OWALO: Why digital economy is the critical game changer for Kenya

ICT has totally transformed the way we live, interact, communicate, work, learn, solve problems and do business.

In Summary

• The Fourth Industrial Revolution is a one-way ticket global affair, where digital technology is becoming the new way of life.

• We cannot run away from cyberspace technology, complete with such components as big data, internet of things, robotics, artificial intelligence and, in a word, digital economy.

ICT and Digital Economy CS Eliud Owalo during the Connect Kenya Summit announcement in Nairobi
ICT and Digital Economy CS Eliud Owalo during the Connect Kenya Summit announcement in Nairobi

I have now served as ICT and Digital Economy Cabinet Secretary for just slightly over 100 days.

As I reflect upon this breathtaking period, I find that destiny has placed me in a position of great responsibility to my country. I bear the duty to steer Kenya in its primal journey of digital transformation, which is critical for sustained relevance in the emerging global space.

The prosperity of Kenya’s dreams can only come our way, if we survive this journey, which needs carefully planned and sustained stewardship.

The world is, itself, on an irreversible digital journey.

The Fourth Industrial Revolution is a one-way ticket global affair, where digital technology is becoming the new way of life.

We cannot run away from cyberspace technology, complete with such components as big data, internet of things, robotics, artificial intelligence and, in a word, digital economy. The revolution is changing the world in a way never seen before, in scope and speed.

It is disrupting and reordering every industry in every part of the world, and indeed reordering life. Many things are now remotely. We can order and have a snack delivered to our doorstep. From the comfort of their homes, we can book flights, make payment and check in without talking to anybody. People now listen to music and watch movies of choice at home. They can call for the cab, shop, and do almost anything remotely.

There is going to be more of this in the days to come: It is going to be a completely new world order.

That is the world into which I have been tasked to lead Kenya. I am leading the ICT team to ensure we have the technology and the skills. But this team must also effectively communicate to make sure Kenyans understand what is happening and why they must be a part of it.

In the run up to the 2022 elections the Kenya Kwanza team undertook a countrywide consultative process to ascertain our development priorities.

Bringing down the cost of living, eradicating hunger, creating jobs, expanding the tax base, improving foreign exchange earnings and inclusive growth emerged as the most urgent interventions. ICT featured among the five key result areas with the potential to drive the rest of the priorities. It was seen both as an enabler and a critical success factor.

To appreciate the potenti­al of the ICT sector to turn around the economy, I will use India, an emerging economy, as a benchmark.

The share of the ICT and Business Process Outsourcing sector in the GDP of India was 7.4 per cent in 2022, with sector industries’ generating revenues estimated at $230 billion (Sh28.8 trillion) in the same year.

The domestic revenue of the IT industry is estimated at $49 billion, while export revenue is estimated at $181 billion (Sh22.6 trillion) in 2022 financial year.

The ICT–BPO sector overall employed an estimated five million people as at March 2022. It is, therefore, conceivable that if the sector were to realise its full potential in Kenya, it has the potential to be an economic game changer.

Beyond economics, ICT has totally transformed the way we live, interact, communicate, work, learn, solve problems and do business. It has been aptly dubbed the fourth industrial revolution.

To realise the potential of the sector, the Kenya Kwanza government through the ICT ministry, has committed to implementing the Kenya National Digital Masterplan 2022–32, which has five key pillars to drive the digital transformation agenda. They are digital infrastructure, digital services and data management, digital skills, digital entrepreneurship and effective alignment to policy, legal and regulatory frameworks.

Simply put, we intend to make the internet accessible and available everywhere. This is the infrastructure.

Next, we recognize that for citizens to use the internet optimally, users on the demand and supply sides must have digital literacy (digital skills) for optimal uptake of the opportunities. The next task is to deploy the internet to connect citizens to government and to other critical services. We must enable communication (Digital Services).

Fourth, we have to facilitate trade (entrepreneurship and innovation). To validate digital processes, we recognise that making the switch from analogue to digital processes requires new policies, laws and regulations.

These key result areas define our Digital Masterplan, which subsequently inform the centerpiece of our work at the Ministry.

Under the digital infrastructure pillar, it is our proposition to lay 100,000km of fiber optic cable countrywide.

We are tasked to provide stable and reliable internet access to an estimated 8.5 million homes and businesses. We are also expected to connect 1,450 wards, 400 police stations, 13,000 health facilities, 40,000 public schools, markets and other public institutions. This is part of our effort to bring ICT infrastructure to unserved or underserved areas.

The objective is foster innovation and creativity, create jobs and spur economic growth. We are set to roll out an initial 5,000km of fibre by June 2023. We are also in talks with the World Bank, through the National Treasury, to secure part of the funding for the digital superhighway, through the Kenya Digital Economy Acceleration Project.

Additionally, we are deploying the Universal Service Fund to facilitate internet connectivity to remote and underserved areas, which ordinarily do not attract private sector investment, yet they also deserve connectivity.

Our enormous government infrastructural investment will be skewed, if the ordinary Kenyan was unable to access the internet and use it productively.

To enhance access, we have begun installation of 25,000 free public WiFi hotspots across the country in the next five years through the JiKonnect Wi-Fi Programme.  

So far, we have installed 61 hotspots and intend to have at least two more in each of the 47 counties by June 2023. We have also established a data centre at Konza Technopolis for centralised data storage by all government entities, while development of a framework and guidelines to enhance security, protection and cost-effectiveness is ongoing.

Under the digital services pillar, we are leveraging ICT to deliver more efficient information and public services to citizens by digitizing government records and 5,000 government services. This task, through the e-Citizen platform, should be complete by June 2023.

Some 750 services have already been onboarded into the portal and an average of 300 services are onboarded weekly, making out target target both realistic and attainable. Key government services under immediate digitalisation include the health information management system, revenue collection at source by the KRA, lands records and associated processes, registration of births and deaths, immigration services, transport/traffic management, border control and e-Literacy in schools and universities.

As part of our digitalisation agenda towards a paperless government, the Cabinet Office and meetings have already been digitalised, for efficiency and effectiveness.

On January 31, Kenya made history by holding its first-ever paperless Cabinet meeting. We have demonstrated the country's progression and commitment towards an exciting digital future.

Through this pillar, we also intend to establish and operationalize the National Digital Identity to enable use of digital technologies to identify Kenyans through a national integrated identity management system, and have a central master population database for all citizens.

The database will serve as a primary source of identity for citizens, permitting them to access government services from wherever they are. It will also be useful on other online platforms that require authentication through electronic facilities.

The digital ID will bring together all existing identification information from different sources into one unified and electronically verifiable platform, making the process of identification more streamlined and efficient. We expect to have this system fully functional and operational by February 2024.

Meanwhile, we are also establishing and operationalising a citizen contact centre at Konza Technopolis by July 2023 that will be linked to ministries, departments and agencies. It is being equipped with advanced features such as call logging and escalation. This will enable citizens to interact with the government and receive assistance on any issues of concern.

Our third pillar of the digital masterplan envisions a twin-pronged investment in digital skills. First, we intend to empower citizens with digital skills to adopt, use, and monetize digital technologies.

Second, we are going to train the public workforce to ensure efficient and effective service delivery. We are concurrently running several digital skills capacity-building programmes. These include the Jitume Programme, which was designed to equip technical and vocational education and training institutions countrywide with 23,000 virtual desktops.

The ultimate goal is to equip one million learners with market-ready business and ICT-related courses for free. Seventeen Jitume labs have already been set up and connected, and are expected to be fully-operational by the end of this month. Trainees on this programme at the Kabete National Polytechnic are already beneficiaries, with some earning from digital jobs up to $2,000 per month.

We are intensifying the Digital Talent Programme, whose key components are skill development, on the job coaching, mentorship, training, certification and ICT innovations. This is a 12-month internship package to develop ICT high-end skills in recent graduates. It provides a platform for structured training, coaching and mentoring. It also aims to promote ICT innovation and solutions development among the trainees. Under this Programme, 356 students graduated in November 2022. Another 400 interns, recruited in December 2022, are currently undergoing training.

The ministry, in collaboration with partners, also established the Ajira Programme, which provides free training and placement to youths for access to online jobs, both locally and internationally.

The Programme trained 73,000 youth between July and December 2022 in TVETs, universities and youth empowerment centres. It is currently advancing skills training to 120,000 youth. This training is also ongoing for women and traders and seeks to increase income and the utilisation of JiKonnect Hotspots.

Separately, as part of the enhancement of digital skills in Kenya, the government is at an advanced stage of operationalising the Kenya Advanced Institute of Technology, a specialist SMART University to provide master’s and doctorate level training in the three Faculties of Mechanical, Electrical, and ICT Engineering. We expect KAIST to produce graduates in science, technology and innovation. These disciplines are a must in a knowledge-based economy.

I am confident that apart from providing digital skills to facilitate optimal uptake of digital services and improve service delivery, highly skilled ICT professionals in the country will attract foreign investors to establish tech industries locally, including in BPO. This will create jobs and earn the country much-needed foreign exchange.

The digital skills pillar also entails establishing of digital village smart hubs and studios in each of the nation’s 1,450 wards. The hubs are designed to support learning, innovation and entrepreneurship by offering free working spaces and WiFi to facilitate uptake of online jobs by the youth across the country. The same would enable citizens to access government services, engage in e-Commerce and communicate with each other.

So far, the ministry has established and operationalised 240 hubs in collaboration with partners.

In our fourth pillar, digital entrepreneurship, focus is on innovation that creates a conducive eco-system to turn innovative ideas into sustainable businesses and operating models. This is anchored in the premise that entrepreneurship and business growth require continuous innovation, research and development that is responsive to a dynamic market with ever changing needs.

The Kenyan innovation eco-system is vibrant. It was internationally recognized when it was ranked 77th globally in the 2019 Global Innovation Index. It is this eco-system that birthed M-Pesa and other fintech technologies that have created employment for millions of Kenyans, both directly and indirectly. It has also brought millions of unbanked Kenyans into the financial system. To support the innovation eco-system in Kenya, the ministry has established and operationalized 240 Community Innovation Hubs.

We are, meanwhile, strengthening the software development industry as a crucial driver of innovation and business productivity. With the rise of digital transformation, investors from various sectors will adopt digital technology to enhance their processes to reach wider audiences.

Digital transformation brings a range of benefits – including increased efficiency, access to new markets, and the ability to offer better customer experience.In particular MSMEs sector plays a critical role in the digital economy, accounting for the majority of employment opportunities in Kenya.

With 14.9 million Kenyans working in this sector, it is important to focus on empowering MSMEs through digital entrepreneurial programmes to drive the digital transformation process. This is expected to enable small businesses to grow and contribute to development of the digital economy.

In recognizing the opportunities for MSMEs to leverage ICT to participate in the digital economy, we have identified affordable smart phones and low-cost data as critical success factors to facilitate optimal uptake and commercialization of the technologies.

To this end, the ministry has brought together telecommunication companies, manufacturers and other relevant stakeholders to work together towards production of low-cost smart phones and lowering data costs, informed by economies of scale.

Initial outputs from consultations point towards the feasibility of manufacturing phones locally at about $40. To further encourage growth of the digital economy, the ministry has facilitated development of an e-Commerce strategy to help businesses maximize their use of digital technologies for increased productivity and competitiveness. This strategy includes the use of digital marketing, the development of digital marketplaces, integration of fintech and digital currencies for trade, and access to global markets.

Plans are underway to develop and operationalise a National Addressing System that provides for among other components, the naming and numbering of streets and properties through technology-aided coding to facilitate easy identification and location of such places on the ground.

Without a NAS, a vital component of e-Commerce, physical delivery of purchased goods to consignees and key government services such as water, electricity, social services, housing, commerce, manufacturing, healthcare can only be delivered to a limited extent.

In Broadcasting and Telecommunications, we are drawing up strategies to revive various struggling semi-autonomous government agencies to breathe new life into the sector. Strategic roadmaps on revitalization of KBC, Postal Corporation of Kenya and the Kenya News Agency are ongoing and will be implemented beginning July 2023.

We are also repurposing and re-tooling the Office of the Government Spokesman to enable efficient communication of programmes and activities in a proactive manner. In the same vein, we are re-engineering operations of the Government Advertising Agency for optimality in resource deployment.

Our digital transformation agenda will bring fundamental benefits. Yet, it also comes with its own risks and security concerns.

With the widespread adoption of technology, there is growing risk of cyber-attacks and data breaches such as identity theft, unauthorized access to personal information, denial of service attacks, malware, phishing and exposure to inappropriate content for minors.

Additionally, the large amounts of data being generated and stored may also create new security vulnerabilities that must be addressed. To mitigate against these risks, the minsitry is fully operationalising the Office of Data Protection Commissioner, including a presence in all 13 regions and Huduma Centres.

This is to enhance personal data protection, s enforce provisions of the Data Protection Act, make necessary amendments to the Computer Misuse and Cyber Crimes Act 2018 and review the Kenya Information and Communications Act (1998).

A permanent multi-agency team comprising all the relevant government agencies has also been set up for proactive risk mitigation.

Our ICT sector is primarily governed by the Kenya Information and Communications Act, 1998 (as amended in 2013 and 2015), the Science, Technology and Innovation Act of 2013, the Computer Misuse and Cyber Crimes Act of 2018, and the Data Protection Act of 2019.

These laws ensure the proper and secure management of government information and communication technology. We are, however, facilitating their review to validate digital processes that otherwise risk being considered invalid, as most belong to the analogue age. The legal provisions already under review include Access to Information Regulations 2023, which has been submitted to the Attorney General for publication before presentation to the National Assembly.

The review of the Kenya Information and Communication Act is ongoing, and the Media Council Act (2013) is also being reviewed. In addition, the Kenya Broadcasting Corporation Act (1998) and the Postal Corporation of Kenya Act (1998) are also under evaluation. Equally, the ministry is currently formulating the ICT Bill to replace ICT Authority Order (2013).

Under the digital infrastructure pillar, we have routed the 100,000km fiber optic cable in consultation with stakeholders. We have secured a pathway for its funding and embarked on the procurement process, which is well underway towards laying down the first 5,000km by July 2023.

We have installed 61 free public WIFIs to promote e-Commerce, access to services and communication. We have also completed establishment of a data centre at Konza Technopolis and our efforts are now focused on consolidating all Government data there.

Under digital services we have acquired the e-Citizen platform and brought it under Government ownership and in the process, onboarded an additional 430 government services, bringing the total to 780. We have also successfully digitized cabinet meetings and held the very first paperless cabinet meeting in Kenya. Equally, we have deployed video-conferencing facilities in all the 22 Ministries, to enable virtual meetings.

On digital skills, we have so far equipped 19 TVETs countrywide with 1,900 computers and internet connectivity and are awaiting commissioning to commence market-ready digital skills training for the youth. Under the digital talents Programme, we have trained and graduated 356 students in November 2022 and another 400 interns recruited in December 2022 are currently undergoing training. Under the Ajira Programme, we have trained 73,000 youth as at December 2022 in TVETs, universities and youth empowerment centres. We are currently providing digital skills training to 120,000 Youth and Women traders to increase income and the utilization of JiKonnect Hotspots.

Under the digital enterprises pillar, we have developed an E-Commerce strategy that will be implemented to drive growth of digital business. We have also established Studio Mashinani at the Kenya Broadcasting Corporation in Seven Counties to scout for musical talent,provide free music production facilities and services to make them market ready and help launch them into the market.

So far,studio mashinani has helped to produce about 350 sings with several others currently undergoing production. We plan to have the studio mashinani available in all 47 counties and eventually cascade downwards to the sub-county level.

On the legal and regulatory frameworks, review of the Kenya Information and Communication Act (KICA) is ongoing, while the Media Council Act (2013) is also under review. In addition, the Kenya Broadcasting Corporation Act (1998) and the Postal Corporation of Kenya Act (1998) are under evaluation. We are currently formulating the ICT Bill to replace the ICT Authority Order (2013).

A lot of the interventions in my first 100 days have been foundational and focused on laying a framework that facilitates the digital superhighway.

I am confident that our roadmap anchored on the Digital Master Plan will effectively achieve our Vision of an empowered digital Kenyan society, thereby positioning it as a leading ICT hub in Africa.

We are confident that we will facilitate Kenya’s economic transformation by leveraging ICT for competitiveness and sustainable development.It is doable,and we will do it.

Eliud Owalo is the ICT and the Digital Economy Cabinet Secretary

WATCH: The latest videos from the Star