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Kenya: Can Nairobi’s inefficiency in business service delivery be an opportunity worth exploiting?

Written by Aimé Sindayigaya and edited by Jules Niyibizi.

Nairobi, the capital city of Kenya, has a lot of potential to become Africa’s next major business hub. Yet inefficiency in service delivery of the businesses operating in Nairobi remains a challenge. Nevertheless, tackling such inefficiency could be an entrepreneurial opportunity that can be extended to other African cities facing similar challenges.

 

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A vibrant economic city with lots of potential

 

From Jomo Kenyatta Airport, the largest aviation facility and busiest airport in Eastern Africa, and throughout Nairobi city centre an increasing number of billboards advertising different household products and services can be noticed. In theory, this could imply that the inhabitants of Nairobi have a high purchasing power. This is indisputable since a recent report issued by the African Development Bank places Kenya among African countries with a significantly fast growing middle class [1], the majority of which is certainly residing in Nairobi. Such a growing middle class is partly underpinned by the fact that Nairobi hosts many Kenyan companies and regional headquarters of foreign firms including General Electric, Young & Rubicam, Google, Cisco Systems, Airtel, and others. Several other foreign companies known worldwide such as General Motors, Coca Cola, Toyota Motors, Goodyear have also been pulled towards Nairobi.

The diverse community of people found in Nairobi is another factor making the city’s economy vibrant. In addition to established communities from India, Pakistan, Sudan and Somalia, Nairobi attracts a significant number of western and Chinese nationals. It is asserted that this diverse people rush to Nairobi to enjoy the safari’s attractions available in the city and in other parts of Kenya.  However, there is more in Nairobi today, Western and Chinese nationals come into town for business purposes as well.

What’s more, Nairobi has managed to keep a certain edge compared to other cities in Africa due to its strategic location. Most of the world’s states have embassies and high commissions in Nairobi. The main headquarters for the United Nations in Africa and Middle East and the International Finance Corporation division of the World Bank Group are based in Nairobi.  This makes Nairobi a city in which flourishing business deals could be accomplished. With that backdrop, Nairobi alone contributes over 45% of Kenya’s GDP [2] and it has recently been ranked 6th out of 19 Sub – Saharan African cities that have the highest growth potential by a survey carried out by MasterCard [3].

The challenge: Inefficiency

Despite the aforementioned and other unmentioned economic advantages and opportunities that Nairobi has and could offer, inefficiency remains an obstacle for the city.

In 2011, the International Business Machine Corporation, (IBM) through its Smart cities initiative organised a round table discussion on how Nairobi could turn into an efficient city, gathering Kenyan government, private sector, civil society and experts from the World Bank and the UN- Habitat [4]. The discussion concluded that for Nairobi to become Africa’s major business hub, inefficiency in transportation, utilities, energy, security, safety and urban planning must be tackled. However, there is another evident inefficiency in the many businesses acting as first point of contact to the diverse consumers of the city that is not addressed and that in my view needs to be dealt with as well. This is inefficiency in customer service delivery.

Last year for instance, when I travelled to Kenya, I had to wait for roughly one hour to collect my luggage at Jomo Kenyatta airport upon my arrival in Nairobi. There were no announcements made and no desk(s) available to make a claim. When I came to collect my luggage the screen was showing Kilimanjaro while I was flown from Amsterdam! Such inefficiency service delivery at the first point of entry into Nairobi ought to be tackled for the city to become a hub for Business.

As I was being driven to my hotel the taxi driver stopped at a petrol station to refill the car. Despite the prompt service received at the station to refill the car we waited for a significant time to exit the station. This was due to the fact that the car in front could not move since its driver was waiting for his balance. In a city with many cars and crammed roads such small incidents can easily create traffic congestion which is said to cost Nairobi about $500,000 a day [5].

Once I had finally arrived and settled in my hotel room, my colleagues and I decided to walk around the city and ended up in a bar at the village Market. This is East Africa’s largest Shopping Recreation and Entertainment destination [6].  There again, my colleagues and I were frustratingly waiting to be served though the bar wasn’t busy at the time. When our order finally arrived, it was not complete. The bill took even longer to arrive than the order! Customer service is a real worry.

A list of examples illustrating customer service inefficiency in businesses operating in Nairobi can be endless. I wonder what retributions such inefficiency has on Nairobi’s vision to be recognized as one of the most attractive cities of the world [7]. If Nairobi is to become an Africa business hub and maximise its growth potential, inefficiency in customer service delivery of businesses operating in the city has to be taken into consideration and tackled decisively.

Tackling the inefficiency

Enterprises are the engine of growth. They create job and generate revenue. In this sense, it is the responsibility of policy makers to ensure that entrepreneurs have funding to start their businesses and are operating within a convenient environment. This must be promoted with efficient transport, sufficient energy, security etc, as the IBM round table discussions suggested. However, it is also vital that once businesses have been established and are operating, they are supported downstream by improved service delivery so that they constantly contribute towards growing a city or a nation’s economy.

Policy makers at the Nairobi city council will have to tackle inefficiency by supporting initiatives that work directly with the affected businesses in the city. If service delivery of businesses in Nairobi were improved, these businesses would be able to exploit to the fullest the economic opportunities that the city has to offer. The consumption of Nairobi’s growing middle class will be retained and the city could attract many more consumers of Eastern Africa and possibly of other African regions too. Subsequently, this could in turn become one of the selling point for Nairobi to finally position itself as the African hub for business and also maximise its growth potential.

Arguably, most businesses in developed countries cities are efficient in terms of service delivery and customer care. These businesses have gradually achieved some sort of efficiency in service delivery by providing regular informal customer service training to its employees and developing service delivery techniques that are adapted to their customers’ changing demographic and taste. Similar trainings tailored according to the local culture and discernment of Nairobi’s social and economic environment could be applied towards promoting better service delivery within the businesses operating in the city. At the same time, businesses operating in Nairobi have to be supported towards innovating resourceful homegrown techniques that could be used to serve efficiently local consumers that also match with their needs.

Inefficiency in service delivery is evident and systemic in businesses established in many cities of Africa and it has yet to be decisively tackled.  Moreover, Africa has a fast growing middle class, the majority of which lives in urban area of Africa that will become more sophisticated and specific in terms of how they would like to be catered. Therefore, it is feasible that from tackling inefficiency in the service delivery of businesses operating in a great city such as Nairobi, the model could be extended to other businesses operating in many cities of Africa. There is no doubt, working throughout improving the service delivery of businesses operating in African cities could present a commercial opportunity.

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[1] http://www.afdb.org/fileadmin/uploads/afdb/Documents/Publications
[2] http://www.unhabitat.org/content.asp?cid=4219&catid=206&typeid=13
[3] http://newsroom.mastercard.com/press-releases/mastercard-study-reveals-african-cities-economic-growth-potential/
[4] < a href=”http://www-05.ibm.com/za/office/pdf/IBM_-_A_Vision_of_a_Smarter_City_-_Nairobi.pdf”>http://www-05.ibm.com/za/office/pdf/IBM_-_A_Vision_of_a_Smarter_City_-_Nairobi.pdf
[5] http://citizenibm.com/2012/08/laying-the-foundation-for-nairobi%E2%80%99s-%E2%80%93-and-kenya%E2%80%99s-%E2%80%93-economic-growth.html
[6] http://www.villagemarket-kenya.com/about.php?id=19
[7] http://www.nairobicity.go.ke/

Insightful Quotient is a website that encourages debates on how to achieve sustainable development in developing countries using an intercultural cooperation. Therefore, we welcome your insightful arguments that provide scrutiny and ideas that can elaborate further the analysis and suggestions detailed in this article.

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