Deepening participation in Kenya’s digital economy


What you need to know:

  • Digital connectivity has made our lives so much easier compared to the olden days.
  • Digital empowerment is a vital part of raising the population and positioning people to benefit from inventions.
  • There is still much more that the country can do to deepen its citizens’ participation in the digital economy.

Cash at your fingertips, taxi ride, friends’ hangouts, news, gossip, shopping and even the office meetings are now a few taps away on your phone. There is a phenomenal change in how we live as the phones (and laptop computer) become central command centres of our lives. The amount of information the gadgets can hold and the places they can take users through links and applications is mind boggling.

Of greater importance is how digital connectivity has made our lives so much easier compared to the days we walked to the streets to hail a taxi, paid for the same in cash from the wallet, bought concert tickets at the gate and queued at the banking halls to check bank balances and do a myriad of other transactions and went to the post office box to collect letters from the pigeon hole.

Critics argues that the digital space has taken over and made us too busy and anti-social and invaded our privacy like nothing ever before. Nevertheless, the advancements and inventions that are making life easier have been embraced throughout the world.

Digital empowerment is a vital part of raising the population and positioning people to benefit from inventions. Apps that can predict the weather identify livestock diseases and link farmers to buyers enable and empower farmers. Apps that help youth promote their inventions; technical skill, music and art have created formidable personal brands and provided a source of income in the digital space.

Even as Kenya continues to set a blistering pace in facilitating access to digital infrastructure there still remains gaps. It is among the top African nations with deep internet, mobile penetration and a pioneering one of a kind mobile money transfer.

65 percent of Kenyans over the age of 15 have access to the internet, 98 percent older than 15 years own a SIM card, 52 percent own a smartphone and 94 percent of people older than 15 years use mobile money. This is according to Dalberg’s nationally representative survey Kenya’s Digital Economy: A People’s Perspective.

This backbone, combined with Kenya’s adoption of regulations to boost technology and innovations, has attracted start-ups to the sub-sector and provided innovators with a suitable environment to test new digital products and services. This has led to an exponential growth of the country’s digital economy.

Kenya’s Digital Economy Blueprint anticipates that in future, tech-driven start-ups will leverage digital innovation to maximise economies of scale and capitalise on the net effects of digital products or services to strengthen the country’s competitive edge.

Agri-tech such as DigiFarm, Twiga Foods; E-commerce such as Jumia, Copia, Jiji, Sendy, Safeboda; financial products for savings and credit such as M-Shwari, M-Kesho, Branch, Tala; Ed Tech such as Eneza and many other services are increasingly benefiting individuals and businesses. The country continues to experience an upsurge of services from mobile-money-enabled internet of things (IoT), which is accelerating digital transformation.

There is still much more that the country can do to deepen its citizens’ participation in the digital economy. The digital space is proving to be an emerging serious contender in job creation with Kenya’s unemployment rate standing at 10.4 percent, according to the latest data from Kenya National Bureau of Statistics.

According to the study’s data, Kenyans are receptive to embracing the use of digital goods and services and a majority of citizens (84 percent) are experiencing improvements in their lives as a result of digital usage.

The widespread use of mobile money suggests their willingness to deepen participation in the digital economy. Although we cannot make assumptions about whether this desire to extensively use mobile money would equally translate to high demand for other digital financial services, it is plausible to conclude that they would want to deepen their use of digital services for business and livelihoods if the services were relevant to them.

The study reveals the next opportunity space for expansion of the digital economy, by identifying the services people use and highlighting the segments of the population who are using them. For instance, while nearly half (44 percent) of self-employed people/business owners use digital services to support their businesses, they do not necessarily use them for advanced use.

Eighty six percent of the same groups use these services to communicate with customers and vendors and only 15–18 percent use advanced technology to keep business records and track stock. They are going further to use digital platforms to register businesses, pay taxes, levies, sell products and buy supplies through e-commerce platforms.

By understanding how and why people use (or do not use) the digital services that are theoretically available to them, stakeholders can gain insight into challenges that are limiting the pace of growth of the digital economy. To enable deeper usage of digital for livelihoods and business, a critical next step will be to continue investments in enabling resources to address the challenges that are currently limiting its use.

With frequent multi-sectoral research coupled with support services from government, Kenya’s digital future is undoubtedly bright. The next few years hold a lot of promise for its continued growth.

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Note: The results are not exact but very close to the actual.