Is Kenya losing the IT battle to Mauritius?

Island appeal
But in March this year, shortly before its second-year anniversary, SleepOut’s CEO Johann Jenson decided to set up an office in Mauritius. Warning bells sounded for analysts who read in the decision a desire to move to a friendlier business environment if the company was to continue on its strong growth path.

Jenson, however, insists “very little has changed about the company and our objectives in East Africa”.

Mauritius has a well-developed business process outsourcing industry, which means that SleepOut will be able to take advantage of a mature multilingual customer support and software talent pool

SleepOut’s operations in Kenya will continue, he said, and the only difference will be an enhancement in the services offered to hosts and travellers. That said, he added that the decision to move to Mauritius was motivated in part by how well its government supports tech ventures.

“Mauritius has a well-developed business process outsourcing industry, which means that SleepOut will be able to take advantage of a mature multilingual customer support and software talent pool,” he says.

Since 2005, the small Indian Ocean island has embarked on an aggressive national re-branding campaign with the hope of becoming a cyber island. It has capitalised on the expanding BPO (business process outsourcing) landscape and developed technology and free trade zones like Ebene Cyber City, which houses 52 IT/BPO companies.

Many large business entities, including TNT, Orange, Ceridian, Infosys and Anglo African, have recognised the island nation as a centre of excellence and made use of its BPO services. Sunil Bheroo, a barrister and Mauritius-based management consultant, says, “Mauritius, being bilingual in English and French, makes it advantageous as compared to other countries.”

The Indian Ocean island is also a magnet for tourism. Mauritius is popular for its tropical climate and beaches and in 2013 it attracted just under 1m tourists, according to Statistics Mauritius; this is nearly equivalent to the population of the entire island, which stands at 1.26m. In the same year, tourism earned the country MUR40.6bn ($1.4bn), according to the Bank of Mauritius.

In comparison, the 2014 Economic Survey shows that the total number of international visitors to Kenya dropped by 11.2% in 2013 to 1.5m and earned the country KSh94bn ($1.1bn). The advantages that a tourism sector as vibrant as Mauritius can offer a company that is built around holidays, travel and accommodation are evident. Since 40% of all tourists to Mauritius make use of vacation rentals, it satisfies part of SleepOut’s strategy on how to grow the business.

“Because of Mauritius’ focus on vacation rentals, and tourism in general, our team in Nairobi and Mauritius will be able to better test our assumptions before launching new features for our users,” said Jensen.

These technology-and tourism-related benefits are in addition to Mauritius’ stable political environment and its rapid growth into a middle-income economy from one that was low income and overly reliant on agriculture 45 years ago.