Kenya: The African ICT Hub Aspires to Global Status While Its Dynamic ICT Start-Ups Proliferate

So many ICT projects and initiatives…

Here I am sitting at my desk, preparing a blog on Kenya’s remarkable information and communication technologies (ICT) sector. And I’m sitting with a flood of recent developments. The Kenyan mobile network operator is planning a new smartphone factory in the country. The government announces that the national fibre optic cable roll-out programme will extend over 100 000 kilometres. The Konza Technopolis technology park develops further. And there are many more such projects.

Government’s big plans for the future…

The project that arguably drew global attention to Kenya’s rapidly developing ICT sector was the M-Pesa mobile-based money transfer service launched in 2007 by Safaricom of Kenya and Vodafone of the UK.  Much has happened since. ICT already contributes 7% of the country’s GDP. Now the Kenyan government is announcing ambitious plans that it hopes will make the country not only an African regional ICT hub but a global centre too.

In 2022, the government announced its ten-year Digital Masterplan and the latest budget has allocated just over US$ 130 million for ICT initiatives. ICT growth is a main component of the Vision 2030 national development programme.

The Kenyan digital economy cabinet secretary has declared that all government services will be digitalised over the next six months; that 25 000 state-funded hotspots will be installed over the next five years; that the national fibre optic cable programme will connect some 8,5 million electricity-powered homes; and that this programme will reach the country’s 29 000 market centres. There is a particular emphasis on the digitalisation of government services, and ensuring that schools have internet facilities.

Kenya is undoubtedly East Africa’s regional ICT hub…

Estate agents often say that “Location makes all the difference.” This truism is equally relevant for companies wishing to expand their business in Africa, and those attempting to identify the most suitable location for regional coordination and impetus. Microsoft is one of the major corporations that chose Nairobi as the East African headquarters for its African Development Centre for provision of cloud services to the region. Prioritisation of target markets in Africa and choice of regional offices is an important, often-posed question that I have had to assist clients with over the years.

Kenya is at the heart of regional ICT programmes. The East African Community and the World Bank are developing the East Africa Regional Digital Integration Programme. The East African Community is also driving its One Network Area regional digital integration initiative.  

The MTN GlobalConnect East Coast Project is a high-capacity terrestrial fibre network that connects Kenya to Tanzania, Ethiopia, Somalia, South Sudan, and Uganda through data centre hubs. It is also connecting East Africa with West Africa. Six subsea cables currently land in Kenya and this enhances the country’s ability to play the role of regional communications hub.

Safaricom of Kenya led the consortium which was granted a license to operate telecommunications and mobile money services in the large and lucrative Ethiopian market.  Kenyan ICT companies are particularly active in other East African countries, but are also present in other African regions.

But there are future challenges too…

In early 2023, Kenya recorded almost 18 million internet users in a population of around 55 million. The number of mobile subscriptions stands at about 65 million, with many users maintaining two or more devices. However, while mobile phone penetration is high, there is still insufficient infrastructure. Some areas (especially in the north), are without service, or are under-serviced. Smartphone usage can also be improved.

Despite the presence of many ICT companies in Kenya, these companies still complain of a lack of appropriately trained staff. Some projects, such as Kenya Digital Schools, are addressing the problem, but it is clear that the education system needs ICT facilities and laboratories. Analysts refer to a negative attitude towards technology seen in teachers. Indeed, as with many developing countries, familiarity and acceptance of technology among many in the poorer communities is lacking.

A dynamic and innovative private sector with particular contributions from local Kenyan start-ups…

The world’s major ICT companies (including Microsoft, Hewlett Packard, IBM, SAP and Oracle), are well-established in Kenya. These are joined in the market by the larger local ICT majors such as Safaricom, Jamii Telecommunications and East African Data Handlers.

However, Kenya also has numerous local start-ups mainly headed by young, dynamic, solution-orientated Kenyan entrepreneurs who have identified specific digital requirements in the regional market place. ICT analysts are referring to new companies such as Zuri Health, Watu Credit, Kwanza Tukule, Basigo and ED Partners as good investment opportunities. The services offered by these and other start-ups cover a wide range of sectors. Financial services are a dominant activity, but innovative solutions are offered, for example, in the areas of agriculture, manufacturing, healthcare, education, transport, business development, and commercial property management.

Here are a few examples of these start-ups and their innovations:

Ilara Health facilitates access to clinics and doctors for under-serviced communities by equipping a network of peri-urban healthcare practitioners with diagnostic tools. The Mara Group provides farmers with crop yield estimations, including fruit counting and sizing, through the use of smartphones. ED Partners is implementing a school partnership programme that assists with the funding of school upgrades, transport, and technology procurement. Shara Kenya offers a property search programme for agents, landlords, and property developers. Watu Credit provides asset finance for the acquisition of electric motor bikes.

But Kenya is not alone in the quest for ICT hub status in Africa…

Neighbouring Rwanda has prioritised ICT for its development, and there is considerable activity for example in Nigeria and Côte d’Ivoire. South Africa has major regional role players in MTN and Vodacom.

Nevertheless, African and other governments could do well by studying and emulating the Kenyan ICT example.