Safaricom: A Floating Hope for Africa. |History: The Roadmap to the Future--Africa

Yesterday, one of east Africa's most successful companies, telecommunications firm Safaricom, was floated on Kenya's Nairobi Stock Exchange, the stock market's largest flotation to date.

Safaricom, previously a joint venture of the Kenyan government and the British company Vodafone, had a profit of some $370 million in 2007, and is the largest cellphone service provider in Kenya. Across Africa, the cellphone industry and telecommunications are booming, in part due to lack of phone lines and the difficulty of putting in infrastructure in the continent because of war and terrain. Safaricom's willingness to sell service by the second was also a wise decision in impoverished Africa.

At the IPO, an initial twenty-five percent stake in the company was on offer, distributed among ten billion shares for sale. After a day's trading, shares grew by 60% over their original price, and Safaricom shares now comprise a huge 40% of the Kenyan stock market.

This was a big story for Kenya, and Africa. The Kenyan President was at the IPO to signal the start of trading. Already, the government has made some $818 million from the sale. As shares will be cheaper for Kenyans to buy than for foreigners, many poor Kenyans have become first-time shareholders, and now have a stake in Safaricom's, and Kenya's, economic success. And the IPO has put Kenya in the news for more respectable reasons than violence and corruption. Kenya--and Africa--could use some PR for a change.

Africans themselves seem hopeful about the IPO and what the offering entails for Kenya and Africa.

Finally, foreign interest--and foreign direct investment--in Africa is beginning grow more, and in fields other than non-renewable commodities such as metals and gems and other minerals. Safaricom is in the services sector, and relies on human capital, which Africa has in abundance. Investors are starting to see Africa as a more attractive, and less risky, place in which to invest their money. Across Africa, GDP is growing by around 6% per annum, although much of this is still due to high commodities prices, such as for Nigerian oil.

Yet still, Safaricom's impressive first day on the stock market could be one of the first signs that Africa's development is about to kick off and into high gear.

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