AfDB outlines opportunities, hurdles facing IT startups

ICT enthusiasts at the iHub lab at Bishop Magua Plaza on Ngong Road, Nairobi. FILE 

By OKUTTAH MARK

A new report by African Development Bank (AfDB) has singled out inadequate financing, high cost of doing business, capacity development and skills shortage as some of the challenges facing IT start-ups in the country.

The report unveiled by ICT secretary Fred Matiang’i on Thursday analyses the sector’s innovation and start-up culture and proposes measures that would assist to scale up commercialisation of innovations, among other things.

“Kenya produces about 250,000 high school and 30,000 university graduates yearly, but only an estimated 5,000 have the requisite skills for immediate employment in ICT (including BPO).”

The study also focuses on ICT solutions developed by Kenyan firms.

The ICT sector infrastructure in the country is also examined in the report.

“Many potential entrepreneurs have poor business planning skills, suggesting that even if they obtained funding they would also face management and marketing challenges,” reads part of the report.

Strategic advance

The study, which provides a platform for understanding the importance and contribution of the ICT sector to Kenya’s economy, also singles out the high cost  electricity, expensive rent and weak laws, and regulations in the building sector as some of the constrains slowing down investment.

“Konza Techno City, if carried out successfully, will provide a strategic advance. But to sustain its position as one of Africa’s top ICT hubs... Kenya needs to address the many challenges it faces,” says the report.

“Besides ICT infrastructure itself, the cost and reliability of electricity must be addressed, and transport infrastructure must be improved.”

The study argues that the challenges offer opportunities to the country and its development partners, including AfDB, to support and sustain ICT innovations in the country.