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The 3 Reasons Why Kenya is Beating Nigeria in Internet Business Opportunities

By Wayan Vota on March 15, 2010

I was IM’ing with Possicon this weekend about the difference between online business opportunities in Nigeria and Kenya. We both agreed that Nigeria could and should be beating Kenya in Internet businesses, but its not.

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Both Kenya and Nigeria have many problems. But I think there are 3 main reasons why Kenya is pulling ahead of Nigeria, even though its a much smaller country:

1. Safaricom

It may not be the best mobile phone provider in Africa, but its certainly one of the most innovative and is pushing Internet access aggressively across the country with 3G data services and subsidized netbooks.

Nigeria may have more mobile phone players, and cheaper voice rates, but their 3G data services are no where near the quality and reach of Safaricom.

Glo 1 landing in Nigeria

2. Seacom & Teams

The East African bandwidth bonanza cannot be underestimated. With two huge fiber optic cables landing in Kenya, and it serving as a backbone for Uganda and Rwanda, Kenyans now have an unprecedented position to drive Internet adoption across East Africa.

Nigeria’s telcom sector is years behind. Yes, the Glo cable is coming, but with the current restrictive regulation, I bet it will still be cheaper for Nigerian companies to buy bandwidth microwaved over from Benin.

3. Kenya Power & Lighting

Say what you will about last year’s blackout, KPLC is pretty reliable as a power company, especially when compared with its peers. And anything digital or Internet needs constant, reliable electrical power.

No one would call Nigeria’s National Electric Power Authority anything but useless. Not when it generates a new national anthem on daily basis.

Rise Up Nigeria!

These may be the 3 reasons why Kenya is leading now, but don’t think that they will always be ahead. Possicon and I both also agree that Nigeria could overtake Kenya at any time, if it focused, if Nigerians themselves, and Nigerian business were serious about tapping the Nigerian Internet goldmine.

May 2010 be the year Nigerians wake up – or risk getting passed by.

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Written by
Wayan Vota co-founded ICTworks and is the Digital Health Director at IntraHealth International. He also co-founded Technology Salon, MERL Tech, ICTforAg, ICT4Djobs, ICT4Drinks, JadedAid, Kurante, OLPC News and a few other things. Opinions expressed here are his own and do not reflect the position of IntraHealth International or other ICTWorks sponsors.
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16 Comments to “The 3 Reasons Why Kenya is Beating Nigeria in Internet Business Opportunities”

  1. Loy Okezie says:

    Hi Wayan,

    I admire your interest in the the African internet/telecoms space, but it seems to me that some of your opinions are based on assumptions.

    “Nigeria’s telcom sector is years behind”????

    I think it’s too early to say that Kenya is beating/leading Nigeria in Internet Business Opportunities.

    My question is: How would you describe a country that is leading in “internet business opportunities”?

  2. Dej says:

    Hello,
    I have been trying to kickstart this debate, but I’m glad to see it happening somewhere. I agree with the concept, but I disagree with reasons. Connectivity is a key to adoption, but not a key to innovation. We have in excess of 10 million Nigerian’s online but a significant number of our web solutions are somewhat frivolous. I have raised the question why are east coast startups focused on products that focus on improving the quality of life of people (gotissuez, ushahidi,for instance), focus on wider technological platforms (Africa’s first iphone apps came from the east and include games) while in Nigeria we keep launching twitter clones and facebook wannabes (Kukurouku, gistcaster, etc)?

    Obviously, these are generalisations (I mean, the first African web API I’ve heard of is Nigerian), but there definitely is a trend. I will definitely need to explore this in a blog post, but I would still love a live debate on a platform like Google Wave or SnapGroups.

  3. possicon says:

    Nigerian Internet Industry is a goldmine no doubt, and I will not in anyway want to side this time but as far as I want to believe; the key things that delivers growth or competitiveness so to speak are;

    1. Market
    2. Innovation (driven by competence)
    3. Policy and commitment
    4. Community

    1. Nigeria has the market, over 11 million internet users and more than 70million active phone lines. In the telecom sector, I think am sick of promo-driven strategies to acquire user base but this never want to seize in our market. Their are many more solutions that can be deployed on mobile than we currently are doing. I have spoken with a lot of guys and indeed their effort are commendable and soonest you shall see their innovation but for now… we are asking for more….

    2. Coming to innovation; I have yet to review some sites because largely i want to see something difference they’ve got! What problem it comes to solve, or if its a replication of others, what local application does it have?

    3. Policy and commitment: We need to be realistic with ourselves we don’t have Technology 2.0 (if I may qualify it with that) centric policies from the government neither do we have implemented roadmaps generated from various fora. I’m not a government proponent or dependent on government but believe me, government impact is very crucial in our current setting. Private sector now has the responsibility to shift the goal post.

    4. Community: this is key to development! the power of a whole is much more than the sum of its parts. Yea! our internet community is not vibrant but I believe that growth we have witness in last 3 years is remarkable. I also believe that if things have never been built, build it! which is why some of my efforts to join other in making that happen through participation in various events. Check out iHub in Kenya, it’s lovely!

    All things being equal, Nigeria still has a bigger market than kenya but you know, you can either be a sleeping giant or a true giant. When people compare Nigeria with Kenya, what I try to look at is not the face value of the words… but the reality of what we should have done with what we have. And that is the questions I want us all to find an answer to…? is this what we really are capable of doing? what can we do to move forward? They say we are empty… how can we fill our tanks…? these questions never stops popping up in my head and am dedicated to finding the answer…. join me!

    Will do a longer post on this to capture my picture!

  4. Wayan Vota says:

    Loy,

    I agree that Nigeria could be the market leader – but right now its not. Its asleep. Kenya has taken the lead.

    How do I know this? I work at getting ICT to Kenyans, Nigerians – Africans in 20+ countries, and none is moving as fast as Kenya. Ghana is a close second, but Nigeria….? If only! I wish for her to be leading – she should be right?

    Yet 1/8th of Africa is dreaming, while Kenya is living, large.

  5. Oluniyi Ajao says:

    Could someone provide evidence as to Kenya taking the lead?
    I shared my thoughts here when the spam filter on this blog kep blocking me out:
    http://www.davidajao.com/blog/2010/03/15/is-kenya-beating-nigeria-in-internet-business-opportunities/

  6. Wayan Vota says:

    I’ll let the CIA factbook speak for me. Nigeria is 68 spots behind Kenya – its #158 vs. #90 for Kenya: Country Comparison – Internet hosts

  7. Francis says:

    I think is quite clear why they should have an edge – Kenya could do more and far more. if Nigeria did not wake up. How can you talk about internet when there is no electricity supply?

  8. Kayode Muyibi says:

    I have came across a few amazing kenyan dotcom startups in terms of look and feel, but I am not sure whether they actually play an important role in the kenyan market. Do they actually have a flourishing biz or service for kenyans that beat their counterparts in Nigeria? And is that the basis of this argument?

    In Nigeria, there are a few small internet biz with more than 60k USD a year in revenue and some even make more than 100k USD a year in revenue. I am not talking about forums, or blogs, but actual online businesses with a Nigerian paying customer base.

    So I do not quiet understand the argument regarding Nigerian startups been “whooped” by Kenyan startups.

    Regarding Internet penetration, I think there are more educated Nigerians online in ratio to the number of educated kenyans online. I might be wrong, but Kenya and Nigeria? What a comparison.

  9. Anony says:

    Is it not obvious that kenya will beat nigeria and lets not forget that ghana is still enjoying there electricity while average nigerian lives on $2 daily basis, remember unless regulation and constitution is been practiced in nigeria other african nation will lead while those loggerhead that called themselves senator,ministers enjoy the vast wealth for themselves……………and i said to most people the that abdul mutalab did not think of aso rock if his looking to die, invite them for dinner if they refuse to make sure companies put proper dish and satellite stations where appropriate……………thats i will say for now.

  10. Wayan Vota says:

    Kayode,

    Here are a few links on the Kenyan Internet business opportunity level from Moses Kemibaro:

    Top 10 Kenyan Websites
    Kenyan Internet usage patterns
    15 years of Kenyan Internet history

  11. Wayan Vota says:

    Loy,

    Here’s a great example of why I feel that Kenya is in the lead. Safaricom has partnered with local banks to make Internet-connected netbooks affordable to wananchi – the common Kenyan:

    Safaricom and KCB partner for “Laptops for All”.

    For Kes. 2,735.00 per month over 12 months, you get a netbook with a free 3G modem and 40MB of free data. Where is a deal like this in Nigeria?

  12. Wayan Vota says:

    Anony,

    I disagree with your blame. Nigeria has problems with its government for sure. But so does Kenya. The whole country rioted during the last election, and they still can’t figure out who really has governmental power (sound familiar?). And Kenyan MP’s are the highest paid in Africa (yes, even more than Nigeria).

    I call on the people, the business of Nigeria to rise up and make opportunities, regardless of the governmental mess.

  13. kartel says:

    kenyan is made up of very few number of citizens but they are very hard working and very innovative….most of the points mentioned above are based on facts not fictions. these are brains from kenya who are creating and developing all this technology i just came across this site i belive this is one of the best site in kenya and i have not seen any site like this Nigeria is any please let us know…..
    this is the kenyan site have a look….http://www.webstar.co.ke

  14. Dej says:

    I wouldn’t join an argument about who leads in terms of revenue or spread or even on technical quality. I would definitely join issues in terms of life-enriching value to people. We need more of those types of products on both coasts and I seem to hear about more of those on the east coast.

  15. Anonymous says:

    Your words:” In Nigeria, there are a few small internet biz with more than 60k USD a year in revenue and some even make more than 100k USD a year in revenue ” , Please can u give example of such business in nigeria . To truely support your point

  16. BUKOLA AFARIOGUN says:

    Mr kayode ,your words:” In Nigeria, there are a few small internet biz with more than 60k USD a year in revenue and some even make more than 100k USD a year in revenue ” , Please can u give example of such business in nigeria . To truely support your point