The Kenya’s Growing Digital Economy

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When you mention leading technology countries on the African continent, Kenya will rank among the top three as a result of its advancement in the development of large-scale ICT infrastructure, broadband connectivity, and other digital services.

Often referred to as Africa’s Silicon Savannah, Kenya is the regional ICT hub of East Africa, with an ICT sector that accounts for up to 7% of the country’s GDP through IT-enabled services and has become a significant source of economic development and job creation with impacts felt across almost every sector of the economy.

As a result of the increased accessibility to Internet services among other things, economic growth in Kenya has grown exponentially such that the governments without wanting to waste such opportunities developed various blueprints to improve the country’s desire to be one of the five digital economies in the continent.

Kenya has some of the best digital legal frameworks on the continent like its ICT Masterplan and Digital Economy Blueprint, little wonder then that its economy is developing at a fast pace.

The frameworks have brought about a turnaround in the Kenyan economy and have continued to spur more growth in various sectors such that the digital economy is expected to contribute about 9.24% to the nation’s GDP by 2025 according to Africa’s iGDP Forecast, Accenture.

The major sectors driving the continued growth of the digital economy in Kenya include the E-commerce industry where firms such as Jumia are thriving, then there are Fintech services like MPESA, which has gained acceptance across both rural and urban areas in Kenya, and the Health sector with the likes of Daktari Africa and also the tech industry with numerous start-ups.

The growth in Kenya’s digital economy is supported by an increase in the number of people who have access to smartphones and internet services. Data has it that about 98% of Kenya have a SIM card while more than half of that number use a smartphone and about 65% have access to the internet, a situation that encourages financial inclusion and digital know-how.

The growing trend is also being supported by the access to digital infrastructure in Kenya which has boosted the confidence level of ordinary Kenyans in digital services and the need to embrace it.

The role of the Kenyan government in this can not be underestimated as the government has continued to invest heavily in technology while also promoting definite policies and frameworks for enabling resources and investment.

Government is at the forefront of facilitating investments and innovations in core digital infrastructure and also facilitating a thriving technology startup ecosystem.

For the Kenyan government, it believes it should be at the forefront of development hence its budgetary allocation takes into consideration funding for technological initiatives. For instance, the 2021/2022 budget made a provision of $210 million for fast-tracking various initiatives such as the development of Kenya’s first smart city, Konza Technopolis, as well as the maintenance and rehabilitation of the National Optic Fibre Backbone Phase II Expansion Cable.

In the FY2022/2023, the government set aside $132 million for ICT initiatives which included the continuous development of the Konza Technopolis/Smart city, the installation, and commissioning of the Eldoret-Nadapal fibre optic cable and the digital literacy program and ICT integration in secondary schools.

The Kenyan government has also launched a ten-year Digital Masterplan 2022 to 2032 to align with global technological advancements which would enhance the rise of Kenya’s digital city.

All these alongside investments from private entities encourage fast-growing digitalization in Kenya making it enticing to more people to get involved by the day.

While Kenya’s fast-growing digital economy is bringing in growth, there is the likelihood it can create a gap in the job market as the country might still be behind in providing the human resources needed to meet up with the growing digitalisation.

Therefore, to benefit fully from the digital economy, existing gaps need to be bridged through more investments aimed at developing and building human capital.

Such interventions can come in form of further investment in technological education, harnessing and sponsorship of tech-talented individuals as well as public-private partnerships to cover the gaps between the existing ICT edge and the projected demand by the industry in the nearest future.

Also, school curricula at all levels of education need to be reviewed to accommodate more STEM-related courses and ensure all students are equipped with basic digital skills to participate actively in a digital economy.

To further enjoy the benefits of digitization, authorities in the country must also provide financial support to SMEs, start-ups, and technology and innovation hubs to make them financially capable of meeting up with the latest machinery for production and have the leverage to compete favourably with other global brands across the world.

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