Service sector to drive Kenya's economy - report

When Kencall employed some 100 people from Mombasa recently, it had its Tanzania customers in mind.
Kiswahili, a language Mombasa residents speak with a fluency and intonation that is as close as one can get to Tanzanians’, is Tanzania’s official language.

The company made the decision in order to make Tanzanians feel at home when being attended to from the Kencall Business Process Outsourcing centre.

“When a Tanzanian calls our centre and is attended to by a Kenyan from Mombasa in Nairobi, he has no idea that his call to Zain Tanzania was received in Kenya and his queries attended,” said operations director Eric Nesbitt.

This is just one illustration of how, in the middle of high levels of unemployment and a difficult business environment, Kenya is scoring high as a professional services centre, a development that could catapult the country into a major global business hub in the coming years.

A report compiled by the World Bank and the Export Promotion Council indicates that Kenya is becoming a service driven economy shedding the age-old dependence on agriculture and the manufacturing sectors.

Globally, the service sector accounts for 20 per cent of the economy, while the industry in Kenya currently stands at 60 per cent of GDP, with a corresponding 68 per cent of employment creation.

Agriculture and industry, previously the key growth drivers, are at 24 and 17 per cent respectively.
According to the East African Community Secretary General Juma Mwapachu, the region must move towards a knowledge-based economy as opposed to goods.

“The world’s biggest economies are knowledge-based. We are beginning to see that drift especially in Kenya and Rwanda,” he said, adding that Kenya, at 60 per cent, is reaching the threshold of a service driven economy of 68 per cent.

The World Bank-EPC report says that come July when East Africa ushers in the Common Market Protocol, Kenya will be the biggest beneficiary of free cross-border movement of people, goods, capital and services.

According to Mr Nesbitt, the BPO services will reap big especially from Rwanda and Burundi by employing French-speaking professionals to serve Francophone clientelle.

Apart from the BPO, other sectors that have been earmarked as having high potential are accountancy, engineering, information communications technology, information enabled services, the legal field, insurance, non-banking financial services and freight and forwarding.

The government has offered to rent all the space at the Sameer Business Park, on Mombasa Road, for Ksh2 billion ($26 million) to enable the country provide Internet and telecommunication services to businesses.

BPO, a key component of Kenya’s economic development blueprint Vision 2030, focuses on hiring a third party company to undertake selected activities such as customer service, marketing, telephone operations — and many more.

Kenya is the only country in the region with a well-established BPO industry; it boasts about 60 registered operators and counting.

Outsourcing is increasing becoming beneficial for businesses because of the added attention that the providers give to customers.