Pivot25 Fireside Chat on the Role of Government in ICT and Private Stakeholder Participation
- PS Bitange Ndemo (PS Ministry of Information and Communication)
- John Staley (Director of Mobile Banking and Payments Innovation, Equity Bank)
- Kamal Budhabhatti (CEO, Craft Silicon)
- Mike Macharia (CEO, Seven Sea Technologies)
P.S. Ndemo announced that the Kenyan government has made a lot of progress on the Malili Technology Park (Nairobi, Kenya). PS Ndemo anticipates that by the end of 2011, the technology park construction will begin. The IT infrastructure needed for the technology park is now available (since the installation of the fiber optic cables) and the next step, Ndemo stated, is to promote content and app development. Therefore, the Kenyan government will focus on encouraging and supporting entrepreneurs and techies.
Ndemo believes the government’s original role is to facilitate and regulate the tech space in Kenya. But the Ministry of ICT has discovered that even more needs to be done—the ministry must get further involved. Ndemo is therefore looking for ways to facilitate and further support the development of the sector. At the end of this month (June 2011), the Permanent Secretary stated that the Ministry will be launching an Open Government initiative where all desired government data will be made available to the public, and developers will be able to create new applications based on that data. Once the government data is available, the potential for applications will be immense.
During the fireside chat, John Staley of Equity Bank stated that a big problem in Kenya is the gap between the m-commerce sphere and the formal banking sphere. Kenyan telcos control the product as well as the channel that most of the customers have to use. Staley stated we must address this crucial issue if we are going to open up the Kenyan economy. There needs to be a single regulator since much of m-commerce like M-Pesa fall between the cracks. “Who governs M-Pesa, is it CCK or CPK?” Furthermore, if formal banks are going to join in the market, formal banks also need access to such technology. All need access to the SIM card if businesses are to provide more mobile services for customers. According to Staley, “whoever controls the SIM card, controls the ecosystem in Kenya.” Therefore, he asserted that there should be a single regulator and an interoperable system to enable a level playing field.
Ndemo replied by acknowledging that the government is beginning to force telcos to share infrastructure, meaning one will be able to access their own SSID and compete in a more fair market. The government is also discussing the issue of interoperability within Kenya. Although nothing has been decided, Ndemo assured the audience that these questions of interoperability are being raised and the government is in discussion over these issues. Ndemo stated that there is a need to look at the issue in a holistic way in order to avoid rushing in and accidentally killing innovation in the country.
Another issue raised during the discussion is the current government procurement law. Presently, local companies compete at the same level as international businesses for government projects. The government needs to focus on supporting local companies to develop, showcase, and export to the world. Ndemo responded in agreement over the archaic procurement law. “We (Government) are meant to give 30% of government procurement to local firms, but that clause is still not followed currently. The current procurement law was made in anger but is now costing the local economy because we cannot give local companies preference.” The government is now reviewing the law.
Talent, training and passing the torch
The war among companies, especially tech companies, is for talent. There are not enough people from university aligned with tech products. As a result, Seven Seas developed a “Knowledge for Life” initiative (www.k4life.co.ke), where students from university are trained for free. SevenSeas then has a database of talented, trained students from which big companies (that formerly snatched SevenSeas’ newly trained employees) are able to hire new graduates rather than employees. Equity Bank and Craft Silicon are also involved in supporting tech entrepreneurs on their own and through *iHub_ and m:Lab.
The Kenyan Government is also suffering in the area of new hires. In the words of Ndemo, “we train but we cannot retain!.” Ndemo also argued that a very serious reform is needed in the Kenyan education system. The methods of teaching have changed but we still have serious problems. The government is working on a program to provide every high school child with a Netbook and is looking for partners for the program.