KEPSA Foundation in partnership with the Center for International Private Enterprise (CIPE) held a Digital Economy Dialogue Workshop in Nairobi. The meeting sought to highlight the research findings of an MSME Digital Economy Survey matrix and discuss policy recommendations in comparison with the Government’s progress on the digital economy commitments and the ICT masterplan.

In attendance were Ms Gloria, Ndekei, Executive Director, KEPSA Foundation; Mr Ben Kiragu, Country Director, the Center for International Private Enterprise (CIPE); Ms Mary Ngechu, KEPSA Director in charge of SMEs and Start-ups; Mr Andrew Opiyo, Director E-Government and Digital Economy, Ministry of Information, Communication and the Digital Economy; Mr Ben Roberts, Chairperson, ICT Sector Board, KEPSA; Mr Brian Omwenga, Vice Chairperson, ICT Sector Board, KEPSA; Mr Steve Nyikuli, Director of Marketing, Moringa School; Ms Magdalene Kariuki, Africa Practice and KEPSA ICT Sector Board member among others.

In her opening remarks, Ms Ndekei noted that the digital economy presents significant opportunities for economic inclusion and growth, particularly for SMEs. She addressed challenges faced in the quest for digital inclusion and MSMEs growth such as cyber security, widespread gap in basic digital skills, internet access and equipment costs, and lack of digital training and skills awareness, among others. She further emphasized on collaborative approach towards addressing these challenges.

Ms. Ndekei appreciated the partnership between KEPSA Foundation and CIPE which has been instrumental in promoting the digital economy in Kenya. Through the collaboration of both organizations, shared challenges and opportunities have been identified to improve governance around digital development. She expressed KEPSA Foundation’s commitment to actively participating in activities to further amplify CIPE’s work and most significantly, in advocacy efforts for digital economy reforms even as the Foundation embarks on initial preparations for its strategy development to strengthen its pillars and key priority areas, which included governance and national values.

Mr Roberts mentioned that the Digital economy blueprint is used in Kenya for the development of digital economy strategy as well as across Africa for the growth of the economy. This was to highlight the possibility of the evolution of the digital economy from the Kenyan involvement.  He also noted that there are five key pillars underpinning the blueprint; digital infrastructure, digital skill & values, digital entrepreneurship, digital government and the digital business. He said these pillars were affected by cross-cutting issues of policy and taxation. He further added that MSMEs don’t use e-commerce for their products as they don’t have websites for it hence they rely on social media (set of tools).

“CIPE's vision is to promote democracy and to encourage and improve entrepreneurship eco-system through private sector engagement and market-oriented re-inform,” Mr Ben Kiragu remarked in his opening statement.

Referencing the World Bank reports, Mr Kiragu said that the digital economy is bound to raise the global GDP by more than 15% by 2025 and more than 30% in the next 10 years. He also noted that in Kenya we emphasize on agriculture and fail to understand the potential of the digital economy towards the GDP. He also identified the problem of the current taxation issues which limit people from digital services and he welcomed the digital phase 2 report, tracking progress which should be done by the KEPSA Foundation.

As the head of the sub-committee on innovation-driven entrepreneurship In the ICT sector board, Mr Brian Omwenga said that the adoption of the framework gives a guide and involves a dialogue conversation around SMEs. He said that we should look at the digital economy from a risk-based perspective and focus on the risks as they define policy work. He noted that the policies we implemented should catch up with technology and focus on the upcoming future. He also mentioned that COVID-19 was eye-opening as we had to get things from the local area hence the need to empower local and small businesses backed by policies.

Mr Steve Nyikuli said that digital transformation is a growing economy and needs more than local skills. He noted that the skills reported in the market and what we have at our disposal are worlds apart hence the need to form an information asymmetry and engage in this topic of digital transformation seriously. He added that we are not competitive with our models at the moment and can't be compared to other nations like Australia. Mr. Nyikuli further said that in the current state, employees care less about paper and more about delivering services. He further said that the government and the private sector are running different races and hence not profitable to any sector. He concluded by calling for a collaborative approach by all stakeholders in order to maximize impact.

Ms. Mary Ngechu noted that the digital economy is a tool that enables businesses to run especially in SMEs which cuts across all sectors and there’s a need to have a specific program for them and how they interact with technology. She said that one particular challenge for SMEs is the lack of information on e-commerce to maximize value hence we should help the government in the traceability of critical SMEs to understand the value of their products in other nations and tap into the digital economy. She called on stakeholders to build leadership support in order to bridge the gap and that the private sector should harmonize information for small businesses to understand the structure capacity and communications involved.

While presenting the Digital Economy Matrix, Mr. Omondi called on the sensitization of persons on the legal framework and to first catch up with what was there and then to now adopt customized versions of the law for the private sector. He highlighted the role of Data Protection Laws in the protection of consumers as there was a lot to be done on this area including amendment of the said legal regime. He further mentioned that on the digital economy matrix, there were three focus areas: digital skill awareness, interest &associated equipment cost, and cyber security & safety. He regrettably noted that the private sector lags behind on digital skills and adoption of programs and we need to establish partnerships with the developed sectors to enable the private sector to get needed support.

In his remarks on the status of the digital economy in the country, Mr Andrew Opiyo intimated that the digital economy is a critical development facility for economic growth and called for the automation of digital identity and digital service. He also mentioned that there needs to be a collaboration between the private sector, associations, and the government to achieve a cohesive and common goal. This is to put diverse perspectives into action.

He noted that the private sector provides an enabling environment as the public sector creates the environment for digital growth. “We have digitalization of government services and to mention of the back-end processes we are also onboarding services into a digital platform so that citizens can have access. we are looking at holding 80% of government services and currently, quite a number have been onboarded; more than 10000 services can be accessed,” he added.

While giving the next steps as agreed during plenary, Ms Magdalene Kariuki reiterated that the CBK SME financial framework should be the Regulatory framework of the nation towards a digital economy. She also pointed out that the government policy was playing catchup with the current trends and hence it should fasten up to ensure consumer protection and fair competition across the nation. She noted the need to harmonize credible information towards accreditation as the country defines skills for the future, and close loopholes around the skillset required.

Ms Kariuki also noted the need to ensure a streamlined administration process for MSMEs service in the digital government service platforms. She echoed that risk factors are shaping the future and called on stakeholders to address how this shapes policy and how to prepare as a nation. She went on to urge participants to position Kenya better as the Silicon Savanna of Africa and called on the Government to act as an enabler.