincing the agents. They were dealing with something that was completely new.” The company started with 185 agents for the country before ramping up the number to 2,000 at the time of the launch.

The reason is each market grows at a variable rate and is based on factors which only partially include regulation, mobile network operator (MNO) market share, population density, willingness to engage in the business by banks among others.

David Kleiman, Laos-based senior consultant for digital financial services and branchless banking, PHB Development, says, “To say that others have not been able to emulate M-Pesa is like saying that none of the world’s top tennis players can emulate Roger Federer. There is a lot happening in this space and we should not let one player’s success obfuscate the basic truth that there is a strong field out there.”

It is also important to understand the market situation in 2007 when M-Pesa was launched. Romal Shetty, partner and head of telecom practice, KPMG, says, “One of the biggest differences between Kenya and other African countries is that when Safaricom introduced M-Pesa, the

Mobile banking has come handy for microfinance institutions, whose clients are typically from the unbanked section. According to Global Mobile Money Adoption, there are more mobile money accounts than regular bank accounts in Kenya, Madagascar, Tanzania and Uganda.

Also, there are more mobile money outlets than conventional bank branches in 25 countries.

M-banking has become an alternate delivery channel for many microfinance institutions.

Take the case of Musoni, the Kenyan MFI which is 100% cashless. “Musoni is the first microfinance institution in Kenya, which is 100% mobile. The concept is based on mobile banking.

Clients receive loans and repay through M-Pesa,” says James Onyutta, former CEO, Musoni, which started operations in April 2010. It now has about 20,000 customers. Musoni manages with 50% of the cost it would incur were it to operate without mobile banking.

company was able to capitalise on its near-monopoly in Kenya’s telecommunications market.”

Another reason for the slack uptick of mobile money in other countries is tough regulatory environment, which differs with each country as well as region. For instance, though West Africa brought in regulations for mobile money in 2006, Central Africa is yet to come up with any. Even with West African countries, for some nations, it is a bank-led service while for others the service is led by mobile operators.

Nonetheless, regulators in many markets are paving the way for e-money and the entry of non-bank operators. Business models and systems for electronic remittances — both domestic and international — have already been well-tested in other markets around the globe, say McKinsey analysts.

Scenting an opportunity, many financial providers are getting into collaboration

with mobile companies. A few years ago, Bank of Khartoum became the first to launch mobile payments in Sudan. The product is called Hassa which means ‘Now’ in Arabic. Kashif Mohammed Naeem, EVP & group head (Retail, SME & Microfinance), Bank of Khartoum, says, “Banking penetration in Africa is around 20% and mobile money targets unbanked Africa. Sudan is no different from other African countries. We have just 0.27 bank branches per 1000 km square and about 15% banking penetration. However, mobile penetration is around 75%.” Hassa is targeting the unbanked and converting the existing un-official means of money transfer into a formal channel of mobile money.

How far they, and others, will succeed cannot be predicted, but one thing is for sure: Kenya has shown the world that a mobile phone is more than just a device meant for talking.

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FARMING

HYDROPONICS

Farmers turn to hydroponics to beat drought

R

ain or shine, Moses Karanu no longer worries about feeding his five cows. The young farmer has found a lasting solution-hydroponics fodder, a method that allows him to grow fodder for his livestock, throughout the year.

Gone are the days he could watch helplessly as his animals stared at starvation, especially during the hard-hitting drought that was recently experienced in most parts of the East African region.

Recurring dry spells in Africa are leaving millions of livestock starving, and millions of people facing food insecurity.

In hydroponics, farmers have found a way of beating drought. They mix seeds of wheat,sorghum, or barley with water in specialized trays and wait for a week.

They then harvest the lush green fodder which they feed to livestock.

Karanu is among the hundreds of farmers across the country who are embracing hydroponic farming.

Nancy Gathering, another farmer, almost sold her herd of ten cows three years ago. The cost of animal feeds was skyrocketing, and dairy-farming was increasingly becoming untenable.

She days she used Kes10000 per month to buy nappier grass for her cows.

Their milk production could be affected

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by drought, sometimes leaving her counting losses. “I was earning Kes18000 per month after selling milk. Yet, I was using a similar amount to feed the animals. It didn’t make business sense.”

Through a friend, she learned of the hydroponics concept and has never looked back.

With this concept, she was able to grow her income two-fold while cutting her expenses by a huge margin.

“At this rate, I plan to buy more cows to further boost my income.”

What’s hydroponics all about?

It’s a soil-less culture technology that uses less water and land and yields up to ten times more than an open field.

Using the method, you can mix grains, including maize, wheat and barley in trays. They take only days to grow, compared to months when done conventionally in an open field.

According to Samuel Mbugua, a partner at hydroponics firm, Grandeur Africa, this kind of fodder is a perfect solution for farmers given that it supplies them with feeds all round the year.

“It’s also less costly than animal feeds,” he says.

Mbugua,a biochemistry graduate, quit his job to rear pigs. A few months after starting his pig farm, the government introduced value added tax on animal feeds, a move that threw him out of business.

“The price of animal feeds soared and we couldn’t afford to feed our pigs,” When he was about to throw in the towel, he came across the concept of hydroponic farming.

Using this concept, Mbugua and his partners were back in business. They banked on it to grow their business. It paid off.

After a few months, they saw a need to introduce the concept to many other farmers who had a similar challenge.

And that’s how they founded Grandeur Africa, a company that installs hydroponic units across Africa.

The firm trains farmers about the best practices in hydroponics farming. It has gone beyond borders and now serves farmers in as far away as Nigeria.

To set up a hydroponics unit, Mbugua says a farmer should first build a shelter as the crops need shade.

They also need to buy quality seeds and aluminium trays.

Once everything is in place, farmers simply put the seeds in the trays, add the nutrients and water and wait fie the

fodder to mature. It takes only seven days. “For cows, you can feed them with seven-day old fodder. Rabbits can be fed with three to four-day old fodder.”

Mbugua says the concept can also be used to reduce conflicts within pastoralist communities. He added that these communities always fight over grazing land, yet hydroponics could help them feed their animals sustainably.

The hydroponics system has been around for hundreds of years in the medical world. However, it’s only gaining traction in Africa.

According to experts, the fast rising concept could dominate food production in future.

Although it has helped change farmers’ fortunes, hydroponics has its challenges.

Mbugua said many farmers do not have the financial resources to buy the trays and to build shelter needed to grow

hydroponic fodder.

He added that a simple shed costs Kes10000, but most small holder farmers do not have that kind of capital to invest in hydroponics fodder.

Secondly, hydroponics fodder requires about a litre of water per kilo of fodder, which is still a lot of water for most people, especially in dry areas. However, it’s important to note that hydroponic fodder still uses less water than conventional methods of farming.

To further boost adoption of this concept, experts say there’s need for more extension officers to train farmers on specialist skills around hydroponics farming.

Mbugua plans to reach out to more farmers in the next five years to popularize the concept. He believes it could be the future of farming, across Africa.

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FARMING

HYDROPONICS

Going bananas: How tissue culture technology is boosting banana production A local university banks on Tissue Cultured bananas to address notorious viral diseases associated with the crop, as farmers see their incomes soar

By Jeff Korir

P

lanting materials that are prone to diseases, mature slowly and whose yields are low have been a major setback for Kenyan farmers. Take the case of bananas for instance. Bananas are widely grown in Kenya as a staple food and as an income generating activity by many communities.

Due to a widespread problem of viral diseases, farmers have struggled to sustain the growing demand of the crop as they lose most of the plants to diseases, including the notorious Banana Wilt. This makes banana farming lose its allure due to the falling profits. Granted, there is need for the country to adopt technologies that will give advantage to farmers in the provision of better quality, fast maturing, high yielding, and disease resistant planting materials. One of the types of technology that can be adopted is tissue culture as it is easily adoptive to existing planting materials that are indigenous and abundant.

Tissue culture is a method of producing

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plants from roots, leaves or stems under sterile conditions and multiplying them.

One of the crops currently under threat and can be saved by this technology is banana.

Dr Winfred Karugu, Managing Director of Jomo Kenyatta University of Agriculture and Technology Enterprises (JKUATES), says the conventional method of banana tissue culture propagation via off-shoots does not avail enough planting material to meet the demand of planting and replanting. In addition to the limited number of off-shoots, the cost of plant material is high and needs close and special care for success. For all these reasons, the Institute of Biotechnology and Research (IBR) laboratory at the university is using plant tissue culture technique in banana multiplication to produce large numbers of good quality and free of disease planting materials in a shorter time.

What is Tissue culture banana?

Tissue Culture (TC) is a technology by which cells, tissues or organs are cultivat-

ed and multiplied in specially formulated nutrient media. Under the right conditions entire plants can be regenerated from single cells. TC is an appropriate technology for developing countries for the production of disease and pest free, high quality planting materials and a rapid multiplication of many uniform plants. “This technology has been in use for many years but it is only recently that the demand has risen due to our quest for development, better livelihood and a cleaner environment, shares Dr. Karugu.

JKUATES produces thousands of TC bananas in their IBR lab daily, as the institution seeks to turn around the dwindling fortunes of farmers and free the country of hunger.

How it is done Banana is conventionally propagated by vegetative means, and can easily be adopted for tissue culturing in a laboratory and the inherent benefits of the system can be successfully employed to fully exploit the economic

potential of source of mother plant material which are selected from areas that have recorded disease free cropping several years. From such source, healthy, vigorous, high yielding donor plants of the desired banana cultivar (short for cultivated varieties-are plants you buy that have been propagated not from seed, but rather vegetatively) are identified in the clonal selection process.

According to Grace Wacheke, a biotechnoligist at JKUATES IBR lab, the first stage of the TC technology is selection of young offshoots. Young offshoots are separated from selected mother plants that are of a good variety, healthy and free from insect pests and diseases. The separation should be clean cut and without damaging the growing meristem (tissue in most plants containing undifferentiated cells).

The off-shoot leaves are removed to reach the growing point of the banana plant. In the laboratory, the undifferentiated leaves are dissected to reach the targeted meristematic tissue.

From there, the dissected parts are initiated into a cultured medium in culture bottles containing medium supplemented with hormones to initiate multiple shoots.

Rooting Good and healthy plantlets are separated and transferred to special hormone medium for rooting.

The initiated tissue, subsequently under disease free and controlled environment of a laboratory is multiplied several fold to obtain the required number of each cultivar depending upon the market demand. Periodically the rooted plantlets of banana are released from the laboratory to a climate controlled green house for acclimatization, which requires eight to twelve weeks to complete the hardening process. The hardened plantlets will have 4-5 leaves and well developed root system at the end of the period.

Acclimatization This means that the plant can now adjust to a gradual change in its environment.

This is done in a temperature controlled room. After this procedure, plantlets are transferred to the fields. However, plantlets must be graded based on

their height and girth prior to planting in the main field. Plantlets are sold to the farms pending a month stay at a shade house before transplanting. They cost shs70. Ready to transplant seedlings also known as potted seedlings are sold to farmers at a cost of shs100. Banana plants are of two main varieties, the cooking and ripening types.

Ripening type include Williams, Giant Cavendish, Grand nain,Chinese Drawf, Kampala (Gros Michel), Williams hybrid, Gold finger, Kisii sweet and Vallary while the cooking type are Kisii game, Kisii matoke, Ng’ombe and Nusu Ng’ombe, all cultured at the IBR. Advantages One of the benefits arising by the use of Tissue culture banana plantlets over conventional suckers is high yielding progenies of true-to type, uniform elite clones of different varieties available in large quantities in tissue culture process.

Due to this, Tissue culture banana plantlets are disease free at the time of planting and the same conditions can be maintained by proper crop management. Additionally, Tissue culture vigor in the plantlets manifests better growth and performance in the field.

Grace says that TC bananas take a maximum of 12 months to mature compared to conventional suckers which can take as long as 18-24 months.

The technology also ensures that

plantlets are readily available throughout the year as they are not constrained by seasonal variations.

Enock Kibagendi, a young banana farmer in Kisii County says that TC plantlets are cheaper and easier to propagate and transport.

“They also have a higher survival rate in the field, he says.

According to Dr. Karugu, TC bananas reduce the cost of controlling foliar diseases (affecting the leaves and stem) by 50%. Tissue culture banana plants also gives better price in the market as the fruit is bigger than the conventional fruits.

However, though this technology has gained popularity among banana farmers in the country, some people still associate it with genetically modified organisms.

It’s not genetically modified in any way,” says Mrs. Wacheke.

Mr.Meshack Kimondo is a marketing executive at JKUATES. He says thousands of farmers are still using suckers from their gardens. However the technology is slowly taking root. Over the recent past, he has received an increasingly large number of individual farmers and farmer groups interested in tissue culture bananas. He believes more efforts should be put in place to teach farmers the advantages of TC bananas. He adds it has advantages over the existing suckers that may be diseased. The technology has come at a time when we need it most and should be embraced, he says.

Welcome idea James Kimani, a farmer, says the technology is a welcome idea and will go a long way in helping farmers restore the depleted banana plantations and earn millions from bananas.

Banana can be grown throughout the year, if perennial water supply is available for irrigation.

“With these advantages the farmers and rural communities are able to earn more money and also have a constant source of income, have more food, create employment, and provide raw material for many Industrial food products like wine, flours, confectionaries and handcraft, concludes Dr. Karugu.

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