Digitisation will power the next phase of economy

Since 2008, Kenya has been in a race towards a social, economic and political resurgence, promising a middle-income status powered by knowledge-based economy by the year 2030. More recently, the government set out the Big Four agenda – a key catalyst to realising this blueprint.

This journey has identified ICT as the engine that will power manufacturing, housing, food security and universal healthcare. The 2018 Economic Survey depicts a stellar ICT performance demonstrating the sector’s impact on the economy. The survey attributes the sector’s 11 pc growth in 2017 from 9.7 pc in 2016 to an expanding digital economy through mobile telephony, e-commerce, online training as well as tax administration.

CALL TRAFFIC

While the value of mobile telephony sector, call traffic, short message service (SMS) and mobile money in monetary terms has shot through the roof, the opportunity for collective growth lies in a digitized economy that is in tandem with data growth.

This growth is defined in two waves — first, the ongoing efforts to ensure basic connectivity to increase internet penetration; followed by aggressive efforts to leverage data for the new digital economy. While the first wave is already profiting the economy with promise of further growth, it is the second phase that Kenya needs to be prepared for. Indeed, a Mckinsey Global Institute Report in 2015 foretold that by 2025, digitisation of economies could account for as much as 10 per cent, or $300 billion of the continent’s total GDP, with the greatest digital impact felt in six sectors: financial services, education, health, retail, agriculture and government with tech-related productivity gains oscillating between $148 billion to $318 billion by 2015.

SH30 BILLION

Aptly, the opportunities for growth lie in public sector digitisation, Digital Payments, Internet-of-Things and Over-the-Top Services among others.

The low-hanging fruits of public sector digitisation are already being felt in Kenya, according to a GSM Association 2017 Report. It reports that the Kenyan government has saved an estimated Sh30 billion ($290 million) over four years by digitising the public sector through increased efficiency in service delivery.

Specifically, government bodies, such as the National Transport and Safety Authority (NTSA) and the National Hospital Insurance Fund (NHIF) attribute their revenue collection to digitisation of payments. While the opportunity for partnership between public and private sector operators exists, it is highly dependent on physical resources. As part of its rebrand, Telkom initiated a massive network infrastructure investment programme worth Sh6 billion in 47 counties to support such partnerships.

CUSTOMER NEEDS

With the recent mobile money interoperability initiative expected to be completed by July, we are now more than ever closer to a digitally cashless consumer economy.

Understandably, end users, including consumers, merchants and governments are finding it easier to make and accept payments. Indeed, the World Payments Report 2017, by Capgemini, a global leader in consulting, technology and outsourcing, estimates that volumes generated by emerging economies will grow by 19.6 percent, or three-times the rate of mature economies.

The private sector’s fortunes, hinged on customer needs, experiences and satisfaction will find big data analytics significant in utilising unique knowledge of customer data to develop relevant solutions, tailor-make offers and incentives while appropriately adjusting pricing to build loyalty.

BUSINESS CASE

Our Big Four agenda items are heavily reliant on data connection for their operations – providing a business case for operators for Internet of Things (IoT) impact in Kenya.

Telkom’s belief in leveraging data, evidenced in the massive broadband investment, to create broad-based wealth as the lasting solution to social and economic development in Kenya is the spirit needed to drive the African renaissance agenda.

The author is the chief executive officer, Telkom