Kenya among top African countries most prepared for e-commerce

Kenya is the second most prepared country in Africa for the digital commercial revolution, the Digital Revolution Index shows.

The survey, prepared by researchers from the American-based Tufts University’s Fletcher School in collaboration with MasterCard and DataCash, placed Kenya second after Egypt and ahead of Africa’s most populous nation, Nigeria.

It pointed out the success of the M-Pesa money transfer service as a pointer to Kenya’s success in e-commerce.

The service enables about 31.1 million Kenyans to move over Sh250 billion annually in a country that enjoys 72.5 per cent mobile penetration.

It has aroused interest among cashless firms from around the world and investors keen on venturing into the cashless revolution known for its secure and affordable process carried out on virtual networks.

COMMENDED GOVERNMENT

The report also commended the Kenyan government for its move to enhance the adoption of various technologies via regulatory approvals and investment in the underground fibre optic cables that enabled the launch of various products in select towns.

Numerous banks and mobile phone companies have partnered with malls, supermarkets, restaurants and service stations where payments for goods and services are done through mobile phones-based transactions.

Saying Kenya was well prepared to contribute a lot for the world’s next billon Internet users, the report said the successful use of the mobile phone as a conveyor for cash in settling transactions and transferring cash had opened a myriad of opportunities for investors.

Kenya, it said, had infrastructure and policies in place that meet the challenges that arise while taking advantage of the opportunities the growing digital world presents to them.

Safaricom is launching its 4G network, which would provide faster Internet service for clients anywhere in the country, with its recently launched cloud business taking shape.

Saying discerning investors must "watch out" for Kenya, with a current base of 39 per cent Internet users, the survey said that this was a major frontier in launching cashless platforms for payment of goods and services.

The government’s move to disburse development funds to self-help groups comprising women and the youth via the mobile cash transfer platform was also noted as a major first that has dumbfounded financial experts over the security of cash moved via a branchless system.

DIGITAL HUB

The report describes Kenya as the hub of all things digital in East Africa, saying its (Kenya’s) decision to embrace co-operation with its neighbours has opened up greater opportunities for its banks as well as for mobile cashless platforms.

Kenya is relatively better off than its neighbours and has the potential to be the anchor for a regional organisation (East African Community) albeit more implicitly, it said.

The survey, which began in 2008, says that given the neighbourhood effect, taking a leadership role in regional cooperation would benefit Kenya and its neighbours.

It adds that the government’s move allowing it to partner with private players also opened up new revenue resources for it where the money invested could later be recouped and allocated to other meaningful projects beneficial to Kenyans.

The Digital Evolution Index provides a deeper understanding of how the shifting digital landscape affects e-commerce growth and reveals surprising patterns and actionable insights.