OBBO: Kenyan corporate giants defy Covid, expand regional footprint

Monday May 31 2021

Safaricom’s foray in Ethiopia marks a good run for the big Kenyan companies during the Covid-19 pandemic. PHOTO | FILE | NMG

By Charles Onyango-Obbo

After it was announced in Addis Ababa on the weekend that the consortium with Kenya’s giant mobile phone and money operator Safaricom had won the second licence to operate in the massive Ethiopian market, its stock price on the Nairobi Securities Exchange would go crazy on the first day of trading after the news. Its shares made the largest one-day gain on a single stock in the history of the NSE.

The soundtrack to that fortune was likely the decision a few days by Ethiopia allowed foreign telcos to operate mobile phone-based financial services, opening the doors for Safaricom to launch its money-spinning behemoth M-Pesa in the future.

Safaricom’s foray in Ethiopia marks a good run for the big Kenyan companies during the Covid-19 pandemic, with Equity Bank closing out acquisitions in the Democratic Republic of the Congo and becoming the second-largest lender in the country, and KCB Bank also gobbling up the second largest bank in Rwanda, and a unit in Tanzania. Both banks are building big new offices in the Rwandan capital Kigali, to function largely as their hubs in Central Africa.

Money has always been, perhaps, the most important “second truck” driver of regional integration, after the formal political actions of governments (enabling travel, passing policies that make it easy to work, enable border crossings, and so on).

Equity, KCB, and Safaricom (especially given word in the Nairobi corporate grapevine that Safaricom is eyeing a Sudan entry), and a few other big companies in the region, are dramatically expanding the outside borders of East Africa, even if they might not be deliberately doing so.

With the big Kenyan banks having already pocketed a chunk of South Sudan, these players are now all but set to try and lock in Middle Africa. They are the Trojan horses of regional integration.


Alive to the unsaid strategic realities, in April Kenya President Uhuru Kenyatta visited the new favourite destination of the Nairobi Establishment — Kinshasa, the capital of the DRC. He unveiled Equity’s new DRC brand, and toured the 18-floor Equity Centre in Kinshasa, urging the private sector to “champion regional integration and the realisation of the ideals of the Africa Continental Free Trade Area.”

Kenyan leaders have gone to great lengths to butter up DRC and President Félix Tshisekedi. Clearly, it is realpolitik, not because DRC is a wonderful tourist destination.

What is lacking to create a really big bang is a fast train service across East African borders, or a low-cost carrier that is East and Central Africa’s matatu in space whizzing around the capitals for $100.

Still, fast forward to 2025, or even earlier in 2023. Lying in your bed today, if you go into your M-Pesa app you can send money from Kenya to Burundi, Rwanda, Tanzania, and Uganda. By 2023, Ethiopia might get on the drop-down menu, and maybe by 2025 Sudan and DRC might be there too.

That there, will be about 250 million more people in the East African fold. Just like that.

Charles Onyango-Obbo is a journalist, writer and curator of the “Wall of Great Africans”. [email protected]