Partnerships for Growth

Last week, we welcomed at IESE a group of top executives from Kenya. They are participants in the Advanced Management Program (AMP) at Strathmore Business School. A one-week module at IESE is part of this program. I had the opportunity to share with them two sessions about alliances and acquisitions as external growth options for a company. I was happy that later in the week the Ambassador of Kenya in Spain highlighted partnerships as one important way to move business forward. So, which are the opportunities for growth in Kenya?

IESE Kenya
The Embassador of Kenya in Spain during a networking event at IESE

Kenya is one of the countries in sub-Saharan Africa (SSA) that is growing. Before going into the specifics of the country, let’s take a look at the bigger picture of SSA.

The International Monetary Fund (IMF) released recently their latest forecasts of GDP growth. The forecast for the SSA region is 1.4% for 2016 (2 percentage points less than in 2015), and 2.9% for 2017 (still below the 2015 figure). As we all know, averages unmask diverse realities. The average for SSA is driven by the sharp slowdown in the largest SSA economies: Nigeria, South Africa, and Angola. However, other countries – including Kenya – are experiencing healthy growth rates. These are the figures:

Forecasts IMF
*Note: Projection. Figures in %. Source: IMF World Economic Outlook (WEO), October 2016.

Kenya shows good prospects. Private consumption grew at an average rate of 6.3% in the last 5 years, and investment at 14.1%. One of the AMP participants highlighted the growth of the manufacturing sector: it accounts for 10.3% of Kenya’s GDP, and 12.7% of total GDP growth.* But again, we need to take a finer-grained look at the various sub-sectors:

Source: Kenya National Bureau of Statistics

Many opportunities for local and foreign to partner and seek growth for mutual and societal benefit, don’t you think?

* Data source: Kenya National Bureau of Statistics



4 thoughts on “Partnerships for Growth

  1. Quite impressive to read about your work with students from SBS, Africa! Agree, the IMF economic projection for Kenya is quite promising. Hopefully, the public and private sector will take this opportunity and ensure that the common person on the street benefits as well!

    Salaam, Aloys

    1. I also hope that there will be not just economic growth but socioeconomic development. The group of Kenyan top-level executives that came to IESE last week along with other strong business leaders have an important role to play in this.

  2. A dramatic decrease in unemployment is a global necessity, but nowhere more so than in Africa.
    And that will only be a result of 95% of startups succeeding, instead of the current 5%.
    The tragic thing is that the keys to this turnaround exist, as you know. Our passion is to persuade developmental agencies to roll out this knowledge to SME’s in a patient but dramatic manner, because the entrepreneur starting out is not a viable direct client for businesses such as ours.

    1. Thanks for sharing your views, Julius. In my opinion, companies have a more important role to play than developmental agencies. Partnership that bring mutual benefits to both local and foreign companies can help growing business and employment.

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