Kenyan bigwigs eye Olympics for dealsComment on this story
By Tosin Sulaiman
LONDON - Kenyan athletes competing at the 2012 Olympic Games may be forgiven for thinking they are in London to win medals and achieve sporting glory, but the government of east Africa's largest economy has other ideas.
Joining, and possibly outnumbering, the 50 or so medal hopefuls in London will be Kenya's president Mwai Kibaki and a delegation of government officials, heads of state-owned enterprises and bankers, who will be attending a neatly timed investment summit and diaspora conference.
In between the 10,000m races and the marathon - events Kenya is expected to win - pitches will be made and deals done and the hope is that a record medal haul for the country and the headlines it brings will help boost investment.
“Anytime that Kenya wins a medal you find that Kenya's name is mentioned everywhere,” Ephraim Ngare, Kenya's High Commissioner to the UK told Reuters. “If you have your national anthem played time and again that's very good for the country. We will take full advantage of that opportunity.”
Kenya won 14 medals, including six golds, at the 2008 Beijing Olympics, its best ever showing.
Seasoned frontier market investors are no strangers to Kenya, whose capital markets are advanced by regional standards. An added draw is its potential as a crude oil producer after Tullow Oil announced discoveries earlier this year.
But the Olympics initiative is also aimed at potential investors who may only associate Kenya with its runners, safaris to see big animals and mobile money.
Besides the investment summit, which will take place on July 31, Kenya has also taken over a three-storey building next to the Olympic Park in east London, called “Kenya House.” It will showcase investment opportunities in Kenya, Ngare said, and host meetings between government officials and companies looking to invest in oil exploration or infrastructure projects.
There will also be a diaspora conference on Saturday aimed at the estimated 130,000 Kenyans living in Britain.
Taking advantage of sporting events to market a product or a nation is nothing new and Kenya is not the only country planning to woo potential investors during the Olympics.
Nigeria will also be holding a 3-day conference in London next week, featuring its president, finance minister and billionaire industrialist Aliko Dangote, among others.
“When the world's attention is focusing on something and you're able to associate with that you can get part of the goodwill,” said Terhas Berhe, managing director of Brand Communications, a brand agency working with the organisers of the Nigeria conference.
Whether sporting success translates into increased investment flows is difficult to measure, but South Africa's drama-free staging of the 2010 football World Cup did help to change investors' perceptions of the country.
There is also evidence that sport can help to grow a product's market share. One of Berhe's clients, Ecobank, relaunched a money transfer product during the World Cup, running TV and commercials at half-time during matches. Within a year, revenue for the service grew eight-fold.
“That's what sports deliver for you,” Berhe said. “They deliver an audience at their most engaged.”
Multiple victories for Kenya at the Olympics will not necessarily move a hard-nosed investor, but having the country's name up in lights can't hurt, said Sven Richter, head of frontier markets at Renaissance Asset Managers.
“It's quite smart to capitalise on it,” he said.
Daniel Broby, deputy chief executive at frontier markets boutique Silk Invest, sees parallels between Kenya's runners, many of whom come from the Rift Valley and train barefoot, and a country that has been able to succeed with the resources it has.
“Their economy is emerging. It's an economy that doesn't have much but they're in it for the long run,” he said. “Clearly, there's an analogy to be made there.” - Reuters