It seems like the United States has picked Kenya as its bride in Africa. Joe Biden has anointed the East African country as a major non-NATO ally: “President Joe Biden announced plans to designate Kenya as a major non-NATO ally during a state visit by Kenyan President William Ruto. This move, which requires Congressional approval, marks Kenya as the first sub-Saharan African country to receive this designation”
As that was happening, Microsoft and G42 came with a truckload of cash, planning to invest $1 billion: “Microsoft Corp. and G42 have unveiled a comprehensive digital investment package for Kenya. This groundbreaking initiative, announced on Wednesday, signifies a monumental leap toward transforming Kenya into a digital powerhouse. As part of this ambitious endeavor, an initial investment of $1 billion will be funneled into various components outlined in the comprehensive package, in collaboration with the Republic of Kenya’s Ministry of Information, Communications, and the Digital Economy.”
Yes, that same Microsoft which froze its Nigerian design center. To all the commenters who argued that Microsoft was leaving Africa, this is your response: Microsoft is doubling down in Africa but it has selected places for the production of its services. Nigeria will remain one of the core consumption centers.
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Good People, China wants Kenya, Russia wants Kenya, and the United States wants Kenya – and today, Kenya is the bride. To have a great marriage, Kenya must clearly define what it wants. I like what it is telling Microsoft – build these things in Kenya to serve East Africa and Africa. South Africa recently got Amazon to do everything there.
Nigeria must respond by getting Tesla, Nvidia and Apple…lol. Seriously, if Nigeria gets into the African free trade agreement in its spirit, welfare losses will increase in Nigeria because across many indicators, these countries have better comparative advantages on making things than us.
I cautioned Nigeria in 2018 why we must strengthen the “rule of origin” clause: “Nigeria should SIGN but must make sure the “rule of origin” clause is strong”, understanding that Nigerian leaders do not make business fun. Yes, even TotalEnergies has selected Angola over Nigeria for its $6 billion investment because in Nigeria, the pot is always hot. We must change our attitude.
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Comment: You’re absolutely right about Kenya being a hot prospect in Africa right now. The US designation, Microsoft’s investment, it all paints a picture of a blossoming tech hub.
Here’s where things get interesting: Nigeria’s situation. While Kenya attracts these big investments, Nigeria seems stuck in a consumption role.
I agree, getting the likes of Tesla and Apple would be a massive win. But realistically, Nigeria needs a two-pronged approach:
- Attract investment by improving the business environment. The “pot is always hot” comment hits the nail on the head. Streamlining regulations, improving infrastructure, and making things easier for companies will be key.
- Leverage the African free trade agreement strategically. A strong “rule of origin” clause, as you mentioned, is crucial. It ensures goods truly made in Nigeria benefit from the agreement.
South Africa’s success with Amazon shows it’s possible to become a production hub within Africa. Nigeria has the potential, but it needs to address those business climate issues.
Maybe then, the “bride” role won’t be the only option for African countries. They can all become magnets for investment and production, creating a more balanced and thriving tech ecosystem across the continent.
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Nigeria by virtue of its size, population and number of graduates it produces, should ordinarily make it natural destination for all the key investments coming to Africa. The likes of Brazil, India, play similar role in their regions, but when it gets here, so many things are inverted. Nigeria does not want to compete, it just has the entitlement mentality that with its size, everyone should be rushing after it. This unfounded arrogance often shapes our laws and how they are implemented, and we have abundance of creatures who are always ready to defend the weirdest things.
In Nigeria, you also have a challenge of where your business must be sited, you may find a suitable location let’s say in Delta, but the officials you meet in Abuja will tell you to look for a place in Lagos or Abuja. There are many unexplained things that go on behind the scenes in Nigeria, but until you get involved in stuff, you might never know what often plays out. You also have a challenge of ridiculous settlements, in a country that is in desperate need of investment. When you are extremely proud in your poor or mediocre state, you are either a Nigeria or Nigerian.
Nothing is a given in life, you have to constantly show why you deserve the best things.