8/12/2019 Gloomy Outlook for Kenya in New Report

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BY SOLOMON KIRIMI

KENYAS economic growthprospects may be dampenedby the by the unpredictableduration of Eurozone crisis,a new report shows.

According to the re-cently published AfricanEconomic Outlook 2012,a deeper eurozone crisiswhich has led to lowerearnings from exports andtourism, lower inflows ofofficial development as-sistance, foreign direct in-vestment and workers re-mittances could also affectAfrican markets which areKenyas secondary marketafter Europe.

It has been estimatedthat a one-percentagepoint decline of GrossDomestic Product in Eu-ropean States membercountries causes AfricanGDP to decline by about0.5 per cent and Africas

export earnings drop byabout 10 per cent.

The report states thatdeeper crisis in Europewould lead to direct impacton Kenyan goods especiallyflowers and horticulturalproducts which rely on theEuropean market, as theprimary destination.

The report predictsthat if the crisis in Eu-rope hits other advancedand emerging countries,it would deal a secondblow to Africas exportsto these countries whichare expected to serve asalternative markets.

The importance of for-eign investment, develop-ment assistance and re-mittances are difficult toassess, the report states.

The overall impact onAfrica of a deeper financial

crisis in Europe would de-pend on the depth and du-ration of this crisis and itscontagion to other parts ofthe globe.

While launching the re-port, the minister for plan-ning Wycliffe Oparanya saidthe worlds view of Kenyaand its growth is changingdue to high prospects of oildiscoveries.

Oparanya said this is ex-pected to attract high valueforeign direct investmentsand boost Kenyas effortsremain the trade hub ofchoice for multinationalcompanies venturing into

the region.However according to

Kwame Owino of the In-stitute of Economic affairs,Kenyas gross DomesticProduct does not translateto wealth for the popula-tion because most of themare not in a position to reapfrom the new opportuni-ties.

The growth rate for the

first nine months is expect-ed to rise to 5.2 per cent in2012, and to 5.5 per cent in2013.

He said Kenya needs tofind alternative ways of cre-ating gainful of employment

for people who are neitherin the youth bracket or re-tirement age, who currentlyremain a neglected group ofjobless people.

These people need atten-tion not because of fears ofupraising like it happenedin North Africa or class war,but because they form acritical group of skilled peo-ple who just happened to be

out of school when oppor-tunities were scarce, mean-ing they have no workingexperience in their chosenprofessions although theyare above 35 years old,Owino said.

36 LOCAL THE STAR Monday, August 20, 2012

BY SOLOMON KIRIMI

HOME-grown companiesSafaricom, Nakumatt andEquity bank are amongseven companies thatdominated the top 20 UKsSuperbrands list of Kenyasstrongest consumer brands2012.

The survey conducted byLondon based The Centrefor Brand Analysis andresearch firm TNS RMS,sought to identify countrys

strongest brands.In difficult global

economic times a strongbrand provides businesseswith a powerful advantageover rivals, said StephenCheliotis, Chairman of TheCentre for Brand Analysis.Safaricom in particularshould be delighted thatamong the large number ofbrands we researched theycame out on top.

The research incorporat-ed the views of both expert

council and over 600 localconsumers.

Among the local brandsmaking the list, were M-Pesa, Coca-Cola and KenyaRed Cross.

It is notable that al-though many internationalbrands, such as Coca-Cola,have performed well in thestudy the top end of therankings are not dominatedby multinational brands.Cheliotis said.

The companies were

cited for offering custom-ers significant emotional ortangible advantages overother brands.

The survey judgementcriteria includes quality as-sessment and how reliableit is, including whether thebrand can be trusted to de-liver consistently on prom-ises and maintain productand service standards.

The criteria also evalu-ates how well the brand isknown.

Local brands outshine multinationals in survey

Hbusiness UP TO DATE, ACCURATE BUSINESS INFORMATIONNEWS YOU CAN USE, EVERY DAY

Gloomy outlook forKenya in new report

Can YOU outsmartthe expert?

ALY KHANS

STAR

PORTFOLIO

Ialways marvel at the popularity of my newspaperseller. The appetite for news in Kenya is simply offthe charts. And that has been the case for as longas I can remember. Of course, once upon a time, weonly had one channel the Voice of Kenya. Subse-

quently we have had a massive channel explosion. Wehave a multiplicity of TV channels, radio stations. Othersare consuming their news via the internet leveraging thereal time via the likes of twitter and predominantly viathe mobile phone. If you pause for a moment, its actuallyan extraordinary and increasingly 21st century informa-tion landscape. We have venerable players like the NationMedia Group, the likes of Citizen and the Radio AfricaGroup who were once upstarts and start ups. Not forget-ting Christopher Kirubis Capital radio.

The likes of CCTV have set up shop in Nairobi and last

week the New York times said this about the move;Chinese news media officials chose to set up shop inNairobi because of its role as a news hub for the English-speaking countries in East Africa.

And thats the point. We talk often of being a regionalhub but we are also a news hub and in what is clearly aninformation century that is a marvellous thing.

By the way, the Chinese are spending $7b on thismedia expansion and have set up quite a swanky gigin the K-REP building in Nairobi. I did an interview withBeatrice Marshall, where we were on a simultaneous livefeed with Tehran, Beijing and Washington. Thats prettyimpressive, in my humble opinion.

Look at Bharat Thakrars ScanGroup which has par-layed a position in Kenya into an imminent Sub SaharanAfrica position.

The eyeballs and the scale of the market are con-firmed by the congregation around my newspaper seller.

The media eco-system is in fact multi dimensional.

There is the traditional offline newspaper and incrediblyis very profitable, whereas in other parts of the world itssimply cratered.

Then at the other end of the spectrum, we have thedigital experience. I am an evangelist when it comes tothe digital space and think there is a parabolic growthcurve in mobile, digital media.

Nation Media Group released strong first half resultsand the share price has rallied about 15 per cent sincethat release. The catalyst was the announcement of hisdiaspora remittance card. All of us who have been abroadhave used the Nation web site for our daily dose of homenews. The eyeballs the Nation has on its web site wasnever the issue.

The issue was how were they going to monetise?The card was all about the monetisation of eyeballs.And it is that penny that dropped with investors.There is a bucket load of cash looking for toothpaste

and consumer businesses to buy out as everyone getsexcited about the East African consumer, I grant you that.

However, I venture our media sector in its manydimensions and complexities is simply red hot and rightnow a yellow brick road.

Shares go up and down and readers are advised that this

column represents Mr Satchus personal opinions.

KENYA HAS BECOME A

MEDIA LAB

INDICATOR: President Kibaki receives the Economic Survey 2012 report from Planning, Minis-ter Wycliffe Oparanya at his Harambee House office on June 8.

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