I have spent the last week in Kenya and will be back here next month as part of some work for my company. While I have been here  only for a week I have seen what a supportive government policy can do to foster economic growth, especially when I compare it to South Africa.

Price War!

In Kenya call rates have dropped to 30c (ZAR) per minute and an sms can be sent at a mere 10c (ZAR) per message. Comparing that to the rates in South Africa, were we get charged 120c (ZAR) for calls and 75c (ZAR) for an sms, it is obvious that we are being robbed. 

Kenya's policies have created a competitive environment, which has started a war which benefits people, rather than the ones we are more used to in Africa. See this article for a brief overview of the current price war.

The dropping of call and data costs has opened up a whole new market for mobile applications and services that simply did not exist before! Mobile development is really taking off in Kenya as this competition shows.

Mobile Banking  - Banking the Unbanked

Along with government support for lower prices and more competition, the Kenyan government also seems central in getting financial services to the majority of its people by enabling the M-Kesho solution. The providers claim they are signing up 8000 new accounts per day. Compare that to the failed attempt at the Mzansi accounts in SA.

Cause of the Problems

Now it might be that I am ascribing too much credit to the Kenyan government here, and I am sure someone will put me right if this is the case, but it does seem that the South African government is failing to create the same environment and opportunities as other governments in Africa.  

One of the big problems in South Africa too, is the oligopolistic nature of our economy. We have a few companies that dominate the market. (In SA we have about 4-6 banks while Kenya has over 24 and so does Ghana. SA is the biggest economy on Africa.)

All of these companies complain bitterly that they are competing "tooth-and-nail" for business when they are accused of providing, sometime shoddy, services as high price.  The fact is they are not competing on price and seldom on other aspects such as customer service. Of course they claim their costs necessitate their prices but either they are fat, bloated and inefficient or they are just lying, probably both.

I know what I do with fat,bloated and inefficient software that I am overcharged for. I wish I could do the same with my bank and cell phone provider.