Moonki may want to disagree -Safcom created 414B and supports 0.6M jobs

[RV Pundit]

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This is precisely what I was saying in the other thread. If we had 1 SafCom size companies in say 10 service sub-sectors - we could be talking about 5 trillion kshs and 6m jobs.
http://www.businessdailyafrica.com/Corporate-News/Safaricom-underlines-role-in-Kenya-economy-with-845-000-jobs/539550-3438230-ixw6i8z/index.html

[MOON Ki]

This is precisely what I was saying in the other thread. If we had 1 SafCom size companies in say 10 service sub-sectors - we could be talking about 5 trillion kshs and 6m jobs.
http://www.businessdailyafrica.com/Corporate-News/Safaricom-underlines-role-in-Kenya-economy-with-845-000-jobs/539550-3438230-ixw6i8z/index.html

What would you like me to disagree with, and why?   I see no reason why we could not be "talking" about whatever amount of money and whatever number of jobs.  Never any harm in talking ... usually.  But I would add that, in my view,  what Kenya needs is to create jobs, not merely "support" jobs; see the point in that article about how "sustained' jobs would  in any case exist without Safaricom.  (That's actually not too hard to see: look around you, and you will note that quite a few people peddling  Safaricom products are also peddling a whole bunch of other things.)

With a view on reducing unemployment: How many new jobs did Safaricom create (directly or indirectly)  last year?   How many new jobs did Kenyan economy create in the last year?   Perhaps we can start there and then proceed to talk about the 6m that could be "supported".

[MOON Ki]

https://img03.olx.co.ke/images_olxke/1000308719_1_644x461_beauty-shop-mpesa-agent-equity-agent-shop-for-sale-in-umoja-innercore-nairobi-cbd.jpg

http://4chlff2fhold2qx0rp267ua5lt2.wpengine.netdna-cdn.com/wp-content/uploads/2012/11/e-5bnairobi-safaricom-and-vodafone-m-pesa-13.jpg

[RV Pundit]

That safaricom/m-pesa "support" is probably the difference btw these SMES & informal business going burst or surviving. Now imagine if we had more safaricom - Banking (Equity bank agent banking - insurance companies (offering policies at agents/broker) - retail ( Nakumatt/Tusky running small stores) - real estate ( agency for managing rents) - name any services - and all these can have huge multiplier effect. i think what information technology has done is to make service trade able and sophisticated. Therefore the manufacturing multiplier (which is highest - about a factor 10 from what I have read ) can easily be replace with innovative service driven sectors like what Safaricom is doing in communication & banking.

This safaricom multiplier effect is clearly demonstration that services can replace manufacturing going forward.

[MOON Ki]

That safaricom/m-pesa "support" is probably the difference btw these SMES & informal business going burst or surviving. Now imagine if we had more safaricom - Banking (Equity bank agent banking - insurance companies (offering policies at agents/broker) - retail ( Nakumatt/Tusky running small stores) - real estate ( agency for managing rents) - name any services - and all these can have huge multiplier effect. i think what information technology has done is to make service trade able and sophisticated. Therefore the manufacturing multiplier (which is highest - about a factor 10 from what I have read ) can easily be replace with innovative service driven sectors like what Safaricom is doing in communication & banking.

See my questions above, as well as the photos of two of the jobs "supported" by Safaricom.

This safaricom multiplier effect is clearly demonstration that services can replace manufacturing going forward.

"Proof by one example" rarely works.     Otherwise one could take any single large company or industry and make such an argument.    For example, what is the "multiplier effect" of tourism?   Should we on that basis argue that tourism in Kenya can replace manufacturing?

You also seem to believe that it is easy to develop companies like Safaricom and products like MPESA (mobile money etc.), whence statements like "If we had 1 Safaricom size companies in say 10 service sub-sectors".  Safaricom has been around for 20 years, and MPESA has been around for 10 years.   How many companies and innovative products of those types has Kenya produced in that period?

You suggest things like "Nakumatt/Tusky running small stores".   Do you understand why supermarket chains, anywhere in the world, are not in the business of running small stores and in fact do better if more small shops go under?    If what you suggest were viable in Kenya, could it have occurred to the owners of Nakumatt and Tusky, or are they idiots?

You also suggest things like "insurance companies (offering policies at agents/broker)".   Presumably such ideas have never occurred to such companies, even though they have been around for years and years?    And have you considered the base market?   People will use Safaricom's products on an on-going basis and quite frequently; similarly they will make use of retail outlets.    How many Kenyans even care for insurance policies?   

Services can replace manufacturing: Nobody has ever argued against that (although your one-example "proof" is not the way to go.)     To see that obvious fact, it suffices to look at many "developed" economies.    The issue is the stage in economic development at which it happens.  Roughly: for that to happen, you need a large enough populace with large enough disposable incomes; that means jobs, and decent-paying jobs at that; and manufacturing has been shown as a very reliable way to go about that.   (I am here excluding "services" like shining shoes, selling roasted maize by the roadside, ... which obviously cannot replace decent jobs in manufacturing.)

[RV Pundit]

If you believe we are in the midst of information revolution that is as profound as agricultural and manufacturing revolution then these things start to make sense.What was not possible is now probably possible.We just need to harness the power of info tech revolution.Mpesa is good example of tech adapted so well to third world problem that turned world class.

[MOON Ki]

If you believe we are in the midst of information revolution that is as profound as agricultural and manufacturing revolution then these things start to make sense.What was not possible is now probably possible.We just need to harness the power of info tech revolution.Mpesa is good example of tech adapted so well to third world problem that turned world class.

Unfortunately, it does not appear that we have even got to the agricultural revolution.  That is why we have had to rely on donated yellow maize for decades; every year still have a large number of starving people; and malnutrition remains a serious problem.    "World-class" MPESA doesn't seem to have been of much help there ... not very edible, I suppose.   

[Georgesoros]

Yes Safaricome has done wonders.We could be seeing wonders if Uhuru govt did not stael most of the tax money meant for roads, hospitals, sewer systems, etc.

[RV Pundit]

Yellow maize is long gone thanks to Mpesa.Now the preffered and most effective hunger fighting tool is to send those in drought hit areas cash transfers via mpesa.The same is being used for our fledging welfare system to poor,old,sick and orphaned...who monthly receive mpesa money at the touch of a button.Without mpesa it would take months shipping yellow maize from illionis and trucking all the way to turkana....now it takes seconds saving lives while spuring local business. Your guys just dont get it.

[MOON Ki]

Yellow maize is long gone thanks to Mpesa.Now the preffered and most effective hunger fighting tool is to send those in drought hit areas cash transfers via mpesa.The same is being used for our fledging welfare system to poor,old,sick and orphaned...who monthly receive mpesa money at the touch of a button.Without mpesa it would take months shipping yellow maize from illionis and trucking all the way to turkana....now it takes seconds saving lives while spuring local business. Your guys just dont get it.

Apparently some have not heard of that MPESA story.      Take the following region of Kenya.

This is from June:   http://www.nation.co.ke/counties/leaders-plead-for-help-as-acute--hunger-bites/1107872-3257484-1261opo/index.html

This is from October: http://www.nation.co.ke/newsplex/WestPokotDrought/2718262-3419080-1121dthz/

How many seconds is that?    And what has happened there since last month?

By the way, you need to stop thinking like GoK types---that fighting hunger is  just a matter of getting food to the starving whenever they happen to be starving.   That sort of thinking is why every year over 1 million Kenyans end up in dire straits.   

The most effective hunger-fighting tool consists of long-range planning together with appropriate actions: producing food in sufficiently large quantities that is is always cheaply available to all; distributing it in a manner that will ensure said availability; planning ahead for drought-prone areas, and, where possible, working to reduce reliance on rain; and so on. and so forth.

[RV Pundit]

Mpesa is fighting hunger in many ways..first diaspora turkanas working in nairobi or kitale also mpesa food their families.Gov doesnt have enough money to turn 2/3 of kenya that is arid and semi arid into productive areas.There is surplus food stored in grain reserves but turkanas cannot afford.Mpesa is helping long term coz many banks & mfi are lending farmers credit to buy inputs via mpesa and receiving payment thro it.And we just started less than 10yrs.Imagine Mpesa impact 10 more yrs.You dont get.

[RV Pundit]

Safcom are making 500M USD profit  this year -and in few years it'll be making 1b usd. If we had Equity, KQ and 7 other companies making the same impact from service sectors - we skipped manufacturing straight to services nirvana.
http://www.standardmedia.co.ke/business/article/2000222171/safaricom-records-sh23-9-billion-net-profit

Here is safaricom trying to innovate the health insurance sector with m-tiba
http://www.standardmedia.co.ke/brandingvoice/kcb/article/35/mobile-phone-health-saving-plan-launched-for-low-income-kenyans

[MOON Ki]

Mpesa is fighting hunger in many ways..first diaspora turkanas working in nairobi or kitale also mpesa food their families.Gov doesnt have enough money to turn 2/3 of kenya that is arid and semi arid into productive areas.There is surplus food stored in grain reserves but turkanas cannot afford.Mpesa is helping long term coz many banks & mfi are lending farmers credit to buy inputs via mpesa and receiving payment thro it.And we just started less than 10yrs.Imagine Mpesa impact 10 more yrs.You dont get.

No need to give me such a hard sell on that story.   The people that might really have use for it are the 1.3 million who are starving.

[veritas]

There's no reception up there- most of Kitale, Marsabit, Turkana, even Nyanza.

[MOON Ki]

Safcom are making 500M USD profit  this year -and in few years it'll be making 1b usd.

If we had Equity, KQ and 7 other companies making the same impact from service sectors - we skipped manufacturing straight to services nirvana.
http://www.standardmedia.co.ke/business/article/2000222171/safaricom-records-sh23-9-billion-net-profit

That is actually not a lot of money for a country of 40 million people.    The article also points out this little matter: "40 percent owned by Britain's Vodafone". 

If we had, if we had, if we had.   Yes, indeed; if only we had.    Sadly,  we don't.

Here is safaricom trying to innovate the health insurance sector with m-tiba
http://www.standardmedia.co.ke/brandingvoice/kcb/article/35/mobile-phone-health-saving-plan-launched-for-low-income-kenyans

I take it that you did not read even the title of that article.   Here it is:

"Mobile phone health saving plan launched for low-income Kenyans".

Now go off and read the rest ... about how desperate the health-insurance situation is.  (Savings cannot be a substitute for proper insurance.)

[Empedocles]

Here's an interesting comment from the Business Daily article RVPundit linked to:

Interesting, "safaricom injected ksh 413.8 b into the economy." How did it inject this money yet the company is not involved in any business that "injects" any extra money into the economy from abroad? I understand that even the mpesa outlets that operates in a number of foreign countries operates under the Vodafone brand. Safaricom actually takes money out of our economy through payment of dividends to foreigners and all other services it imports.

If anything, all this money that Safaricom allegedly injected into the economy is the same money that the "economy" (me and you) used to buy services from Safaricom, as in we already had this money in our pockets (in the economy) but we "injected" it into Safaricom's pockets in exchange of their services. So what Safaricom did is just redistribute the money in the economy, otherwise they injected services only and took some money away from the economy.

I know this argument may sound lame, especially when viewed from the perspective of an economist, or from an academic point of view, but in practical terms, Safaricom injected ZERO shillings into the economy, unless it exported some services and earned foreign exchange for the economy. Would love to hear the opinion of others. :-)

Source: http://disq.us/p/1dalc10