Sh250bn ‘Digital Kenya’ plan starts to click, byte by byte

The government has embarked on a Sh257 billion plan to turn Kenya into a knowledge-based economy by 2017, through provision of high-speed and reliable Internet services.

The five-year National Broadband Strategy envisages a country where broadband will be delivered to individuals, homes and businesses with a minimum speed of 5 megabytes per second to give Kenyans easy access to basic information.

By 2017, according to the plan set to be launched today by Deputy President William Ruto, 75 per cent of local businesses should be online, with at least 20 per cent of websites available in local languages.

The government, on the other hand, should have at least 70 per cent of its services available virtually, while at least 40 per cent of the Kenyan population is expected to be digitally literate.

“Access to broadband in Kenya for all citizens has the potential to generate enormous social economic benefits. Some of these include economic growth, job creation, growth of investment opportunities, access to online government services, improved education and training services, improved national safety and security services,” the plan prepared by the Ministry of Information, Communication and Technology, in collaboration with the Communications Commission of Kenya, reads in part.

In the broadcasting sector, the new plan will see the local broadcasting content increase from the current 16 per cent to at least 40 per cent.

Funding will come both from the government and the private sector, with a lot of emphasis on public private partnerships.

Infrastructure bond

The avenues the government plans to pursue in the search for funds include issuing a broadband infrastructure bond targeted to raise Sh70 billion, in addition to establishing a broadband venture capital fund to raise Sh30 billion.

More funds will be raised from contributions to the Universal Service Fund, which was established to help deepen access to ICT in rural areas usually considered less lucrative by players.

“The Kenyan government currently spends 0.5 per cent of the national budget on ICTs. This strategy will ensure that the government spends at least 5 per cent of its overall budget on ICTs and broadband within the first five years,” the five-year plan says.

Another strategy involves developing and promoting linkages between the ICT sector and financial institutions. This, the government says, is expected to facilitate and deepen the appreciation of the ICT value proposition on the part of financiers.

Other options include establishment of a Broadband Venture Capital Fund and exploitation of existing instruments such as the Growth Enterprise Market available within the Capital Markets.

To achieve the objectives of the master plan, all teachers and primary school level pupils will be required to undergo ICT training. Two new data centres will be established to host local content.

The government will also give taxation waivers on way leave fees that have hindered expansion of the fibre network to some towns, while infrastructure sharing will become a government policy to cut wasteful investment by individual operators.

Objectives and Goals of the National Broadband Strategy

Speed

The National Broadband Strategy, once implemented, will boost Kenya’s bid to become a knowledge-based economy through provision of high-speed, reliable Internet services broadband, which will be delivered to individuals, homes and businesses with a minimum speed of 5 megabytes per second (mbps).

Access and local content creation

The strategy is two-pronged, encompassing policy reforms and a set of projects that have to be implemented before 2017.

1. Consolidate management and development of ICT infrastructure under one agency.

2. The Universal Service Fund will implement last-mile connectivity to remote regions that are too high-cost for telecom firms to reach.

Key projects

National Fibre Backbone will be expanded by 30,000 kilometres to reach at least 80 per cent of districts.

Two neutral data centres will be constructed to host local content.

Mandatory ICT training for all teachers and primary school level pupils.

Digitisation of government registries to provide a national public network that combines the traffic and services of all government departments and agencies, at the national and county levels.

Incubators will be established in each public university and county special economic zones to foster innovation. Each ward will have an ICT resources centre.

Taxation waivers will be provided by county governments for way leave fees that have hindered expansion of fibre network to some towns. Rebates will be provided as the ICT sector is categorised as high energy use and is offered special tariffs.

Infrastructure sharing will become the government policy to guard against wasteful duplication by telecom firms.

Complementary infrastructure will have to be built in the roads sector, allowing ICT infrastructure to cross roads and railways.

Legislation to provide privacy, freedom of information and data protection will be fast-tracked.

Digital migration, once achieved, will free up spectrum to be used in broadband.

Raising the funds

5 per cent of National Budget will be geared to ICTs annually, up from the current 0.5 per cent.

Telecom companies will contribute 0.2 per cent of annual revenues to the Universal Service Fund.

A broadband infrastructure bond will raise Sh70 billion.

The government will also establish a broadband venture capital fund to raise Sh30 billion.

Greater emphasis will be placed on public private partnerships.

Benefits of wider access to broadband services

Economic growth and employment: There is a proven correlation between broadband access and development, due to greater access to information.

Promote investments in Kenya’s economy from multinationals, especially in the fledgling Business Process Outsourcing sector.

Efficiency in government services as they are migrated to the virtual space. It will also lead to falling corruption rates.

Financing

The NBS will cost Kenya at least Sh250 billion to implement