Safaricom has announced its intention to establish a smartphone assembly factory in Kenya, aiming to produce more affordable devices. The company plans to assemble approximately 1.2 million to 1.4 million smartphones per year, positioning itself as a key player in the realization of President William Ruto’s vision of manufacturing Africa’s most economical gadgets.
During a session with the National Assembly’s Finance and Planning committee on Tuesday, Safaricom vehemently opposed the proposed taxes on mobile phones outlined in the Finance Bill of 2023. The telecommunications giant argued that these taxes would hinder their ability to achieve the target price of a $50 smartphone (Ksh6,900), as they would raise the cost of locally assembled smartphones to Ksh11,500 ($83).
Safaricom Reveals Plan To Set Up Smartphone Factory
Safaricom’s Head of Venture, Karanja Gichiri, emphasized the need to address import, excise, and output VAT (Value Added Tax) in order to realize the President’s vision of an affordable $50 phone. Gichiri urged the Members of Parliament to consider these factors, stating that by addressing them, it would be possible to save Ksh4,000 ($28.99) and lower the cost of locally assembled smartphones from Ksh11,500 to Ksh7,500 ($54.35).
Gichiri revealed that Safaricom is currently working on establishing an assembly line in Kenya. However, the proposed taxes would render the project economically unfeasible.
“At present, we have one local assembly line that recently commenced operations. The most expensive component of a smartphone is the microchip responsible for running the 4G network. We have identified suitable suppliers, and the cost of a good phone based on the chip and components stands at $40 (Ksh5,520),” Gichiri explained.
He further added, “Following that, the assembly of the phone would cost Ksh300 ($2.17), including factory profit margins. Our aim is to pass on these cost benefits to the consumers.”
Safaricom’s initiative to establish a smartphone assembly line in Kenya aligns with their commitment to making mobile devices more affordable for the general population. By addressing tax concerns and streamlining production costs, the telecommunications company hopes to contribute to the realization of President Ruto’s vision of accessible and cost-effective smartphones in Africa.
