Kenyan Stock Debut Indicates Growth of Mobile Tech Industry

Safaricom—Kenya’s largest mobile phone network and East Africa’s most profitable firm—made an impressive debut on the stock market this week. Soaring nearly 50 percent on its first day, shares ended trading at 7 Kenyan shillings after reaching a high of 8 shillings. Analysts point to the importance of renewed “investor appetite” in the Kenyan economy after months of grueling post-election violence. But Safaricom’s successful debut brings to my attention the potential growth of digital connections across the African continent. Kenya is at the lead of the fastest growing mobile phone market in the world, as use in Africa has increased at an average annual rate of 65 percent. Although only one-third of Kenyans own mobile devices, providers are beginning to target new customer bases, such as low-income citizens.

In many respects, the increase in use can be traced to local entrepreneurs, who have taken advantage of innovative mobile phone technology. Kenyans use mobile phones not only as a device for voice communication, but also for a multitude of daily tasks. For example, a free (and popular) Safaricom service entitled M Pesa allows users to transfer money electronically. This allows many Kenyans to transfer money to family members, especially those residing in rural provinces. Moreover, mobile telephony has found a place in the agriculture and fishing industries, as workers are able to find information on pricing and potential buyers using their mobile phones.

There is undoubtedly much room for growth in mobile technology industries in Africa. The market is far from saturated, but is certainly growing across the continent and in other parts of the developing world. The energy with which Kenyans rushed to buy stock in Safaricom suggests to me that East Africans are looking for a share of the industry’s future. Investor confidence only bolsters claims that digital communication has grabbed hold of Africa and will continue to play a part in its development.

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