It is a significant achievement for the Kenyan capital to achieve ‘Top 10’ status in JLL’s annual City Momentum Index. The only African city on the shortlist is an important indicator of Nairobi’s position as a major urban hub on the continent.
Technology and innovation continue to be the major driver behind the city’s growth momentum, and the reason for its shift up the ranking from number 11 in 2016.
Dubbed the ‘Silicon Savannah’ of the developing world, Nairobi has spent much of the past decade successfully reinventing itself as a technology epicentre. It was in July 2009 that the Kenyan Government backed the installation of four fibre optic cables in Nairobi, introducing faster, cheaper internet connectivity. It was a move that inspired a mobile revolution in the city.
A necessary intervention
The government initiative to enter the digital age has been embraced by a young, well-educated and tech-savvy population who have quickly positioned Nairobi as a market for digital entrepreneurs. By applying a typically Kenyan approach to business – find creative solutions to daily hassles – several smart apps are transforming lifestyles across the country.
M-PESA, the mobile money platform at the heart of Silicon Savannah, is acclaimed globally for its success. M-PESA has been credited with introducing the digital economy to a largely unbanked population. Statistics indicate 31% of Kenya’s GDP is processed through M-PESA and it’s reported that it is easier to pay taxi fares by mobile phone in Nairobi than it is in New York! The digital system has inspired and enabled numerous other start-ups.
M-Farm, for instance, provides farmers with real time market prices, giving them negotiating power to achieve fairer pricing. Also in the agricultural sector is I-Cow, an app aimed at boosting productivity for small scale dairy farmers. These are among a host of local tech upstarts incubated in Nairobi’s iHUB, a nucleus for tech investment. The tech buzz has attracted the presence of global technology companies like Google, Intel, Microsoft and IBM, with IBM opening its first research centre on the continent in Nairobi.
This is good news from a commercial real estate perspective. Nairobi as a regional hub for multinational enterprises keen to increase exposure in Africa, boosting demand for office space, especially in the Grade A market.
Future proofing growth in the innovation space
A poor power supply could stunt potential growth in the ICT sector. For instance, only 32% of the population is connected to the main power grid, a constraining environment for technology penetration. Government investment in a supportive infrastructure is critical to safeguard continued acceleration. Resourceful innovation around these problems (like solar lanterns to charge mobile phones) is not enough. Ongoing intervention to increase electricity supply is a step in the right direction.
It may be an upward climb but the fact is that the city is evolving. With sustained investment in the infrastructure of growth, combined with that Kenyan entrepreneurial spirit, Nairobi will continue to lead the way as one of Africa’s most dynamic cities.
Find out about how Nairobi compares to the rest of the world in JLL’s fourth annual City Momentum Index