Safaricom – Building The Kenyan Economy In More Than Just Taxes

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Safaricom last month announced its 38.1 Billion shillings profit financial results for the year ending March 2016 and as has been the tradition over the years, things are getting bigger and better not just for the company, but for the economy as a result.

With 24.41 million subscribers in the country, the sheer size and profitability of Safaricom has benefited the economy in more ways than just injecting taxes. Not that the taxes were small change. The company is the largest profit generator in the East African region and earned the Kenyan government Sh28.31 billion. This was Sh17.66 billion in taxes and Sh10.66 billion in dividends.

To maintain the all-round workability of the telecommunication sector as a whole and a behemoth like Safaricom, a lot has to be going on below the surface. Lots of foot soldiers are needed in different capacities to keep the fire burning and the good thing is that these foot soldiers get opportunities and jobs in the process. Not necessarily at Safaricom offices, but solely as a result of the existence of the company. This creation of jobs and opportunities cannot be overlooked as a major contributor to the Kenyan economy.

The need for communication and money transfer has since undoubtedly been made clear as is evidenced from the fast penetration of mobile devices even in remote parts of the country. With this comes huge demand for other goods and services that feed the smooth operations of the sector. As such there is a proliferation of outlets for the same all over the country and this right here is job creation. A few examples.

Phone and accessory outlets

To get the hang of how new businesses have come about and continue to thrive as a direct result of the growth of Safaricom, just have a look at the hundreds of shops lining the crowded streets of downtown Nairobi for example. Granted, these are not all selling phones that will carry Safaricom SIM cards but let’s face it. A huge majority are. As per the numbers, out of every 10 phone calls made in the country, 8 are to or from a Safaricom line. That’s a good 80% – a majority by any measure.  As far as SMS traffic goes, 90% of it is to or from Safaricom lines.

M-pesa agents

Everywhere you look there is an Mpesa agent nearby. Mpesa has over the years managed to penetrate even to far flung areas, enabled movement of money in remote areas and most importantly, created employment in areas where there otherwise wouldn’t have been jobs. In fact, across the country, M-pesa has upwards of 100,000 agents. These are 100,000 jobs created, a large number of families fed and clothed, and the ripple effect now and in future is of direct benefit to society and to the larger economy.

Airtime resellers  

You’ve seen them all over. Men and women selling airtime at street corners, in shops, salons and even to name a few. In the year ending March 2016, these airtime agents earned Kshs.10.78 billion in commissions. This is income for families and in turn income for the economy.

Multiple services

Successful businesses are the cornerstone of a good economy and good communication is the corner stone of a good business. Through provision of tools and channels to help businesses grow and thrive, Safaricom covers businesses from different angles, all of which contribute to their overall growth. We’re looking at cloud services, wireless connectivity, mobile communication and money transfer. By so doing, Safaricom provides a wholesome environment for businesses to set themselves up for success.

Loans

If handled well, loans are quite an enabler to smooth start and smooth running of businesses and through partnerships with banks, Safaricom has been enabling businesses with loans. Through its partnership with CBA for M-Shwari, it has collected Kshs.8.1 Billion in savings from a membership of 3.9 Million clients. It has disbursed 10 billion in loans.

KCB Mpesa which was launched just last year already has Kshs.190 Million in deposits and has disbursed Kshs. 1.4 Billion in loans.

Even Okoa Jahazi which is some sort of loan sees to it that one does not miss a deal for lack of airtime. I was surprised to learn that this service has afforded Safaricom a revenue of Kshs.3.1 billion. This indicates good reception of the service.

These loans are helping businesses run smoother and contributing positively to the overall economy.