A traditional view of development is very linear, where a country is expected to go through each stage of the industrial revolution one by one before starting with the next phase, however, newly developed countries have the benefit of being able to adapt their infrastructure to the most recent developments and innovations, allowing them to quickly catch up and gain a solid position in the global market. Industry 4.0 is one example of such developments, where newly developed countries already have a population that has a high level of ICT skills, especially those who live in urban centers.
Across Africa, countries are fully embracing ICT as an economic sector. While some areas in Eastern and Middle Africa are still behind, other countries have significantly higher levels of internet penetration, especially in urban centres across Nigeria and South Africa and Kenya.
It should not surprise anyone that Kenya is one of the leading digital economies in Africa, as it is actively leveraging the ICT to build its economy and empower its citizens. Interestingly all these are being done with the adequate support of the government.
Incorporating and Leveraging ICT For Accelerated Growth
The Government of Kenya has invested heavily in the ICT sector and has recognised the sector as a critical contributor to the country’s GDP. Kenya is a regional leader in broadband connectivity, general ICT infrastructure, value-added services, mobile money, and mobile banking services.
The country’s ICT sector is set to account for up to 8% of the country’s GDP through IT-enabled services (ITES) and create more than a quarter of a million jobs by the end of 2021.
In addition, Internet access has continued to spur economic growth, which contributed to the government’s development of the Digital Economy Blueprint, a framework to improve Kenya’s ability to leapfrog economic growth in the region. The document is hinged on five pillars: digital government, digital business, infrastructure, innovation-driven entrepreneurship, and digital skills.
It is also one of the few countries with a National Information Communications and Technology (ICT) Policy. The policy guidelines introduce local participation requirements in various sectors. The requirements include the following:
- For listed companies, at least 25% of their shareholding must be reserved for local investors;
- Foreign ownership of equity in various industries, such as insurance and telecommunications, is restricted to not more than two thirds and 80%, respectively, although the government gives telecommunications companies a grace period of 3 years to find local investors to achieve the local ownership requirements;
- Companies providing ICT services must have at least 30% local ownership. The 2020 ICT Policy reintroduced the requirement.
Furthermore, the Kenyan national budget allocations for FY2021/2022 has seen the government set aside $210 million to fund various initiatives in the ICT sector. These include $100 million for government shared services, $67 million for the Digital Literacy Program (DLP), $12m for maintenance and rehabilitation of the National Optic Fibre Backbone (NOFBI) Phase II Expansion Cable, $11m for installation and commissioning of the Eldoret-Nadapal Fibre Optic Cable, and $16m to fast track the development of the Konza Technopolis, Kenya’s first smart city.
All of the aforementioned has given rise to the Kenyan tech ecosystem, one of the most vibrant in Africa.
Kenyan startups raised some of the most significant funding in 2020. According to the 2020 African tech startup funding report authored by Disrupt Africa, the combined raised capital US$190 million. Fifty-nine startups increased the funding. The investment ranges from different sectors, including logistics, HR, energy, fintech, edtech, e-health, retail, and construction. Some startups that raised the funding are Twiga Foods, oKHi, Ilara Health, Pezesha, etc.
The $US190 million raised by the 59 startups made Kenya the country that attracted the most funding in 2020. A total of $US701.5 million worth of investment was made in 397 startups in 2020. It edged out Nigeria (85 startups), South Africa (81 startups), and Egypt (82) in the raise to attract funding.
This year (2021), more than 300 startups have raised more than Us$1.1 billion, according to figures from Disrupt Africa. Beyond attracting funding, Kenya has several entrepreneurial hubs supporting and incubating startups and helping them scale their innovation.
These hubs are essential to the Kenyan tech ecosystem because they provide training, advisory to startups, and they usually catalyse startups to their success. Currently, there are 618 active tech hubs and co-working spaces across Africa, according to Briter Bridges and the GSMA. Kenya has 48, including iHub. Nairobi Garage, Nailab, and Metta. Furthermore, Kenya has the most significant number of coding schools in Africa, according to Briter Bridges.
As Kenya continues to leverage ICT to drive economic growth, it can only get better for the biggest economy in Africa. Thankfully, it has the support of the government. Interestingly, ICT has offered many young Kenyans the opportunity to take up software-related jobs. Hence, there are hundreds of software engineers in Kenya. Zarttech, a social impact startup, is bridging the tech gap between the continents by removing obstacles, mitigating risk and providing access to the global market. Our Experts are from the top 15 African countries with the strongest IT pool, such as Kenya, Nigeria, Morocco, South Africa. We have hundreds of vetted and highly skilled senior IT experts from Kenya. You can call (+31 85 208 2627) or email us-[email protected] to hire one of our highly qualified senior IT experts from Kenya or other African countries.