This archive report was first published on 11 September 2019.
Published on September 11, 2019, a study by the Institute for Business in Global Context (IBGC) has highlighted the need for Kenya to improve its tech sector. Despite making significant gains in technology, the country still lags behind in several areas.
Kenya's success with M-Pesa, a mobile payment system, is a notable achievement, but the country still has a long way to go in terms of digital money. The study found that cash accounts for 71% of Kenya's total payments, indicating a significant opportunity for digitization.
The report, titled The African Leapfrog Index, surveyed six African countries, including Kenya, Rwanda, Egypt, South Africa, Nigeria, and Ethiopia. While Kenya has made significant progress in digital change, with over 80% internet penetration, it still needs to improve its education and skill-building capacity to enhance its ability to grow higher-skilled digital services jobs.
According to the report, education, digital skills, and healthcare must be prioritized. A Kenyan born today is likely to achieve at most 52% of their potential if they survive to adulthood given the shortfalls in the education and health systems.
Other areas where Kenya needs to improve include investments in basic infrastructure, which would reduce power outages and other disruptions, as well as build on overall reliability. Barriers in the value chain, such as lack of credit, user experience issues, and informal economy challenges, should also be addressed.
The report found that agriculture and food & beverage sectors offer the best opportunities for growth. Despite its leadership with M-Pesa, there is still enormous potential for the digitization of payments.
Kenya's mobile phone penetration is also a notable achievement, with over 70% of Kenyans having a mobile money account, and over 75% of Kenyans aged 15 plus having made a mobile payment in the last year.
“During the past decade, Kenya has advanced quickly as a digital contender, with many innovative enterprises, e.g. M-Pesa, Ushahidi, M-Kopa, M-Tiba, etc. 200 digitized services are offered through Huduma Centres countrywide as well as an online self-service platform, E-Citizen,” IBGC said.
