Why Faster Connectivity Means Faster Economic Growth for Kenya

By Tonny Tugee, Managing Director at SEACOM East and North East Africa 

With a flourishing ICT sector that has grown by an average of 10.8% every year since 2016 and as a home to some of Africa’s most innovative start-ups, Kenya’s nickname of “Silicon Savanah” couldn’t be more fitting. Couple this thriving technology hub with our impressive overall Internet penetration (approximately 85.2% of the population use the Internet) and COVID-19’s acceleration of digital adoption, and you have a country that is gearing up for the digital economy. 

But, can Kenya benefit even more from digital growth? In short, yes. While we have made great strides towards digital transformation, more needs to be done to improve and enhance connectivity – the very foundation that the digital economy is built on. Casey Torgusson, the World Bank’s Senior Digital Specialist and contributor to the ‘Kenya Economic Update: Securing Future Growth’ report, explained it best – “Building strong digital foundations will be critical to the country’s long-term success in harnessing the potential of the digital economy as a driver of its economic growth, job creation and service delivery while ensuring that no one is left behind.”

Let’s look at the pivotal role connectivity plays in the realisation of Kenya’s digital economy and how better connections can accelerate economic growth. 

Internet quality, affordability and localisation 

In Kenya’s case, we are currently prioritising quantity over quality, with a huge number of citizens accessing the Internet every day but few enjoying quality connectivity. Penetration is important, yes, but the speed, reliability and capacity of these connections are what really make an impact on individuals, businesses, and the greater economy. Strong, consistent connections and sufficient capacity encourage more interactions in a network, boosting productivity and performance in the long run. In turn, this means citizens and companies can positively contribute to society and the economy. 

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Two other factors that play a role here are affordability and localisation. A recent report by the Internet Society demonstrates the importance of Internet Exchange Points (IXPs) and their accompanying infrastructure to develop sustainable Internet ecosystems. The report details how Kenya localised Internet traffic from 30% in 2012 to 70% in 2019 using IXPs, thereby significantly reducing the costs of exchanging local and international traffic.

Local content developers, the government, ISPs and other stakeholders need to continue to work together to localise content and lower the cost of access to grow Kenya’s Internet ecosystem. 

The link between connectivity and economic growth 

If the COVID-19 crisis taught us anything, it’s that quality Internet is an incredible enabler in societies and economies everywhere. From improved education through digital learning to agile entrepreneurs and companies boldly creating innovative business models and unique employment opportunities for thousands who had lost their jobs, connectivity played (and continues to play) a critical role in our world’s resilience.

Ultimately, connectivity’s far-reaching benefits boil down to its primary purpose: to connect one entity with another. Whether that’s connecting individuals, businesses, networks, cities or countries, information sharing is a source of potential value that can result in increased interactions, elevated productivity and new economic opportunities. 

In the education arena, this means EdTech start-ups offer unique, digital learning platforms to educate and upskill both children and adults. Kenya’s Eneza Education is a prime example, with a mission to educate 50 million mobile native learners in Africa through its app. The brand-new Kidato platform also provides online academic and after-school classes, including coding, chess and languages, for local children. And for the adults, Nairobi-based Arifu allows businesses to deliver personalised training via the web and SMSs to employees, customers, retailers, distributors, suppliers and beneficiaries. 

From a business perspective, connectivity opens up endless doors for productivity, unique innovations and job creation. For example, Twiga serves as an online B2B marketplace for Kenyan farmers to sell their fruits and vegetables. Cellulant provides a mobile payment ecosystem that connects consumers, merchants, banks and other African businesses. And the Sendy app offers hyperlocal delivery services, allowing local citizens and companies to send anything, anywhere, at the touch of a button.

Another significant business benefit of connectivity is integrating organisations, cities and countries with larger markets. In turn, this leads to lower prices and economies of scale, increased options for consumers, factor mobility and more specialisation.

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Not to mention that Internet access also narrows the economic divide in developing urban and rural communities. The World Bank estimated that low- and middle-income economies grow by 1.38% for every 10-percentage-point increase in broadband penetration. If the above arguments and examples are anything to go by, high-speed connectivity in a country like Kenya has the power to translate into long-term prosperity. 

The need for progressive policies and digital investment  

If Kenya is to unlock its dynamic digital future, we need to start with solid digital foundations. Forward-thinking policies, including legislation and regulation, can have a positive effect on better Internet access. Kenya’s current policies need to be examined and adjusted to enable rapid telecommunications rollout, especially in underserved communities. 

To effectively participate in and reap the benefits of the digital economy, every Kenyan citizen, regardless of where they are based or their background, requires access to high-quality, high-speed and reliable connectivity. Both public and private-sector investment in digital infrastructure are needed to make this core necessity a reality – and truly transform Kenya’s economy.