A month after Kenya’s M-Kopa lost a $6.8 million tax appeal, the company is now preparing to enter the Ugandan market with smartphones produced in Kenya, aiming to reduce costs and expand its regional footprint.
Following a recent trial shipment of 1,000 devices, M-Kopa’s Kenyan-made smartphones are positioned to replace the Chinese-manufactured devices the company currently imports for its Ugandan operations.
The shift to Kenyan-made devices is expected to help M-Kopa lower operating costs due to East African Community (EAC) trade regulations, which exempt goods manufactured within member states from import duties.
“Selling the Kenyan-made devices in Uganda will reduce the import duty that we pay for the phones, cutting costs by 5-7 percent, which will eventually benefit our customers,” Martin Kingori, M-Kopa Kenya’s general manager, said.
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Since early 2023, M-Kopa has locally assembled over 1.5 million smartphones, driven by Kenya’s government-backed initiative to promote local manufacturing in information technology.
The company produces two primary smartphone models, X2 and X20, sold on a pay-as-you-go (PAYG) and buy-now-pay-later (BNPL) basis.
However, to meet rising demand in Kenya and scale for Uganda, M-Kopa plans to increase production and expand its workforce at its Nairobi assembly plant by 66%, from 300 to 500 employees, by January 2025.
The expansion to Uganda also brings new incentives for customers, including device protection, free data, and medical insurance.