“Our global clients have gotten excited. There is 100 billion US dollars in infrastructure investment in the region. We all know the correlation between economic growth and infrastructure investment is a strong one. The second thing is if you look at energy, we estimate that there are 290 gigawatts of energy potential in East Africa. Today there’s only an install base of seven gigawatts,” Bill Russo, managing partner at McKinsey East Africa, told CNBC Africa.
“What’s exciting is that much of that energy is actually low-cost, particularly hydro, gas [and others].”
Kenya will be McKinsey’s seventh African hub, having already settled in South Africa, Angola and Morocco. The New York-based consultancy firm has however been active in Kenya in the past, restructuring several blue chip companies such as East African Breweries, Kenya Commercial Bank and financial services group Britam.
(READ MORE: Britam begins trading at the NSE)
Recent resource discoveries in the region have been a key driver of investment in East Africa, but the region’s resource potential is still largely unexplored when compared to other regions in the continent, as well as the rest of the world.
“I think in the case of Kenya, if you look at these countries that have suffered the resource curse, often they don’t diversify their economies. In a good way, at least Kenya already has a diversified economy. Now it’s about getting the infrastructure and the policy right,” Russo explained.
Aside from the resource factor is Kenya’s Information and Communications Technology sector, which is the source of stellar innovations and revenue.
(WATCH VIDEO: Rapid growth in Kenya’s ICT sector)
“Kenya’s GDP contribution from the internet is already 2.9 per cent more than double the rest of the continent. To put that in context, the United States is around 3.8 per cent. If you increase broadband penetration, it can add another billion dollars to the economy,” said Russo.
“Human capital is actually a real strength. There are a number of very talented Kenyans, [and] we’re excited by the potential of Kenyan talent to join us in McKinsey.”