ICT sector records first growth fall since Covid

Ministry of Information, Communications and the Digital Economy Cabinet Secretary Eliud Owalo.  

Photo credit: File | Nation Media Group

The information and communication sector posted a 7.8 percent growth in the first quarter of 2024, down from 9.5 percent the previous year, marking its first slowdown in growth since the Covid-19 pandemic.

Data from the Kenya National Bureau of Statistics (KNBS) shows that the sector has been on a consistently accelerated year-on-year rise since March 2021 when growth stood at 5.1 percent before rising to 8.1 percent during a similar period in 2022.

The slowdown in ICT growth mirrors an overall sluggish growth in all other economic sectors in the review period except banking. Kenya’s economy grew at a slower pace of five percent in the first three months of 2024 compared to 5.5 percent in the same period last year, in a period when the business environment was roiled by high interest rates.

KNBS data shows that all the sectors, save for finance and insurance activities, recorded slower growth in the first quarter of this year compared to the same period in 2023 pointing to a tough macro-economic environment.

ICT services are a catalytic backward and forward linkages across all other commercial segments and a slowdown in the sector gives a pulse on the state of the economy. For example, it supports financial services in aspects such as money transfers, e-commerce at nascent stages, improved public service in the case of e-government as well as human capital development through e-learning.

The deceleration comes despite aggressive State efforts to spur a national digital revolution through a raft of infrastructural and skill-development programmes.

Among the ongoing projects include the five-year scheme to lay down at least 100,000 kilometres of the national fiber optic cable, setting up 25,000 free Wi-Fi hotspots in major markets and trading centres across the country as well as establishing a digital hub in each of Kenya’s 1,450 wards.

The ICT sector gained massive traction in the wake of the Covid crisis as the population shifted en masse from in-person interactions as part of government-backed measures aimed at containing the spread of the deadly virus.

The pandemic, for instance, propelled the enhanced provision of an array of services in computing and communication as witnessed through the surge in demand for fixed internet as people heeded to government calls to work from home as well as schools adopting e-learning.

Since then, Kenya has continued to report significant progress in the digital transformation space at the global level with novel breakthroughs ranging from innovations in real-time data collection and management, to cybersecurity support systems as well as big data management.

Experts have called on the government to fast-track investment in complementary services such as access to quality power supply and internet. 

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