Can Kenya truly compete in the global market? According to ICT Principal Secretary John Tanui, Kenya is rapidly becoming the digital gateway to Eastern and Central Africa.
He referred to the
world-class submarine cable connectivity, growing data centre capacity and a
government that is heavily committed
to creating the right conditions for global tech investment.
The data supports his assessment. Kenya is now positioned to be a major player in the global outsourcing market. But there are still some major gaps that need to be addressed.
Kenya is getting some attention currently, but can it convert that attention into decisive action by foreign investors? These companies are evaluating Kenya on more than a few recent improvements alone; they are assessing stability and long-term factors to know if this is just hype or a legitimate opportunity. They will ultimately base their decision on facts and data that point to a secure and good investment.
The Ataraxis Global Outsourcing Index, which tracks 193 countries and compares them across labour costs, English language skills, talent depth, digital infrastructure and business stability, recently ranked Kenya #11 of 193.
Looking at the data it’s easy to see why Kenya scored so highly. With a composite score of 81.625 out of 100, Kenya is in the top six per cent in the world as an outsourcing location. Kenya is third in Africa for English proficiency and 19th globally. Labour costs are significantly lower than most of the Western world, including every European country and every North American country, making Kenya a prime candidate for foreign investors.
Digital infrastructure is also improving and moving in the right direction. As PS Tanui noted, Kenya already hosts multiple world-class data centres, including IXAfrica, Africa Data Centres and the Konza National Data Centre.
Kenya also benefits from more than eight international submarine cables landing in Mombasa, creating a level of connectivity redundancy and lower latency that regional competitors cannot match. Major global corporations, like Oracle, have confirmed plans to establish a cloud region in Kenya, which is a very strong indicator of foreign interest and opportunity in the future.
So, what is holding Kenya back from the global top five?
Kenya’s top competitors have been in the space for much longer and have already established strong environments that support global outsourcing. The Philippines (#1) and Malaysia (#2) have been key players in the market for decades and throughout their countries have strong digital infrastructure that surpass Kenya’s. India, the #3 country, ties Kenya in the area of digital infrastructure, showcasing that while a score of 50 leaves much to be desired, small changes can place Kenya easily within the top 5 outsourcing destinations.
Currently, Kenya’s strengths are highly concentrated. Nairobi’s Westlands and Kilimani district are genuinely world-class environments for digital business but it is not the same throughout the country. Outside of those areas connectivity and power reliability can be unstable enough to give pause to corporate procurement teams.
This is why the government’s current investment agenda matters tremendously. The state’s commitments to building 1,450 digital hubs across every single ward, expanding terrestrial fibre and aggressively growing the data centre ecosystem are building the future for Kenya.
Every ward equipped with reliable, high-speed fibre internet is another community that can actively participate in the global digital economy. PS Tanui has spoken boldly about growing Kenya’s digital economy from its current $7 billion to an impressive $100 billion by 2035. That target is incredibly ambitious. But when considering Kenya’s position above other countries in the ranking, it’s easy to see it is not an outlandish goal.
The one factor that will limit Kenya’s opportunity to seize this future is its speed of implementation.
The global outsourcing market moves incredibly fast and changes quickly as nations adjust policies, court foreign investors or introduce measures that accelerate or hinder growth. It’s an ebb and flow of movement constantly. Many other nations have their eyes on the same prize and are also working to improve their weaknesses to attract investments from global corporations.
The question isn’t whether Kenya has the potential to become a top-five global outsourcing destination, but whether Kenya will move fast enough to claim it. With so many other nations across Africa and the globe chasing the exact same digital dollars, the global rankings will look very different in a year or two.
Whether Kenya climbs into the top five or drops down the ladder depends entirely on its speed today. If Kenya gets this right, it won’t just be a win for its economic statistics; it will permanently transform the lives of millions of young Kenyans by connecting local talent to global wealth.
Co-founder and head of partnerships at Ataraxis
