The Achilles' heel of Kenya’s growing digital economy

Kenya lacks sufficient high-level digital skills

Kenya is a leader on the continent when it comes to access to digital infrastructure. The country’s ICT sector has on average grown 10.8% annually since 2016 and its digital economy is expected to contribute to 9.24% of the country’s GDP by 2025. In 2006, only 26.7% of Kenyans had access to formal financial services. Ten years later, this number had tripled thanks to digital financial services such as M-Pesa, which offers phone-based money transfers. Today, 98% of Kenyans use mobile money and 65% have access to the internet.

Compared to other African countries, Kenya ranks high in ICT skills development. These skills range from basic digital literacy, such as knowing how to use mobile phones, the internet or social media, to advanced skills in data analytics, app development and network management.

According to estimations, 50-55% of jobs in Kenya will rely on digital skills by 2030, which will require professionals with advanced digital skills. Kenya has got the basic digital skills covered, but it lacks sufficient high-level digital skills. Many people and businesses are unable to use technologies or contribute to the vibrant digital ecosystem, which is holding Kenya back in its digital transformation.

The absence of digital skills also contributes to digital exclusion of an important segment of society. A large number of people cannot use digital tools to access the market or government digital services. For example, of the 44% self-employed Kenyans and business owners already using digital services to support their businesses, only 15-18% use advanced digital services.

The will is there, but more ambition is needed

The Kenyan government, in cooperation with the private sector and some international partners, is doing commendable work to build a digital skills ecosystem. It has developed strategies that address the digital skills gap. For instance, the Digital Economy Blueprint (developed with Smart Africa), which builds on the Kenyan National Digital Master Plan 2022-2032, identifies digital skills of ICT professionals as one of the key pillars of the digital economy.

The government has also promised to train 20 million citizens in digital skills (300,000 civil servants and 350,000 teachers), and the Digital Literacy Programme is the latest and most advanced programme engaging citizens in digital skills development projects through the Presidential Digital Talent Graduate Internship.

As a response to the job losses during the COVID-19 pandemic, the Ministry of Industrialization, Trade and Enterprise Development partnered with the Stanbic Kenya Foundation to provide digital skills training to over 50,000 entrepreneurs in the next year – a number they hope to increase to 500,000 in the next three years. Similarly, one of the key pillars of the Kenya Youth Employment & Entrepreneurship Accelerator Program (K-YEEAP) is development of digital skills.

The private sector is also providing digital skills to unemployed Kenyans. For instance, Microsoft and Safaricom (with universities and tech hubs) are running the Digital Talent Programme that will train around 1,000 citizens on the most demanded digital skills, including cybersecurity, fintech and cloud computing.

Besides the private sector, there are also international partners who want to work with Kenya in building its digital skills sector. The EU, while not Kenya’s biggest digital partner, has made digital transformation a major focus of its cooperation agreement with Kenya. The bloc is developing projects on technical and vocational and education and training (TVET) with a digital component (allowing distance learning for instance), digital skills and entrepreneurship, together with last mile connectivity to link schools with training centres.

German development agency GIZ, which is leading the EU’s support to Kenya’s digitalisation efforts through the Digital Transformation Centre, focuses on digital and entrepreneurial skills and digitalisation of small and medium-sized enterprises (SMEs). With the EU and other member states, but also academia, research institutions and businesses, GIZ is identifying the skills that the labour market needs, to develop a framework to address those needs.

But all these laudable initiatives are limited in reach and focused on literacy and basic skills, which is not enough for a rapidly growing society with high youth unemployment levels. Kenya’s government is also still identifying the digital skills gaps and needs to digitalise its government services to create demand for digital skills – which it aims to do by July 2023.

Four considerations to promote digital skills in Kenya

In their efforts to promote digital skills, Kenya and its partners need to take a few things into account.

1. Despite the low gender gap in mobile usage, women are less likely to have high digital skills

The popularity of M-Pesa has helped boost mobile ownership among both men and women, but there is still relatively low uptake of mobile internet, especially among women. While the gender gap in mobile phone use is only 6%, for internet use this is 38%. Mobile money gives women a commercial advantage compared to men and women without access to digital tools, but they often work in the informal sector, and are less likely to acquire high-level digital skills or pursue digital STEM careers. Only 35% of women use advanced digital services, compared to 54% of men – although women farmers largely accessing agri-tech platforms are an exception.

Women – but also young people – should be at the heart of digital skills strategies. There are already some interesting projects in this regard, but they need more investment. For example, building on a GIZ pilot project, Finland is developing a project on TVET with a component on digitalisation of the sector and promoting women’s access to STEM careers.

2. The biggest digital skills gap is in rural Kenya

Despite the fact that Kenya is advanced in policy making on digital skills and entrepreneurship, vulnerable communities and rural areas remain largely unconnected or use only basic digital services. The issue of affordability prevents many from accessing digital tools such as mobile phones, the internet and computers, and they do not develop the basic skills needed. During the COVID-19 pandemic, the urban-rural digital divide was very visible, and showed that efforts at the national level should have a spillover effect on rural communities.

As the country advances with its digital transformation, these communities are most at risk of a widening digital divide. This means that at the county level too, the transfer of technologies such as e-health and agritech should be complemented with digital literacy and skills programmes.

3. Digital skills is a growing area of interest, but it receives little investment

Kenya needs to attract more foreign investment in digital skills. The EU could elaborate on its support to soft infrastructure – which includes digital skills – as part of the Global Gateway projects it is undertaking in Kenya. The Team Europe approach, bringing together the EU, member states and development finance institutions, could also be a good channel to mainstream digitalisation in the education sector for instance. Member states should build on their long-standing and well appreciated work in the education sector to promote distance learning and the inclusion of digital skills in the national curriculum.

4. Key industry players should collaborate across sectors

The programmes that Kenya and its partners are developing have a limited scope, as most people cannot access them. Further, efforts at scaling digital skills have been focused in the tech sector as the country’s ICT sector impacts practically all sectors of the economy. In this sense, the private sector can help address the digital skills gaps by developing more flexible and rapid digital skills programmes to complement those provided in the formal education system.

The role of academia should also not be underestimated, because they can help understand the impact and uptake of digital technologies in the country.

The views are those of the author and not necessarily those of ECDPM.