Spend Matters Chairs Procurement Conference in Africa (Part 3)

I am at the East Africa Procurement Summit 2013, a 3-day procurement conference held in Nairobi, Kenya. In my last post, I wrote about the Kenyans’ eagerness for ethical procurement practices.

Kenya is clearly a poor country with pockets of wealth – but the same can be said for many Asian tigers. To my (pleasant) surprise, many of the Africans at the conference were up to speed with modern technologies, with a handful of firms running SAP or Oracle. I also came across one company using Ariba. This might be a sign of leap-frogging technology, just as the developing countries in Asia don’t have to contend with legacy hardware and software and can jump to the gleaming front of the technology line, while being surrounded by streets with potholes.

Another strength for Kenya – from the perspective of foreign investors – is the absence of onerous rules around local equity partners, local employee count, local management and other restrictions that can make it difficult to own and operate a subsidiary. This has likely contributed strongly toward attracting so many financial firms (all British banks seem to be here – as well as Citigroup) and of course the many charitable support or aid organizations that have regional headquarters in Kenya.

Several attendees had worked for multi-nationals in the past. One particularly impressive individual had spent time with Chinese communication equipment giant Huawei, where he had clearly picked up a best practice understanding. In other words, you can find solid talent in Kenya. Not only are the Chinese active in Kenya, Indians have also gained a noticeable presence. They are moving to establish themselves in the supermarket space, not only in Kenya but throughout southeast Africa.

The maturity of the market seen from a solution provider perspective is nascent. Opportunity to launch a company delivering business network, sourcing suite, supplier management, GPO contracting, or related procurement services seems high, and even P2P should be workable considering the high penetration of smartphones. The IT firms here are more focused on basic hardware services. Let’s see who among the western solution providers will be inspired to open an office over here!

Exploring downtown Nairobi, I got the impression that people head home quite late. There were numerous buses idling everywhere, with diesel fumes fairly thick at times. Walking around was quite uneventful, and not much attention was paid to me, though I was absolutely the only Caucasian around as I walked the quite crowded streets.  I’ve enjoyed my time here, with the friendly people and a fantastic climate. Let’s hope that the current election challenge plays out peacefully; their political issues seem to be the only cloud on the horizon.

Kenyan politics are more tribal than anything else. The voting pattern is heavily influenced by tribal affiliation and the president-elect is from the largest tribe. Some attendees here told me that they are of a mixed ethnicity, which means coming from multiple tribes. Their “mixed” status can still haunt them in employment hiring and promotions, where people favor their own tribe. This puts race relations in the US in an interesting light.

In my next post, I will share more details on the conference.

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