1. Kenya Opportunity Supporting Kenya BPO development Strategy Presentation to the World Bank Singapore June 2009

2. Kenya  Population (million): 37.5  Population Growth (annual %): 2.6  Area (sq km/thousands): 580.4  Capital City: Nairobi  GDP Growth Rate (%): 7.0 (2007)  GNI ($ billion) 25.6  GNI per Capita: US$680  Life Expectancy at Birth: 53.4 years

3. Source: Vision 2030 BPO in Vision 2030 Move towards greater efficiency and at least a 30% formal market share* Create 10 hubs and 1000-1500 PBGs 10 Tier 1 retail markets Add 3 new retailers with national reach Goals for 2012 1. Tourism2. Agriculture4. Manufacturing 5. Business Process Offshoring Be a top 10 long- haul tourist destination Innovative, commercially oriented and modern Improve competitiveness to revolutionise sector Quickly become one of the top 3 BPO destinations in Africa Efficient and globally competitive driving high savings and financing investments Increase beds from ¬ 40,000 to ¬ 65,000 Increase visitors from 1.8 M to 3 M Raise yields of key crops by ~3x Better utilisation of up to 1M ha 600K-1M new hectares made arable Create at least 2 SECs with at least 10 large international players as well as at least 5 SME parks Create 7,500 direct BPO jobs, 5000 of which are in BPO park Raise savings and investment to ~25-30% of GDP Public sector reform Infrastructure development People development Land reform Economic pillar To maintain a sustained average economic growth rate of 10% per year over the next 25 years Transversal reforms and key enablers Visions 3. Wholesale & retail6. Financial services

4. BPO in Kenya Kenya will focus on becoming a niche player (as other smaller-scale countries have done). Kenya will initially concentrate on basic voice services for the English speaking market. Under Vision 2030 Kenya will capture a part of the US 220b global market for BPO, creating at least 7,500 direct jobs and increasing GDP by Ksh 10b by 2012.

5. Kenya’s key challenge Attracting new investors against a backdrop of mixed perceptions among potential investors. –Connectivity (which we are addressing) –Leveraging Talent –Office space

6. Our strategy to develop the BPO sector

7. The East Africa Marine Systems (TEAMS) Bandwidth: 640 GB 5,600 Kms Contract signed. Completion date: June 2009 and will be fully operational by October 2009 when it is connected to the NOFBI East Africa Submarine Cable System (EASSy) 10, 000 Kms Bandwidth: 120 GB scalable to 1.2 TB Completion date: April 2010 (fully operational) SEACOM 13,700 Kms Construction commenced 2008 ETD Mid 2009 Bandwidth: 120 GB scalable to 1.2 TB Initiatives underway to greatly improve access to high-speed connectivity; 2 programs are Government-sponsored.

8. Central region Coat and North Eastern region Telkom Kenya Network Western Region National Optic Fibre Backbone Initiative (NOFBI) 5,000 Kms Nearing Completion Down payment paid Completion date: February 2010. The National Optic Fibre Backbone Initiative provides a backbone throughout Kenya

9. Kenya’s BPO ready strengths The available pool of employees with suitable skills and talents forms a good basis for a BPO&O sector. An Investment ready operating environment is a top Government priority. The communication infrastructure will soon be world class. There is a strong presence of certain service providers (in HR, IT and Consulting). Kenya is cost competitive and therefore likely to pass basic investor evaluation criteria for cost

10. Key Strategies Marketing –Launch an international go-to-market strategy. Operating environment –Incentives –Policy Education –Revise common curricula for BPO –Implement short-term, specialised and highly practical BPO&O training all levels –Coordinate university–industry collaboration to develop specialised technical skills for the IT industry

11. Potential area of World Bank Support

12. World Bank support for skills development Kenya Government will require a minimum of Ksh 8 billion (USD 95–105 million) over the next 6 years to develop the industry. The skills required of Kenya ’ s envisaged BPO&O industry are for basic voice and data operators (70%), managers (5%), engineers (10%) and technicians (15%).

13. Skills upgrade programme Execute extensive interventions to transform tertiary education: –Expand universities to increase the enrolment of students –Introduce a compulsory general BPO&O course in all four undergraduate university years –Offer specific, short and practical postgraduate programmes, focusing on skills required for basic voice and data operators this will be offered by TIVETs –Offer a master’s programme in BPO&O management –Collaborate with international universities to build investor credibility

14. Thank you