KEPSA Foundation partnered with the Center for International Private Enterprise (CIPE) in co-hosting a Digital Economy Scorecard Press Briefing at the Sarova Panafric Hotel, Nairobi on 23rd April 2024. KEPSA Foundation was led by the Executive Director, Ms. Gloria Ndekei, and Trustee Gikonyo Gitonga, while CIPE was led by the Country Director Mr. Ben Kiragu and Program Associate Ms. Lim Hazel.

The primary objective of this event was to present the Digital Economy Scorecard on the government’s progress on the digital economy manifesto commitments in line with 3 key issues namely Digital Skills, Cost of Digitizing and Cyber Security. The three issues were sighted in a research conducted by CIPE in 2021 as the main challenges hindering MSEs from engaging effectively in the digital economy.

Other participants in attendance included CIPE Consultants (Ms. Rachel Muthoga, and Mr. Michael Omondi), private sector representatives including Moringa School, KPMG, Telesky, Development Partners such as Swedish Embassy and Media fraternity.

Ms. Ndekei expressed gratitude for the valuable partnership between KEPSA Foundation and CIPE. She emphasized the importance of tracking government commitments to digital economy transformation, noting that it provides a deeper understanding of how technology is shaping the economy thus enhancing government accountability regarding progress made on digital economy commitments and the ICT masterplan. By tracking these commitments, stakeholders can better assess the impact of technology on the economy and ensure that government actions align with the goals of digital transformation.

Ms. Ndekei highlighted KEPSA Foundation’s commitment to support the KEPSA industry in mainstreaming the recommendations from the study and score card tracking among its members. She emphasized the importance of bridging the gap between SMEs and Corporates and pledged to facilitate connections between them. Additionally, she proposed a repurposing of the agricultural sector to enhance its viability as a business venture for youth through innovative digital transformation. Furthermore, Ms. Ndekei urged the private sector to uphold good governance and ethical business practices while adhering to the law. She illustrated this point with an example of emerging cybersecurity issues negatively impacting the financial services sector, including banks thereby underscoring the necessity for vigilance and proactive measures to address such challenges.

Ms. Ndekei further emphasized KEPSA Foundation's commitment to actively engage in amplifying advocacy efforts for digital economy reforms. This commitment would involve strengthening the capacity of Business Membership Organizations within KEPSA to embrace the digital economy in their operations. She also stressed the importance of ensuring private sector inclusion in the digital economy. To achieve these goals, the KEPSA Foundation aimed to create various resources for enhancing the knowledge and capacity of reform-oriented organizations to become active participants in shaping the global digital economy landscape thus driving sustainable growth and innovation within Kenya’s private sector.

Ms.  Hazel in her presentation provided an overview of CIPE’s work in the Kenya with an emphasis of the Phase II of its digital economic policy work which focused on empowering Private Sector Leadership in Digital Economic Transformation. She highlighted the findings of the research study conducted to identify policy and administrative hurdles experienced by MSE/MSME in the Digital Economy in 2022. The output from this study was a Policy Brief and Tool Kit  that were key to shaping a future where SMEs play a central role in the digital landscape.  Following the study, CIPE convened a Digital Economy Working Group that consisted of experts from the Kenyan private sector who were practitioners and policy advocates in this space.

During the presentation of the Digital Economy Scorecard Matrix, Mr. Omondi highlighted the pivotal role of Digital Economic transformation on the global stage, serving as a key driver of innovation and competitiveness while shaping the future global economic landscape. He underscored the significant contribution of the Digital Economy to the global Gross Domestic Product (GDP), emphasizing its remarkable growth rate.

According to data from the World Bank, the Digital Economy accounts for approximately 15% of the global GDP. Over the past decade, the GDP of the Digital Economy has grown 2.5 times faster than that of the physical world's GDP. Mr. Omondi also pointed out that Kenya's digital economy contributes an estimated 7.7% to the country's GDP, surpassing other nations such as Morocco and South Africa in this regard. These figures highlight the increasing importance and impact of digitalization on economies worldwide.

The scorecard highlighted a notable improvement in digital skills and awareness, with the percentage rising from a baseline of 18% to the current level of 57%. This progress was attributed to the collaborative efforts of partnering institutions, notably the Ajira Digital Programme. According to reports, 2.05 million Kenyans were engaged in the gig economy, a significant increase from 638,000 in 2019. Additionally, the scorecard indicated that 90 out of the planned 101 Ajira Youth Empowerment Centers (AYECs) at the Constituency Levels were operational. Furthermore, 115 Ajira Digital Clubs was established at selected universities and TVETs to serve as access points for online work readiness training and mentorship, surpassing the targeted number of 40. Cumulatively, 220,836 young people were trained and mentored in 1,120 universities and TVET institutions since 2020 thus demonstrating a concerted effort to equip youth with the necessary digital skills and prepare them for opportunities in the evolving job market.

The cost of digitizing was reported to have improved, although it is not on track, rising from 17% to 40%. Approximately 25,000 kilometers out of the targeted 100,000 kilometers was achieved through a Public-Private Partnership (PPP) model. Additionally, over 15,300 government services were onboarded to the eCitizen portal as part of the digital superhighway agenda.

Regarding the installation of free public WiFi hotspots, progress was made, but it is still below the planned targets. Only 2,261 public WiFi hotspots was installed in marketplaces out of the planned 25,000 by 2027. Similarly, only 174 out of the intended 1,450 digital hubs, to be established at the ward level, are operational. Inadequate resources were cited as the main impediment to the functioning of these digital hubs. A trader from City Market highlighted that the Government had implemented a pilot internet hotspot at the market, allowing traders to utilize free WiFi to enhance their businesses.

In terms of cybersecurity, there was a notable improvement from 12% to 51% in the implementation of activities aimed at strengthening cybersecurity measures. This progress was supported by the enactment of legislations governing the use of digital technologies, impacting users, content creators, and tech engineers. Key legislations include the Computer Misuse and Cyber Crimes Act 2018 and the Data Protection Act 2019.

Furthermore, the National Assembly had approved the Computer Misuse and Cybercrime (Critical Information Infrastructure and Cybercrime Management) Regulations, 2024, referenced as Legal Notice No. 44 of 2024. These regulations aim to align with the Constitution, the Statutory Instruments Act of 2023, and Section 70 of the Computer Misuse and Cybercrimes Act, 2018. These legislative measures underscore the government's commitment to enhancing cybersecurity and safeguarding digital infrastructure.

KEPSA Foundation will continue periodical tracking and dissemination of the Digital Economy Scorecard in order to take note of trends and emerging gaps for further advocacy leveraging KEPSA’s convening power through the existing Public-Private Dialogue platforms.