Kencall….Is Kenya The Next African Tiger?

Here is an interesting article on Kenya’s outsourcing industry from the globalization obsessed journalist, Thomas Friedman (writing for the New York Times).  How many call centers are there in Kenya today?
April 4, 2007
Op-Ed Columnist
The African Connection
By THOMAS L. FRIEDMAN
NAIROBI, Kenya

Was anybody out there checking out jobs with the U.S. post office in 2005? Do you remember when you called that 800 number to get details? Sure you do. Do you remember how the voice on the other end of the line helping you had this soft British accent with a slight African lilt? Do you know why? Because you were routed to a call center in Kenya.

So maybe you weren’t looking for a job, but you had just bought a new computer. And when you turned it on, you clicked the icon for one of America’s biggest Internet service providers to get broadband access. But you needed someone to talk you through getting it connected — so you called that 800 number. The techie who helped you was also a Kenyan at that same Nairobi call center.

It’s called KenCall. It is located in an abandoned avocado processing plant, and it is the largest of Kenya’s blooming outsourcing call centers, with almost 300 employees and annual revenues that have grown to $3.5 million since it opened three years ago. If you’re surprised it’s here, so are most of its customers.

“I was actually talking to someone in America who had just given birth and she was ordering high-speed D.S.L. for her new residence — three or four hours after the birth,” said Nina Nyongesa, a 25-year-old KenCall supervisor and I.T. graduate of Nairobi University. “She said to me, ‘Where are you?’ I said, ‘Nairobi.’ And she said, ‘Are you sure?’ And she was really happy — so she bought one for herself, one for her mother and one for her mother-in-law. So instead of making one sale I made three.”

KenCall is one small reason that Kenya’s economy grew 6 percent last year. Yes, Kenya still has all the ills of other African states — from AIDS to abject poverty. But Kenya also now has a democratically elected government that is learning to get out of the way of Kenya’s entrepreneurs and to get them the bandwidth they need to compete globally. It’s way too early to declare Kenya an economic “African Tiger,” but something is stirring here that bears watching — and KenCall is emblematic of it.

The company was started by the half-English, half-Kenyan Nicholas Nesbitt, his brother Eric and his brother-in-law Stephen Liggins. Nicholas Nesbitt and Liggins had made successful careers on Wall Street. But after Kenya’s democratic elections in 2002, they decided to come home and see if they could do good for their country and for themselves by taking advantage of Kenya’s large pool of educated, English-speaking talent to break into the outsourcing industry.

There was one big problem. Kenya, like the rest of East Africa, was not connected to any global undersea fiber-optic cable that would give it the cheap high-speed bandwidth of the scale needed by call centers. The Internet here all came via satellite, which is more expensive to begin with and was made even more so by the fact that the Kenyan state phone company had a monopoly.

In a rare move in Africa, the Kenyan government decided to give up that monopoly and open competition for satellite-provided bandwidth — even though it meant laying off 6,000 government workers. The competition made KenCall’s business possible. The Kenyan government is now working feverishly to get connected to the global fiber-optic network, via an undersea cable, which would make bandwidth here cheap and plentiful enough for all sorts of outsourcing.

KenCall opened in late 2004, taking orders for U.S. late-night TV commercials. Its Kenyan operators sold Yellow Page ads, security alarms and mortgages. But it has since grown its business to include data-entry for one of the premier Wall Street credit-rating firms and handling service calls for global banks and insurance companies. For an economy dependent on coffee, safaris and flowers, this is a real change of pace.

“The concept of connecting to the outside world and attracting investors from the outside — that has not been here before,” remarked Stephen Ogunde, another KenCall supervisor.

KenCall’s employees can make in a month what half of Kenya’s population makes in a year: around $350. They get health care and free transportation.

Don’t give up on Africa. KenCall is a reminder that with a little less government regulation, a little more democracy and a lot more bandwidth, African entrepreneurs can play this game too. “In the old days, ‘landlocked’ meant you didn’t have a harbor,” said Mr. Nesbitt. “In the new days, it means you don’t have fiber broadband to the rest of the world. This whole market here is just waiting for that.”

What do you think?

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