ICT contribution to Kenya’s GDP now at 12.1%

ICT contribution to Kenya’s GDP now at 12.1%

The contribution of the Information Communication Technology (ICT) sector to the Kenyan economy increased to 12.1 per cent in 2013 from 8.9 per cent in 2006, with growth attributed to factors such as international development agencies financing.

“ICT has assumed an increasingly strategic role in the Kenyan economy in recent years. Between 2000 and 2012, the country’s wider transport and communications sector, of which ICT is a part, grew at a compound annual growth rate (CAGR) of 7.7 per cent, outperforming all other sectors of the national economy,” read a statement from the International Data Corporation (IDC).

According to IDC, the World Bank Group takes the lead in funding of ICT activities in the country, with global assistance from the World Bank Group between 2003 and 2010 totalling well over US$4.1 billion.

“Kenya has certainly benefited from funding and other support activities in the telecommunications sector, both from the World Bank Group and from other international development institutions. The examples of major initiatives that have benefited from funds supplied by international development agencies are numerous and include the Eastern Africa Submarine Cable System (EASSy) project, the privatization efforts of Telkom Kenya, and the opening up of all local telecommunications market segments to competition through the structuring of support and advisory services by the International Finance Corporation (IFC),” the company said.

IDC also revealed telecommunications has traditionally accounted for the bulk of revenues in Kenya’s ICT sector. Prior to the liberalisation of the market in 1999, there were only 15,000 mobile subscribers in the country, compared to the current figure of around 31.3 million.

A recent World Bank report on the Kenyan economy noted the rapid uptake and transformative impact of the surging ICT sector in the country, identifying the country as being on the verge of a sustained period of rapid growth.

While Kenya has indeed made solid progress in terms of its ICT uptake levels, IDC believes much room remains for further improvement.

The focus of international development and funding agencies in Kenya over the coming years is likely to expand into areas that go beyond supporting the buildup of communications infrastructure and networks, and move into the realms of developing strategy for the ICT sector to transform service delivery and accountability.

IDC believes various ICT sector projects supported by international development and funding agencies in Kenya offer significant commercial opportunities to technology vendors. And as we have already seen with the country’s surging telecommunications sector, these initiatives will provide a significant boost to national ICT maturity and potentially lead Kenya to the ICT tipping point.

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