The digital economy in Kenya is expected to generate KSH 662 billion in GDP by 2028, according to the most recent GSMA research, Driving Digital Transformation of the Economy in Kenya.
This growth, driven by strategic policy reforms, will accelerate digitalization in critical sectors such as agriculture, manufacturing, transport, and trade.
In addition to these advancements, the report forecasts the creation of 300,000 new jobs and an increase in tax revenues by KSH 150 billion.
Kenya is already firmly established as a pioneer in digital innovation and mobile banking services.
Digitalization has been acknowledged by the Kenyan government as a vital component of its economic strategy.
The Bottom-Up Economic Transformation Agenda (BETA) and Kenya Vision 2030 emphasize the importance of integrating digital technologies into important industries to propel growth.
As a major source of economic growth, government revenue, and socio-economic development, Kenya is concentrating on digitization in order to maintain its economic momentum, diversify the economy, increase productivity, and create high-quality jobs, especially for youthful and rural people.
Alongside the report on Kenya’s digital economy, the GSMA has launched the Digital Africa Index (DAI), a comprehensive tool that assesses digital adoption and usage across Africa.
The DAI is designed to support policymakers in identifying areas of improvement to accelerate digital transformation.
With Kenya among the top performers in Africa, the index highlights the importance of progressive policy and regulatory frameworks, which have facilitated Kenya’s leadership in mobile broadband adoption and innovation.
The potential for expansion throughout Africa is further supported by the Digital Africa Index, which places Kenya and a few other African countries above 50.
In addition to providing benchmarks for nations looking to strengthen their digital economies, the DAI and its companion Digital Policy and Regulatory Index (DPRI) assist in identifying policy bottlenecks.
The GSMA’s report on Kenya’s digital economy highlights the transformative potential of digitalization in key sectors that account for 58% of Kenya’s GDP.
The adoption of digital technologies across agriculture, manufacturing, transport, and trade is expected to significantly contribute to GDP, create hundreds of thousands of jobs, and generate substantial tax revenues by 2028.
The mobile ecosystem generated KSH 212 billion in government income and KSH 1.2 trillion in Kenya’s GDP in 2023.
The GSMA points out that there are still large gaps, and filling them will call for audacious legislative measures that boost demand, lower supplier costs, and promote investments in digital services, telecom infrastructure, and mobile money services.
With 99% of the population served by 3G and 98% by 4G, Kenya has made great strides in increasing the coverage of mobile networks.
There is a sizable utilization gap, though, as only 33.5% of people utilize mobile internet at the moment.
According to the GSMA’s reports and the Digital Africa Index, this disparity may close from 63% to 46% by 2028, adding more than 1.5 million additional users to the online population and greatly increasing the use of mobile money.
GSMA’s supplementary paper, “Barriers to Smartphone Adoption:
Kenya Case Study,” examines how improving smartphone cost and accessibility could further improve digital inclusion in addition to the more general findings on digitalization.
Even with Kenya’s wide mobile service, many people still find it difficult to acquire smartphones because of their exorbitant cost.
By 2028, millions more Kenyans might have access to mobile internet services thanks to the report’s suggested policy changes, which include tax breaks and more alternatives for financing devices.
Enhancing smartphone accessibility would promote greater financial inclusion by increasing the number of active mobile money accounts and reducing the gap in internet usage.
To fully realize the potential of digital transformation, the GSMA publications provide the following important policy recommendations:
- Reducing industry-Specific Taxes: To encourage infrastructure investment and lower consumer costs, telecom industry taxes should be lowered.
- Simplifying License Renewals: Quickening the renewal procedure to promote network growth and offer predictability.
- Enhancing Device Affordability: Putting policies in place to lower the cost of smartphones and other internet-enabled devices for households with lower incomes.
- Promoting the Development of Digital Skills: Ensuring that the populace possesses the digital skills required to optimize the advantages of digitization.
- In terms of increasing mobile coverage and services, Kenya has achieved impressive progress, according to GSMA’s Head of Sub-Saharan Africa, Angela Wamola.
- But there are still significant gaps. To increase demand, reduce supplier prices, and encourage investment in digital infrastructure, bold legislative measures are required. Such actions hold potential.
These actions promise wide-ranging advantages beyond mobile, boosting productivity in every industry and creating a plethora of job prospects for Kenya.
