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Monthly Archives August 2019

Kenya’s New Digital Tax targets Google, Facebook, Netflix and others

Posted on 2 min read

Governments have increasingly resulted to taxing digital services through taxes such as Social Media tax in Uganda and various countries in Africa. The trend seems to be picking up with different versions of such taxation in the East African region. This week, Kenya is on the verge of introducing taxes on the digital services providers, with the government revealing that plans are at an advanced stage to start taxing companies offering over-the-top services (OTT) in Kenya.

This development will require services providers such as Facebook, WhatsApp, Netflix and Google to declare all the income that they derive from consumers in Kenya, and pay both income and value added tax. In additional, the Kenya Revenue Authority has sought the country’s Communication Authority assistance in introducing taxes for income generating apps that are used in Kenya, specifically the ones that allow in-app purchases and also those that charge for download. The details of the taxes are not clear, but already there is a bill in the Kenyan parliament that seeks to legally allow for such to happen.

Kenya’s approach is different from the approach that Uganda took of directly taxing consumers, since it is going for the platform providers themselves. However, this will be a difficult task considering who is involved. Already, the Google office in Kenya said that the government risks evoking trade wars, since tech companies could retaliate Kenya’s move. This also comes at a time when taxi drivers in Kenya have successfully forced taxi hailing service providers Uber and Bolt to increase their prices, a pressure they exerted through industrial action and government intervention.

Governments all over the world face the challenge of taxing multinational companies providing digital services such as Uber and Google, and there has been a trend where some opt to tax them directly as it has been the case in France. The governments argue that these service providers benefit from infrastructure and services provided by the governments in the respective countries and thus should pay taxes, while these companies argue that their tax jurisdiction is in their countries of incorporation. As time goes, we expect to see such conflicts increase and globalization and digital services converge.

Faced with increasing budget deficits in the recent years, the government of Kenya has resulted to increasing the tax brackets and casting its net wider. Last year, the government introduced additional taxes that increased the costs of internet connection, internet hosting services, and mobile money transactions. This new move is the first one that targets app developers and multinational corporations, a segment that is very hard to control and regulate.

We wait to see what will come out of this.

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Lawrence Mosa: The making of Canaan Properties

Posted on 3 min read

Lawrence Mosa lives by a code that if you want to do business on long term, do it legitimately.

Mosa is the founder and the Managing Director at Canaan Properties, one of the leading real estate management service providers in Nairobi. This is a business he has ran for 15 years.

It has not been rosy for him. He admits that one thing you will face as an entrepreneur is getting broke, and this is one costs of being in business. He considers it a form of school fees that one has to pay in business.

Mosa started a hardware business after campus. He attributes his entrepreneurial venture to two things: his father, who was a businessman, and joblessness. He had been involved in his father’s businesses while growing up, and this raised his interest in the same. He thus did some few businesses while in Kenyatta University using money from the then HELB. After graduating, jobs were not forthcoming. After numerous applications, he partnered with a friend to start a hardware business in Athi River.

The business was booming, at least for some time. What started as a 5k capital in business soon became a multi-million hardware. Seven years down the line, the hardware closed down, leaving him with debts to pay. This was a low moment, but also a learning moment for Mr Mosa in business. But it was from that failure that he rose to venture into Real estate management.

Having a loan to repay after the business collapsed, Mr Mosa decided to dispose off a piece of land to pay off the debts. The person he owed the money was amazed at how fast he was able to dispose off the piece of land. He asked him to help him sell a piece of land, which he objected, reminding the guy that he was only selling because he had debts to pay.

Upon his insistence, he agreed to sell and receive a commission. And that was his Eureka moment; Canaan properties was born. Today, Canaan Properties is one of the largest comprehensive real estate services providers in Kenya, with services ranging from letting, selling and managing of residential and commercial properties to development consultancy.

 Mosa says that he built Canaan Properties to be an enterprise that will outlast him, and therefore adheres to the best practices possible. He even has  advisory board that audits the business every quarter, and ensures that it is ran according to the best practices. Among their top core values is integrity, and this has helped them win over customer trust, and kept them in good books even with the authorities.

Some of the specific lessons he shares with incoming entrepreneurs are:

  1. Establish a relationship with your bank, as you will need funds as you grow.
  2. Create systems and processes that will ensure that your business can operate even in your absence. This is key to growing.
  3. If you are starting up, it would help if you have an anchor client who will guarantee you a sustained income as you expand. Without a consistent income, it is likely that you will only focus on survival instead of long term growth.
  4. The best marketing channel is through referrals. Ensure you have happy clients who refer you to others.
  5. Finds interns to hire, mentor them and grow together with them. This is beneficial to both of you, and better than finding experienced personnel who you cannot afford.
  6. God is always faithful, and rewards the work of your hands.
  7. Finally as a Christian remember that whatever you do must be done as unto the Lord so this business must be conducted in a manner be true Ambassadors of Christ in the market place.

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The Persuasive Technologies that keep you addicted to Social Media

Posted on 4 min read

Last year, salesforce CEO Merc Benioff was quoted during the World Economic Forum saying that Facebook should be regulated the same way tobacco companies are regulated. This was in reference to the tendency of social media to be addictive, and to influence human behaviour and decision in a way no other media has achieved before. He said that products like Facebook and other social media are addictive by design, and are being made to be more and more addictive.

This proposal appears too radical, or some sort of joke. To most people, social media does not have much influence over them, and they consciously make the choice to visit the pages whenever they want. But is that true? If this is what you think of these digital media, you are likely to be one of the billions who are either ignorant or have been deceived, because these systems are designed to make you think so, while in the background they have you in strings like puppets. In Kenya, it has been reported that people aged between 21 and 35 spend an average of three hours per day on social media.

Facebook, twitter, Instagram, YouTube and others are not just some tech companies, but more of psychological think tanks. The key to their success is based on an army of user experience designers applying techniques to keep you using their products, even when you do not want to. It is like they have installed an app in your brain which directs you to open the apps and start scrolling endlessly and aimlessly, at the same time keeping an eye on the number of likes and shares your recent post is generating. This generates a good feeling in you, a sense of accomplishment when your post is shared, and an addiction that keeps you glued to the screen. How do these tech companies achieve this?

How it came to be

Dr B.J. Fogg, a psychologist at the Stanford Persuasive Technology Lab, says that it is now possible to create machines that can change what people think and what people do, and the machines can do that autonomously. These machines are then deployed by for-profit companies to help them make money. The result of this what we are having today. While social media companies started as tech companies, they realized that there is more to tech if their products were to be adopted. This is where they entered into the field of human psychology.

Behind the screens, there are psychologists, neuroscientists and social science experts who use their knowledge of human vulnerabilities to capture your attention and get you addicted. The aim is to create digital environments that make users feel fulfil their basic human drives better than real world alternatives. They motivate you to use a product, they make it very simple to do it to the extent that you do not have to think, and trigger you to keep doing it through notifications, friend requests and status updates. The notifications from social media release some dose of feel good hormones (dopamine) to the user, the same way smoking cigarette or using cocaine does.

Today, the addicts of social media are many. Like in the case of other addiction, these addicts do not consider themselves addicted. This is why you find so many people scrolling on their phones while in a meeting or engaged in a conversation. You find two friends next to each busy chatting on phones with friends far away, while neglecting the friends that are right next to them. I always find myself clicking on the WhatsApp icon even when I pick my phone to check the time. And when I am too lazy to scroll through the apps, I can easily switch to viewing status or Instagram TV which require little or no input from my end.

Implications

What are the costs and implications of these technologies today? We have people who are driving while distracted, becoming unproductive at work, and not paying attention in social conversations. We have children who are lagging behind in school, living unhealthy lifestyles and failing to develop important social skills. We have elections manipulated, increasing cases of depression, and people engaged in endless loops of posting and sharing just to get the next like. Children develop unhealthy sleeping habits, and live with an ever-present fear of missing out (FOMO). W We have people doing outrageous things just for clicks and likes. Fake news is news.

Solution

The one solution that is hard to implement is self-regulation for these tech companies. This would be a form of near self-annihilation, because they depend on you using their platforms even more for those platforms to grow.

Government regulation poses a problem because most of these big tech companies are bigger than most governments, and possess immense influence. It is also hard to strike the delicate balance between constructive regulation and stifling innovation.

Maybe, the best step is for one to carefully consider their ways and ensure that they are using these tools in a responsible way. However, the tech companies have that covered as well, as addiction starts with a deception that you are not addicted.

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How social media is used to influence elections

Posted on 3 min read

Cambridge Analytica played some hidden roles in elections around the world, from the US presidential elections, the UK Brexit referendum, to even the Kenyan general elections. How did they achieve this? It was easy. The marriage of technology and human psychology has produced powerful tool that can reach people, understand their behaviour, and influence them towards a certain goal. Such a goal can be voting.

Suppose we could group all the people into two main political inclinations; the Oranges party, and apples party. Each party is passionate about their fruit, and equally hateful of the other fruit. How would social media be used  to promote each parties agenda?

First, it would be very hard to convert someone from one party to another through social media. The best way to convert people is to use other people. However, social media can be used to poke holes on what you belief, slowly making you a candidate of conversion into the other party.

The first thing is that social media is able to detect which political party you belong to. This would be based on the pages you like, the people you follow, the kind of news you read, and the groups you belong to. If you constantly like news that portray the Oranges party positively and the Apples Party negatively, then most likely you belong to the Oranges Party, and you are likely to vote for the Orange candidate. Google would be able to do the same using similar factors such as the search queries you make, the emails you receive, and the YouTube channels you watch. This is the most useful part of social media.

Once this is achieved, the next thing is to make use of each category of people. For your supporters, this is what you can do:

  • Get them to donate to your party
  • Inspire them to turn out to vote
  • Continue to radicalize them by showing them negative things about your opponents
  • Get them to talk about you everyday, and make them your evangelists.

For people in the opposing party, this is what you can do

  • Show them how absurd their political opinion is
  • Create an impression that they are losing and your party is winning
  • Poke holes into their agenda and their candidates
  • Amplify the scandals made by their candidate.

The above activities present almost everything a party needs to do in order to win elections.  Only that, you can be in a position to do this just using social media. Once you have achieved this, you will also benefit from the positive messages that your users will keep posting. The best thing about radicalizing your followers is that they will drive conversation  about you in their own circles offline, or in WhatsApp groups which you have no access to.

Once your followers are active online, your messages on social media will get more likes and shares, and therefore have a wider reach. You will be able to influence the news cycle, and kill negative stories about you. You will be closer to winning the election.

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Questions to expect in the upcoming Kenya Population and Housing Census

Posted on 2 min read

Where you will spend the night on 24th August 2019 will affect this country for the next 10 years, because that will be the reference night for the 2019 Kenya Population and Housing Census. You will expect someone to knock at your door between the evenings of 24th to 31st August and ask, “What are the names of each person who spent the night of 24th/25th August, 2019 in this household?” You will then proceed to give some information about them, or they can answer on their own.

The census will be heavily dependent on technology, with enumerators using android devices to capture and transmit all the data that will be collected. This is expected to increase the accuracy of data collected, due to inclusion of GPS based location information, and also make it faster to transfer the data to the central servers. Except to see the enumerators armed with a tablet.

What information should you be expected to give during the census? For the information regarding ICT, the Kenya National Bureau of Statistics has the following questions for you:

  1. Have you owned a mobile phone in the last three months?
  2. Have you used a mobile phone in the last three months
  3. Have you used the internet from any location in the last three months?
  4. Have you used a computer/laptop/tablet in the last three months?
  5. Have you bought or ordered goods online in the last three months?
  6. Have you registered for the Huduma Namba?

Besides ICT, the other information required for each person in every household include:

  1. Name
  2. Relationship to the head of the household
  3. Sex
  4. Age
  5. Date of Birth
  6. Mother’s detail (if present)
  7. Ethnicity
  8. Religion
  9. Marital status
  10. Birth place
  11. Previous residence (where you were living in August 2018)
  12. How long you have lived where you are
  13. Reason for moving to the current location (if you have moved)
  14. Status of parents
  15. For females aged 12 and above, details of children they have borne.
  16. Information on difficulties in doing activities of daily life (like disability)
  17. Education attainment
  18. Labour force participation
  19. Information on annual livebirths and deaths in the household
  20. Involvement in agriculture
  21. Housing condition and amenities (e.g. waste disposal, source of drinking water, number of rooms in the house)
  22. Ownership of household assets like radio, TV, fridge… etc.

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Kenya’s Failed Primary School Laptops Project

Posted on 3 min read

In 2013, the government of Kenya promised to issue laptops to all pupils joining primary school. This was made as an election campaign pledge, and it was one of the most expensive political promises ever made. It would involve issuing laptops to every new batch of pupils joining class one every year. The aim of the project was to promote digital literacy and prepare the young learners to thrive in a ICT based economy.

It wasn’t until 2016 that the government started following through with the promise. However, it was no longer laptops, but tablets. The reality had slowly sank in that there was no way the government could issue delicate laptops to grade one kids, preferring to use tablets that were specially designed for the kids.

Six years after the project was announced and three years after the implementation was started, the project was silently retired. In fact, there was not official announcement about the same. Only the sharp eyed budget analysts discovered that the government had allocated zero shillings for the project, signaling its end. What went wrong? Many things, because as we will see, technology for the sake of technology is not a good idea, and digital inclusion cannot be attained while ignoring other basic needs.

Status of some schools in Kenya

Why it failed

Most politically motivated promises are done without regard to many basic principles of public policy formulation. This project was bound to fail for the following reasons:

  1. It would be extremely costly to run the project. This was actually going to cost more than all the other costs associated with free primary education currently offered by the government.
  2. Lack of skilled personnel to run the program was a major hindrance. Most of the teachers were not very computer literate, and a one week training by the government would not make them experts, when the children they were supposed to teach could easily outdo them in using smartphones and tablets. The content was also not ready and it delayed the launch for a quite a long time
  3. The priorities were wrong from the beginning. Schools lack teachers, classrooms, connection to the grid, and in some places, there are no schools! It is also common for children to drop out of school due to lack of books or even food.
  4. Lack of requisite infrastructure. Only 10% of schools were connected to the grid, while 50% were far away from the national grid. Schools also lacked the facilities to safely store the devices, considering the many cases of school break-ins where books were being stolen.
  5. Lack of support mechanism when technology failed. This left both teachers and learners stranded, and often having to wait for long to receive technical support.
Such are some pressing needs in some rural schools

What could have been done differently?

The goal to impart digital skills in students is a noble one. However, as it stands, there could be a better approach to the same. One way would be to build computer labs in all high schools in Kenya. This approach would work better since the students already have the literacy and numeracy skills. As some people had also suggested, the labs could also be used as community centers to provide the same skills to people in the neighboring communities during holidays or in the evening. The cost would be affordable.

While the government tried to make the most of the project by having the tablets locally assembled, there was little transfer of skills involved. A conversation with one of the people involved revealed that all the parts of the devices, including the plastic covers, were imported, and their only duty was to plug in parts together.

The project failed.

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Conducting business through online markets

Posted on 4 min read

While the world has shifted to a Digital Economy, many people find themselves unable to venture into doing business online due to lack of information on what digital economy entails, or lack of skills to utilize the same. At the same time, many people keep venturing into entrepreneurship in the same old ways while failing to take advantage of digital tools that can be used to reach bigger markets, lower operational costs, and break the geographical barriers. We want to share a few tips that can help an aspiring entrepreneur take advantage of this digital economy.

Why it should be easy

Digital sounds sophisticated, and this word usually shuts out most people who have no idea on where to begin. While the technologies behind the digital economy are complex and sophisticated, application of the same need not be. Many people do not seem to know this.

Any piece of technology is always hard to design and manufacture, but should be easy to use; thanks to application of human centered design. A 3 year old or a 93 year old can learn to use an iPad, but it takes well trained and experienced scientists and engineers to make one. The same thing applies to the digital economy, where, while the principles and processes involved are complex, the application of the same is easy.

What is Digital Economy?

Digital economy refers to an economy that is based on digital computing technologies, and is also known as the internet economy. More recently, the term is has been used to refer to conducting business through markets based on the internet.

Digital or internet economy offers unprecedented opportunities for business, which many people and businesses are taking advantage. One of this is doing business purely online, without much physical interaction with clients, and the second one is using online platforms to reach out to clients who you interact with physically in your business.

Getting your business Online

What does it mean to have your business online? There are several ways to do it, with the following being the main ones:

  1. Having a website and email services for your business
  2. Running social media accounts and pages
  3. Listing your business on online directories
  4. Adding the business to Google maps
  5. Selling on an online marketplace like Jumia, OLX or amazon.

While having a website costs money, the other four approaches need not cost any money (though you need the products first). Even for a website, the costs have dramatically come down, with running a website costing an average of KES 2000 per year, and the initial design of the website costing as low as KES 10,000 (check www.truehostcloud.com/marketplace).

Reaching your target market

It is one thing to have an online presence, but a totally different thing to benefit from it. Most people get online without a plan or objective, and end up getting frustrated by the lack of results that ensues.

To have maximum impact online, you need to figure out who is your target market, and how to not only reach the market, but influence their buying decision. This is a very complicated part and if you do to know this, do your research in advance.

For each of the channels or digital tools that one chooses to use, there is a lot of homework and preparation that one needs to do. Here are a few:

  • Websites

Having a website is not just a one off thing. You need to ensure that there is traffic to your website, and the traffic consists of the right people. This is where you do something called Search engine optimization (SEO), which involves making your site easily findable by people who are looking for it.

  • Social media accounts

Social media is a useful tool for reaching out to people. You need to choose the right social media to use, and use it effectively. The advantage is that you can quickly create networks among your friends, but beyond that it takes skills and experience. Learn more about it.

  • Online directories

Online directories list businesses online, allowing for people searching for a service to know you, get your contacts and a description of the services that you offer. There are many free directories that offer this in every location.

  • Adding your location on Google maps

This is involves adding your business location on Google Maps. Whenever people search for your business or related keywords on google, they are able to find it.  It works well with Google search, and also when you want to reach people near your location as Google gives your location the preference.

  • Selling on online marketplaces

You can start by selling on online marketplaces such as Jumia, OLX and Amazon. These are ready markets, as there are already customers looking for products through them. It takes less effort to be noticed as opposed to developing your website from scratch.

Instead of focusing on one of the above channels, you can as well do all of them! Remember, digital platforms are just tools; You still need a viable business plan to get your things done.

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