During an annual meeting hosted by the Ministry of ICT at the capital Nairobi. The Kenyan government through the CS, Joe Mucheru said it is going to set aside Ksh. 1 billion ($9,883,700) to support local startups venturing into the mobile telephone hardware and software business.
This announcement comes against a backdrop of statistics showing that Kenya imports about 50 million telephone devices every two years. The government is now challenging the local entrepreneurial space to venture into the Original Equipment Manufacturing (OEM), which if followed through will see Kenya produce its own smartphones.
Kenya’s ICT sector is one of the fastest growing sectors in its domestic economy. The country is witnessing a sharp rise in the demand for high-speed internet connection, and fintech innovations that not only take banking services to the unbanked. But also makes sending and receiving money, paying utility bills, and managing one’s cash easier for the already banked.
Kenya like most Developing Nations lack Industrial Base
On paper, it looks encouraging that Kenya wants to substitute importation of mobile handsets with ones that are locally manufactured. However, the reality still remains, Kenya like most other developing nations lack a solid industrial base.
It is, therefore, a challenge upon the government of the day and other stakeholders to establish the prerequisite industrial base. It would require ensuring adequate and reliable supply of energy to the industries at friendly tariffs.
The fact that the sole power distributor in the country (Kenya Power) is bogged down with bad corporate governance that saw millions of taxpayers’ money being embezzled instead of acquiring the equipment needed to make the parastatal run efficiently.
The fact that the cost of living and doing business increased with the recently passed (controversially passed) Finance Bill 2018 does very little to give local firms enough confidence to pursue such capital-intensive investments.
The government first, and foremost need to nurture the local industrial base. It might be necessary for the government to impose import quotas to check on the number of foreign goods arriving into the country.