How digital skills will grow economy

Customers at an M-Pesa kiosk. Mobile service providers and major banks have led the ICT revolution which has eased the movement of cash and consequently of goods and services. PHOTO/FILE

What you need to know:

  • According to Vision 2030, other sectors where technology will play a big role are are agriculture, tourism, wholesale and retail trade, manufacturing and business process outsourcing.

  • The Tourism Trust Fund has also used a web portal to publicise tourism projects in Kenya through cultural centres, conferences.

Technological advances in the financial services sector is expected to help drive economic growth and make Kenya a middle income economy by 2030.

According to Vision 2030, other sectors where technology will play a big role are are agriculture, tourism, wholesale and retail trade, manufacturing and business process outsourcing.

In the financial services sector, millions of Kenyans today have access to banking services thanks to advances in ICT.

Mobile service providers and major banks have led this revolution which have eased the movement of cash and so therefore of goods and services.

Kenya Commercial Bank, Kenya’s biggest bank has led the industry’s technological revolution that has among other things enabled the lenders to offer branchless services as well as move to the mobile banking platform.

Long gone are the days when bank clients had to travel long distances to queue in banking halls for hours.

Today, they can transact from their mobile phones from the privacy of their homes.

Even in rural areas, banking services are available via agents of major banks.

In 2008 KCB raised the bar in technology-assisted banking when it invested in a new technological platform to support its regional business and expand its product offering.

Increased efficiency gains derived from the new platform, for instance, enabled the bank to increase in the number of customers a single staff member can serve and ultimately easing congestion in its banking halls.

Today, KCB has more tan 5,000 agents spread across the region that serve millions of its customers.

The Kenya Public Broadcasting Survey report 2011, says ICT has been the catalyst behind all these sectors.

ICT on its own has outperformed all other segments of the economy over the last decade.

For instance, according to the Ministry of Devolution and Planning, ICT has boosted the country’s average growth over the last decade from 2.8 per cent to 3.7 per cent.

It is therefore not surprising that other sectors have created linkages with it to boost their success stories. This is partly to do with the 1999 liberalisation of the telecommunication sector in Kenya.

Mobile phone operators

ICT here refers to tools that facilitate the collection, analysis and storage of information technologies, which include computers, internet, mobile phones, e-mail and the web.

The entry of mobile phone operators such as Safaricom and Airtel has seen them provide a variety of ICT services in various sectors such as agriculture, tourism and trade.

In agriculture, the 1997 partnership of Safaricom Limited and a private sector company, the Kenya Agricultural Commodity Exchange (KACE) started a short message service (SMS), Sokoni, to provide timely agricultural information between buyers and sellers of agricultural products.

According to Sailesh Chutani’s book, Technology at the Margins, published in 2010, KACE collects information on prices from agricultural information kiosks, where buyers and sellers meet. KACE then sends the prices to interested farmers, buyers and exporters through SMS at a low cost of Sh7.

According to, SMS Sokoni has thus enabled Kenyan farmers to triple their earnings due from the information they get, often on potential buyers and prices. Furthermore, Safaricom Limited has extended the accessibility of SMS Sokoni to farmers, thus contributing to its popularity.

There are other ICT agricultural applications that are just as useful, including M-Farm, DrumNet and Virtual City.

In retail and wholesale trade, e-commerce has overcome barriers that had previously faced many entrepreneurs.

These forms of trade are mainly undertaken by Kenya’s informal sector, which the 2013 Kenya Economic Survey estimates to comprise 89.7 per cent of the population.

These are people who often have problems starting businesses because of their inability to access loans from the mainstream banks.

Payment service

However, according to Dan Radcliffe in his 2013 paper, ‘Mobile Payments Go Viral,’ M-Pesa in Kenya, this population is the target of ICT services such as Safaricom’s payment service.

Launched in March 2007, M-Pesa is a retail payment platform that reaches many people both in Kenya and abroad.

By 2009, it had transferred over Sh9 billion through the system. M-Pesa reaches the underserved market – unable to benefit from the banking industry. These are the poor masses.

With their phones, retail and wholesale traders can deposit and withdraw cash from their accounts as well as transfer funds to others, pay various bills and access small loans through M-Shwari.

It is for this reason that M-Pesa has continued to receive support from banking regulator Central Bank of Kenya (CBK).

Though the banking industry in 2008 had sought to close it down, CBK argued that since it is able to comply with the regulator’s demand that Safaricom deposits its customer funds with it, M-Pesa was able to continue.

Currently, the service is being used by 75 companies who need to collect payments from their customers and undertake bulk payment distribution.

Just like wholesale and retail trade, tourism has benefitted from ICT through e-commerce.

For instance, airline carriers such as Kenya Airways conduct business through electronic tickets for domestic and foreign tourists who want to visit the country.

ICT activities include the annual East Africa e-tourism conference, social media and e-ticketing.

The Tourism Trust Fund has also used a web portal to publicise tourism projects in Kenya through cultural centres, conferences.

The 2017 Kenya National ICT Master plan envisions a situation where mobile phone applications, games and services can be used to enhance the profile of the tourism sector.

The master plan also envisions a situation where ICT and the broadband infrastructure can reach new tourism markets and deliver exceptional experiences.


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