Safaricom 2018 Sustainable Business Report

10 INTRODUCTION OUR BUSINESS OUR MATERIAL TOPICS STAKEHOLDER ENGAGEMENT 2018 SUSTAINABLE BUSINESS REPORT MESSAGE FROM THE CHAIRMAN A VISION OF BUSINESS-LED SUSTAINABLE DEVELOPMENT It is my pleasure to present to you our 7th annual sustainability report. This year, we renamed it the Sustainable Business Report to better reflect our belief in the commercial importance of sustainable development. Sustainable business make good business sense not just because it results in profit, but more importantly, uplifts communities. One of our objectives is to position sustainability as a business response to the challenges we face as a society. We still have much to learn, of course, but the process of establishing how our commitment to sustainability fits within our business strategy has helped us recognise that commercial, business-driven approaches are required to create the lasting economic growth needed to address social needs and empower communities. It's fair to say that 2017 was a challenging year for businesses in general, driven by the uncertainty of a protracted electioneering period and subdued economic growth. For the first time in three years, economic growth slowed to 4.9 per cent. The credit market also recorded its slowest growth in 14 years, attributed to interest rate capping and reduced economic activity compounded by drought, which hindered agricultural productivity and resulted in inflated food prices. REGULATORY CONCERNS The last year was also marked by changes in the regulatory environment that were reason for significant concern, specifically in regard to a draft industry study commissioned by the Communications Authority of Kenya (CA). The study, which proposed a raft of measures that remain of concern to us, including proposals such as regulated infrastructure sharing and price controls. While we remain open to interventions that benefit the Kenyan consumer, we have expressed our strong opposition to those that will limit the ability of operators to compete on price and innovation. In light of these developments, we continue to engage the regulator, Ministry of ICT and other relevant stakeholders in pursuit of a more considered outcome that will lead to a win-win result. INNOVATION AND COMPETITION The ICT industry continues to be a vibrant, innovative contributor to Kenya's economy, with new entrants expected to keep it competitive and exciting in the months ahead. Innovation remains a key ingredient to success in this market, a factor that has not only earned Kenya the honour of being recognised as an African innovation hub, but one that continues to power the engine of economic growth. According to the Economic Survey 2018 report published by the Kenya National Bureau of Statistics, the ICT sector expanded by 11 per cent in 2017, supported mainly by growth in the digital economy, mobile telephony, e-commerce and online trading among others. “Commercial, business-driven approaches are required to create the lasting economic growth needed to address social needs and empower communities.”