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How ICT drives Kenya’s economic growth

COMMENTARY
By Joe Ogutu | May 18th 2015

NAIROBI: Over the last decade, Kenya has experienced substantial growth in ICT, with the period between 2013 and 2014 seeing up to 8.4 per cent improvement in this sector. According to the 2015 Kenya Economic Survey, the ICT sector in Kenya was worth Sh138 billion in 2014.

Since 2000, Kenya's economy has grown at an average of 3.7 per cent. Without ICT, this growth would have been at 2.8 per cent and per capita income would have stagnated. During the first decade of the 21st century, ICT was responsible for the growth of approximately one-quarter of Kenya's GDP.

Kenya has been ranked among the top five African countries with the fastest growth in telecommunication, infrastructure and mobile money innovations. The engine behind the rapid growth has been mobile telephony which has caused a mobile revolution in the country. Mobile penetration in Kenya is currently at 82.6 per cent with 33.6 million subscribers, proving that the mobile phone is fast becoming an important tool in transforming lives.

ICT plays a large role in our day-to-day lives, addressing challenges facing Kenyans in general. Particular sectors such as finance, health, education, agriculture and the Government are quickly embracing technology for dissemination of information, enhancement of service delivery and to reach their customers more effectively and efficiently.

The financial inclusion agenda in Kenya has borne positive results with two out of three adult Kenyans being part of the formal financial ecosystem. The growth of M-pesa in the country has driven change in the business model of most financial institutions in the country. Mobile money agents represent three-quarters of the total financial access points in Kenya and are a major driver in bringing financial access points closer to the population.

In the health sector, ICT is used to provide health tips and improve access by the general public to quality healthcare. ICT is also used to improve procurement and distribution of medicine and medical supplies as well as to monitor and encourage attendance of mothers at ante-natal and post-natal clinics, particularly among pastoralist communities.

In education, ICT enables more children to affordably access learning content. This area has huge potential for growth in enabling online education and facilitating massive and open online content.

The agricultural sector is also rapidly adopting the use of ICT. Already, ICT is being used to monitor distribution of fertilisers and to disseminate information to farmers on how to increase yields and access markets through the use of mobile devices. The Government has identified the potential of ICT in driving the economy and has embarked on several transformative ICT initiatives. The launch of Huduma Centres as one-stop shops that aim to provide a wide range of services demonstrate how ICT can be leveraged to substantially improve public service delivery.

The private sector in partnership with the Government has also played a critical role in driving some of the projects including the use of mobile payment platforms to collect government revenue such as e-citizen and e-jiji pay.n The digital economy holds huge potential for growth, so ICT will be expected to play an increasing role in affording opportunities to the youth of the country to play an active role in the sector.

However, ICT development faces many challenges, including inadequate infrastructure and high costs, lack of skills, insufficient financing, coping with global competition and IT security problems.

Nevertheless, through private sector and government participation via financing or technical assistance, these challenges can be overcome to allow Kenya sustain and build on its position as one of Africa's top ICT hubs.

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