Towards a digital country: Is Kenya headed the Estonia way?

Estonia bills itself as the world’s first, and probably sole, truly digital country.

In February 2017, the Northern Europe country of 1.3 million inhabitants with an economy whose size is US$ 41.6 billion, about Sh6.1 trillion or just about half that of Kenya, launched a new generation digital identity, popularly known as the Estonia Smart ID, which today is used by at least 73,000 in signing contracts, declaring income and filing tax returns, registering companies, voting electronically and accessing financial as well as other public and private sector services.

So herculean are the leaps made through the Estonia Smart ID that the World Bank estimates that its interventions have on average scaled down the cost of tax administration to just 0.3 percent of companies’ net earnings and save each citizen 5.4 working days annually.

Kenya has ambitious plans of vaulting itself into the league of digital economies with a digital identity for every citizen being a vital piece of this much sought-after puzzle.

Indeed, the National Information and Communication Technology Policy of November 2019 identifies the provision of a universal personal digital identifier, otherwise a digital identifier, as one of the government’s priorities in the pursuit for a digital economy fit for purpose in the 21st century.

It is this ambition that led to the now abandoned National Integrated Identity Management System (NIIMS) popularly known as Huduma Namba under President Uhuru Kenyatta’s Jubilee administration.

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On August 14, 2023, the Kenya Kwanza government entered a memorandum of understanding with the United Nations Development Programme (UNDP) for the rollout of a unique personal identifier now known as Maisha Namba slated for formal launch on October 2nd, 2023.

“Maisha Namba will be a unique personal number assigned to each individual and that will be the personal identity number from birth to death. Maisha Card (3rd generation ID) will be the document that will bear the Maisha Namba and will replace the current second-generation ID. The National Master Population Register will consolidate existing and independent databases into a single integrated register”, the government stated following its MOU signing with UNDP.

I’m attending the 2023 edition of Tallin Digital Summit in Estonia and seeking to answer the question, is Kenya headed the Estonia way? A few things stand out.

If there is something Kenya can borrow from Estonia in the journey towards a digital unique personal identifier is to put one’s money where their mouth is.

Every year, the size of Estonia’s public spending that goes towards the state-led digitisation agenda is one percent of its Gross Domestic Product (GDP). This means that in 2023 for instance, about US$416.0 million or just about Sh60.7 billion, is dedicated towards this exercise.

A lot of this financing is dedicated to building resilience against attacks in the digital system, bolstering cyber security and therefore strengthening the public’s buy in the adoption of the agenda with the confidence that their personal data is safe with due regard to all data protection and security measures.

“We have built a thriving innovation economy that tops the charge for digital government, cyber security and internet freedom. To mitigate potential threats, we must all focus on increasing our resilience and adapt to the rapidly evolving security environment. Estonia nearly doubled its annual cyber security budget alongside the commitment to spend 3.0 percent of our GDP on defence overall”, Estonia’s Prime Minister, Kaja Kallas said during her keynote address at the Tallinn Digital Summit.

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Another key lesson from Estonia’s experience is that policymakers need to be ready to take unpopular decisions that are aligned with the long-term agenda of building a digital country. Estonia’s first agenda in building a digital country was the push for cashless payments within the economy. Not only did this provide the government with a war chest of data regarding citizens but also created an avenue for stronger domestic revenue mobilisation through formalisation of businesses that previously sat outside the taxman’s radar.

“In 1994, the government took a decision that each and every salary must be paid into a bank account. It was not easy, but political leadership means that sometimes you will have to lose the next election. I am sure if we had not reacted very quickly when we became independent and forced people and companies to bank and go off-cash”, Estonia’s President for the period 2016 to 2021, Kersti Kaljulaid said.

Kenya is certainly making strides towards this same route. The Sh27.0 billion per day mobile money payments ecosystem has offered an avenue through which the vast informal economy is gradually being roped into formal financial inclusion. Recent amendments through the Finance Act 2023, notably mandatory electronic tax invoices for any expenses to be deemed eligible for recognition as income tax deductible spending by the government, point towards this direction.

These efforts notwithstanding, there are sceptics within Estonia who hold that the system is not as foolproof as the state postures it to be and a lot more needs to be done to secure personal data. Incidences of data breaches still riddle the system.

“A matter that came up a month ago is how the government uses our data. The notion is that we can always sign into the state portal and take a look at the agencies looking at our personal data. We had a scandal I would say and it came out that you actually cannot see all of the data that agencies have looked at”, says Ronald Liive, a journalist at Geenius Media in Estonia.

This flaw notwithstanding, Estonia offers a case study of just how data harnessed through a unique personal identifier can help the government in being proactive as far as interventions especially those targeted at the vulnerable in the society are concerned. Such interventions would have been a game changer in the wake of Covid-19 when a new class of vulnerabilities emerged following the disruption precipitated by shutdowns and loss of gainful employment.

“We have a few pilot proactive services. Retired persons get a top-up from the state to their pension in this country if they live alone. This because the heating cost is high and they live alone. This service is totally based on data analysis, many citizens don’t even know it exists. We know they are retired; we know they live alone; we know their bank account number because we look at their pension and then we just top up”, Kersti Kaljulaid says.