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Kenya's digital economy Is the next frontier of growth and opportunity

Opinion
 ICT Cabinet Secretary Eliud Owalo during the official opening of Konza Digital Skills Laboratory at Kenya Coast National Polytechnic in Mombasa on August 7, 2023. [Omondi Onyango, Standard]

Ongoing assessment of the Kenya Kwanza government’s first year in power, allows us to take stock of the Digital Superhighways' contribution to the socio-economic transformation of Kenya, under the leadership of President, William Samoei Ruto.

Kenya's Digital Masterplan 2022-2032 recognizes infrastructure as the foundation upon which all Information, Communication, and Digital Technologies and any progress emanating therefrom are anchored. It is for this reason that under the Infrastructure Pillar of the plan, the government embarked on laying 100,000 kilometres of fibre-optic cable countrywide, including to unserved and under-served regions.

The aim is to connect an estimated 8.5 million homes and businesses, 1,450 wards, 400 police stations, 13,000 health facilities, 40,000 public schools, markets, and other public institutions in the next five years. Without Digital Infrastructure, Kenya cannot benefit from the Fourth Industrial Revolution and the disruptive technologies and trends such as the Internet of Things (IoT), robotics, virtual reality (VR), FIN-TECH, e-commerce, 5G technologies and artificial intelligence (AI) that are the new frontier for economic transformation globally. 

Working with partners in the private sector over the last 12 months, I am pleased to report that the MIC-DE has successfully rolled out an additional 8,419 Km of fibre-optic cable countrywide. Expanding our fibre optic cable network is a significant precursor to our digital transformation journey.

Having recently negotiated World Bank Funding for the Kenya Digital Economy Acceleration Program (KDEAP) Worth $570M and additional funding worth Sh5B from the Universal Service Fund to support our programs, we expect to add another 10–15,000 Kms to the NOFBI in the next year.

To realize the full utility value of the NOFBI, it must bring socio-economic transformation to citizens by opening up opportunities for job creation, support business, e-commerce, education, innovation, access to online and GoK e-services, e-health, e-agriculture, and the creative economy while also spurring inclusive growth.

This requires providing internet connectivity to the people via last-mile connectivity, which connects the main backbone and the users.

Consequently, the government, partnering with the private sector ISPs, is installing 25,000 free public WIFI hotspots in public places countrywide, providing affordable internet connectivity to millions of Kenyans. So far, the MIC-DE has installed 518 Free WIFI Hotspots countrywide. This is bound to expand exponentially as we expand the NOFBI network.  

The uptake and subsequent benefit from this ICT Infrastructure and its inherent technologies is directly proportionate to the ICT literacy of the users. Our Digital Masterplan emphasizes investing in the acquisition of digital skills to optimize digital opportunities and socio-economic transformation.

Over the past 12 months, the MIC-DE has provided connectivity to 116 educational institutions, primarily TVETs and, equipped them with 11,400 internet access devices, and trained 390,968 individuals through the Jitume and Ajira programs. This has registered a tremendous success rate, with 119,462 youths gaining employment in digital and physical ICT-related jobs through this intervention. 

To further enhance access, promote innovation and use of emergent digital technologies, and offer ICT literacy, we propose to establish 1,450 digital innovation hubs, one in each ward.

To date, we have successfully set up 247 hubs with access to high-speed internet and learning centres with a capacity for 30 - 100 cohorts, workstations, innovation labs, Wi-Fi hotspots, and co-working spaces.

These hubs can potentially train 300 youths and create a corresponding number of digital jobs at a minimum, giving an average of 1,500 digital jobs per constituency. The MIC-DE has been working with Members of Parliament to amend the NG-CDF Act to enable the utilization of CDF for OPEX sustenance of the hubs. I’m pleased to report that Parliament has already passed the amendment and is now awaiting assent.

Thanks to enhanced connectivity and access, in the past 12 months, the MIC-DE has digitalized 13,482 GoK services. Kenyans can now access GoK services from the comfort of their homes. The Presidency is also leading from the front in adopting Digital Services, and as of January 2023, all Cabinet meetings have since gone digital.

To enable citizens to access government and other digital services seamlessly and securely in both the public and private sectors, the GoK is pursuing a digital identity to facilitate the virtual consumption of government services.

We have also recently intervened in the market to facilitate inclusive connectivity and access by partnering with the private sector to facilitate local assembly and provision of affordable smartphones to MSMEs and those at the lower end of the economic pyramid. The manufacturing plant was launched by Dr Ruto on October 30, 2023, and is now producing low-cost smartphones prized at Sh7,500. 

In the media realm, the MIC-DE is already revitalizing the Kenya Broadcasting Corporation (KBC) by modernizing the TV Centre, increasing FM Radio coverage with 20 additional transmitters, and procuring new Outside Broadcasting TV and Radio vans.

Plans are also underway to upgrade the Digital Terrestrial Broadcasting Infrastructure through a partnership between the Kenyan and Spanish governments.

On revitalization of the Postal Corporation of Kenya, the corporation is undergoing restructuring to ensure efficient and optimal operations in the e-commerce and financial services space.

Meanwhile, enhanced marketing of POSTA’s services is bearing fruit. In the last year, the corporation has generated over Sh200 million in revenue through the delivery of passports nationwide.

It is also working with the Department of Immigration to offer a one-stop service when one applies for a passport. In the past year, PCK has earned Sh600 million for logistics services provided to the Government, expanded its EMS (Expedited Mail Services) offering, and increased new contracts that will see a projected increase in revenue from Sh600M in FY 2022/2023 to Sh900M in 2023/2024. It also delivers medical and related supplies to medical facilities in collaboration with KEMSA. The contract is expected to be worth about Sh295M. 

To ensure the successful implementation of its programs, the MIC-DE recognizes that it must operate within a conducive legal, policy, and regulatory framework and has either developed or progressed vital legislation in this respect.

Key achievements in this regard include the approval and the gazettement of amendments to the National ICT Policy Guidelines 2020, which removed the mandatory requirement for foreign companies investing in the ICT sector to seek 30% local shareholding and the National Addressing System Policy and Bill, among others. To further align the industry's operations to its operating environment, we have recently constituted a sector working group to review sectoral legal and policy frameworks and recommend wide-ranging changes and alignments shortly.

While a lot of work remains to be done, the progress made so far is encouraging. According to the World Bank, Kenya's ICT sector growth has outperformed every other sector, expanding by 23% annually during the last decade.

The industry is now six times larger than it was at the beginning of the decade. With citizens’ participation and support, we look forward to an empowered, digitalized and globally competitive Kenyan society. Our Digital and 24-hour economy is truly in the horizon.

The writer is Kenya’s Cabinet Secretary, Ministry of Information, Communications and the Digital Economy.

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