Kenya:Where to make big money in 2015

Forget about the challenges of 2014, the New Year comes with a lot opportunities for you to tap and mint millions. Here is how.

2015moneyKenya’s economy is about to turn a new page. And while 2014 has ended with its highs and lows for entrepreneurs, the New Year presents a fresh start.

In 2014, perhaps no entrepreneur has portrayed the ability to harness opportunities in the ICT sector better than Danson Muchemi, the founder and CEO of JamboPay. The company signed deals to offer cashless payment platforms for both Nairobi Water and Nairobi County government in quick succession, edging out giant corporates.

And his tentacles are spreading fast. He is already courting small businesses, kiosks, supermarkets and restaurants, in Nairobi.

“We already collect payments for Nairobi Water through our big corporate partners but we have decided to extend this service further through smaller business owners,” Mr Muchemi said recently.

In a revised partnership with JamboPay, selected business owners will get JamboPay’s hand-held point of sale terminals. The initial set-up cost is about Sh44,000, with an agent accessing higher commission if he or she pays the set-up cost. For every Sh8.80, agents will earn Sh0.40 of the Sh22 that the utility firm pays JamboPay for the service. Mr Muchemi’s business is also working with City Hall in the cashless parking system helping the county collect an estimated Sh5 billion annual revenue.

Cash-lite opportunities The cash-lite cake is barely eaten.

Entrepreneur Tonnie Mello says cashless evolution will make new millionaires. “Look at the numbers and see the phenomena that is unravelling. Adoption of electronic payment platforms provides new avenues to strike mega business deals for big entrepreneurs and a chance to collaborate and increase output for small agents.” In 2015, new projects are coming up. For instance, Co-operative Bank’s agents could be beneficiaries-in-waiting as the bank rolls out cashless payment system, M-Nauli.

The bank’s group managing director Gideon Muriuki says the lender is holding talks with county governments with a view of urging them to use M-Nauli. “The bank is still refining the product. It will be used for similar services such as market stalls fee, ticketing, parking fees, and other micro payments,” said Mr Muriuki.

Construction and real estate This segment is awash with opportunities. Picture this, in 2014, Nyandarua carried out a Sh400 million road repair programme that saw locals hiring out lorries to the county government make millions. In the project, each lorry made Sh25,000 per day for a period of about one month, with fuel cost being met by the county government.

Mr James Mwaura, who owns a transport business in Thika was one of the beneficiaries. “I hired two lorries to the county government and made about Sh1.3 million,” says Mr Mwaura. And with Ol Kalou town roads expected to be upgraded to bitumen standards by the county government in 2015, he will be hoping to hire out his three lorries to either the county government or the contractors.

“The construction business has evolved and contractors no longer have to own all equipment. They can hire,” he says.

On the other hand, Michael Omondi of TransChoice transporters is betting big on the construction of 2,000 kilometres roads that is set to start in February.

“The tenders for the road construction will be issued in February and I am hoping that I can hire out my seven tippers to a winning bidder.

This is an opportunity that I can’t afford to miss,” he says. The project is the first phase of the government’s ambitious plan to build 10,000 kilometres of roads. The first phase will cost about Sh40 billion and will be implemented through a public-private model.

The juiciest piece of the pie is likely to go to entrepreneurs in real estate sector who are offering cheap, modern construction models through use of prefabricated materials. “These will be the future of construction and already we have seen entrepreneurs align themselves with such models,” notes Mr Mello.

Interestingly, more opportunities for transporters exist in the supply of cement and building materials.

“Manufacturers will most likely be looking to hire transporters rather than acquire their own vehicles.

It will be cheaper for them while providing new opportunities for entrepreneurs,” says business coach David Nyachae.

“In rural areas, hardware wholesalers should be ready to provide for goods such as cement.” Mr Nyachae singles out the planned construction of houses in county governments by the National Housing Corporation (NHC) and the National Social Security Fund (NSSF) as a case in point. “NHC is currently planning to build over 200 middle class homes in Nairobi while NSSF is working with county governments to build houses in counties. Most likely, these projects will seek to buy locally available construction materials, granting local suppliers an opportunity to make good money.” Value addition in agriculture In Uasin Gishu County, Jos Creemers has turned to value addition. The manager of Lewa Farm in Maili Tisa, in Eldoret, has 100 dairy cows producing about 1,300 litres of milk per day.

Rather than sell his milk to processors, the farmer turns it into cheese and mala (sour milk), fetching better prices.

By April 2014, supplying milk to hotels and cooling plants would fetch him at least Sh40,000 while processing would give him Sh80,000 per day. Each kilo of Baraka Farmhouse Cheese goes for Sh800. “10 litres of milk produce 1kg of cheese. Some 100 litres of the milk is pasteurised daily into mala. A 500ml packet of Baraka Farmhouse Lala goes for Sh50,” Jos Creemers told Nation recently.

According to him, value addition has given him an edge over other farmers. “I have silage that I have preserved on my farm for close to three years. I never run short of feed and this is one of the points that gives me an advantage,” he says.

Value addition expert Samuel Wanjohi says value addition should be a priority for farmers.

“Many farmers are content with delivering milk to cooling plants.

But they can do more and double the profits,” he notes.

30 per cent State tenders Since the coming on board of preferential business rules over a year ago, the value of State tenders reserved for youth and women has increased from Sh500 million into billions. According to a report presented to Parliament, by late 2014, the government had awarded over Sh1.4 billion worth of contracts to women and youth.

You do not have to apply for the tenders alone as Murang’a Women Sacco found out. The chama, whose members contribute Sh400 per month, won a Sh30 million tender to repair roads in Murang’a County.

Grace Cherotich Korir won tenders worth Sh750,000 to supply computer and office accessories in 2014.

Nairobi-based procurement consultant Rahab Nyakio says the 30 per cent procurement rule is the new frontier for women and youth to grow wealth. “Those who apply diligently and without giving up will make money in 2015 as many tenders are up for grabs,” she says.

Ms Esther Kagiri, owner and Globe Track International boss agrees. She kept applying for tenders even after losing her first bid and early 2014, she signed a media and monitoring contract with an insurance parastatal.

Fresh produce supply With shopping malls coming up across the country, suppliers of fresh produce have a chance to make money. Ms Janet Kirwa is cashing on this already. In the last eight months, she has been supplying 50 litres of milk to a supermarket in Nakuru daily.

“I make Sh67,500 from milk supplies. I also supply Brookside cooling plant with milk making an additional Sh30,000,” she says, adding that she is now seeking a contract with a newly established supermarket in Naivasha to supply grains.

Further, setting hospitality outlets in major towns is a sure way to making millions. Kenya Hotel Keepers and Caterers Association has singled out Nairobi, Eldoret, Kisumu, Kakamega, and Meru — with Machakos catching up fast — as areas where the hospitality business is booming. As long as you ensure that your investment offers clean, courteous, consistent and excellent services, you will earn a good profit.

Have a profitable 2015.



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