Archives for posts with tag: Nairobi

I’ve always wondered how thousands of cab drivers organize themselves in a chaotic place like the Nairobi Central Business District. So I did a small research on my own. The sample size is 1, David my awesome cab-driver.

The story is that if you want to be a cab driver anywhere in town you must become a member of the taxi-drivers association in charge of that area. The association where David works controls the Nakumatt Lifestyle area, the Tuskys Supermarket area (that’s where David is always parked) and the street in front of Uchumi supermarket. Membership comes at a cost of 5000 KSh per year (about $60).

For the first three years, you are obliged to rent a car from the association at a fixed cost of 1500KSh per day (about $20) and a variable cost based on mileage. You cannot own the car you use for work. This means that some rental cars are available only at night time, others only during the day time. David prefers the daytime shift but for more than two years he was forced to work at night -all the cars were already taken during the day. Only a couple of months ago he was able to change, but he says that “traffic is horrible” during the day.  So sometimes he works both day and night.

If you’ve been loyal to the association, after three years you become a senior member  and you’re allowed to buy your own car. The cost for a car in Kenya is very high – second hand cars go from KSh 400,000 to 600.000 (about $5000 to $7000). And that is for a 10-years old basic model. You can easily spend KSh 1 million ($12,000) if you want a slightly newer or fancier car. If you own more than one car, you can rent one of them to the association’s junior members.

Owning your car instead of renting it means higher profits, as well as higher risks and maintenance costs. Most people would rather own their vehicle anyway, but only a few are able to obtain a bank loan or borrow from family or friends. David will become a senior member in 6 months and his plan is apply for a loan at Equity bank and buy a Toyota for about KSh 450,00. He says that Toyota cars never break and spare parts are cheaper and easier to find in Nairobi. His main worry is that he’ll get carjacked again.

Konza Technological City

After Tatu city –a multi-million real-estate project to build a satellite town in the outskirt of Nairobi, the Government of Kenya has planned a new mega-project called Konza Technological City, already dubbed “African’s Silicon Savannah”, which is supposed to become the largest hub for high-tech and ICT firms in Africa.

The government bought a large piece of unused land in Machakos county, about 60 kilometres south of Nairobi, with the plan of investing $200 million in basic infrastructure (sewage, roads, electricity, etc); the rest of the investment should come from the private sector through public-private partnerships. There’s nothing official yet, but it looks like Boeing, Fedex, Huawei, RiM and Samsung are already lining up in the project. The main Kenyan interest is coming from Safaricom, Wananchi Group, the University of Nairobi and Jomo Kenyatta University for Agriculture and Technology among others. According to the promoters of this project, Konza will create 20.000 skilled jobs in the next 3 years, 200.000 by 2030.

Of course there’s great excitement all over Kenya. I was in a restaurant in downtown Nairobi yesterday and I noticed that most tables around me were talking about it. Though, thrill was mixed with a good dose of skepticism  I wondered myself: is this really going to work out?

To some extent, it looks like the government is playing Sim City, a popular video-game where you build cities from scratch. You have a budget, you start building roads, power-plants, water and sewage systems and you assign different areas of your city to industrial plants, commercial activities or residential houses. But the difference is that in Sim City you start with small projects and eventually, if you are successful, you expand them. Konza seems to be the product of a grand-design, a city where everything is pre-planned, and nothing is supposed to evolve through trial-and-error. There will be no space to figure out what works and what doesn’t.  It either goes the way that planners have in mind, or it will just be a great failure.

This reminds of the debate on charter cities. The main difference is that Konza will not be managed by foreign governments, with foreign rules and foreign institutions, so unlike charter cities Konza will not revamp any memories of colonialism. On the other hand, just like charter cities, I’m not sure whether cities with no history can grow out of nothing.

In one of my favorite articles on urban development, Edward Glaeser shows the development of New York since the early 19th century. The city grew thanks to an endless sequence of innovative ideas and entrepreneurialism, none of it happened because of a grand scheme. I recommend reading the whole article, but if you don’t have time, Glaeser basically shows how (1) New York initially developed due to a natural and geographic advantage; (2) it grew when an entrepreneur changed the logistics of trans-Atlantic trade; (3) increased trade helped the development of the sugar refining industry, apparel manufacturing and printing.(4) The economy eventually turned into real estate and the garment industry and  finally, (5) the finance sector boomed.

This is a terrible summary of a great article. But the point is that the development of the city did not follow a straight line. The face of the city and its economy changed completely over a relatively short period of time. Of course Konza is not New York, but I do not think that the dynamics of urban development are so different. Just like New York, Konza will not succeed unless it develops gradually through entrepreneurialism and innovative ideas. A small push from the government will be helpful; having bureaucrats playing a real-life version of Sim City will end up in certain failure.

But let me get back to the restaurant conversations I overheard yesterday. What was the skepticism about?

Criticism of Nairobians did not involve Edward Glaeser, New York or Sim City –It was much more practical. The most common points were rather spot on:

  • Konza city is ultimately a real estate project, not a technology one. The real goal is to increase the value of the land
  • Most businesses interested in the project are not Kenyan, what about the plan to promote local entrepreneurship?
  • Corruption will be all over the project.
  • How do you get thousands of skilled workers and their families to move from Nairobi to Konza? Customers will not move to Konza as well. Logistics will be an issue, especially for smaller businesses.

These are all interesting points, and a lot of food for thought.

I warmly recommend you to read Urban Zoning, a short-story by Kenyan writer Billy Kahora, finalist at the Caine Prize for African Writing. It is about Kandle, a man with alcohol problems, working for a bank, and living a hectic life in downtown Nairobi. A small excerpt:

Stripping in public, cutting one’s palm, thinking you were Knight Rider—these were, to Kandle, examples of letting the Bad Zone overwhelm you. One had to keep the alcohol levels intact to stay in the Good Zone, where one was allowed all the wishful thinking in one’s miserable life. The Bad Zone was the place of all fears, worries, hatreds, and anxieties.

Wonderfully written and fast-paced. Full story is here (pdf).