Kenya Among Top Four Controllers Of Africa’s Digital Economy

A new study by the United Nation Conference on Trade and Development (UCTAD) shows that Kenya is among the four countries that control the largest percentage of Africa’s digital economy.

In the report, Kenya, Egypt, Nigeria, and South Africa are leveraging data and various platforms to control the largest chunk of the continent’s e-commerce activities, translating to 60 percent, leaving another 20 percent for the second lot of African countries including Morocco, Ghana, Uganda, and Tanzania. The remaining 20 percent is then controlled by the remaining 44 countries.

E-commerce has thrived in Kenya, making it referred to as Kenya’s multi-billion industry as Kenyans are said to be very open to online shopping, which prompted the introduction of Jumia into the country in 2013.

Amazon, despite its inexistence in Africa, is one of the top ten most popular websites in Kenya, with Kenyans already shopping on Amazon, having the goods shipped to their relatives abroad who in turn bring the goods to them the next time they visit.

In just a few years the digital entrepreneurship industry was estimated to be worth more than 4.3 billion shillings according to the Communications Authority of Kenya (CA).

The UN agency has however raised the concern of the impending fall of the digital industry particularly in Kenya, where the government intends to start taxing mobile applications and internet usage, saying it will be counterproductive.

“If the government decides to increase the countries revenue collection by taxing online applications, the already blossoming industry may fall if the taxation results to reducing the number of active internet users, causing a decline in the economic activity,” said the UCTAD report.

According to the UCTAD report, numerous countries are implementing temporal and permanent measures to tax the digital economy, among them, Kenya, Uganda, Tanzania, and Zambia.

In Kenya, the Treasury has proposed imposing income and value-added taxes on goods bought on different digital platforms.

Responding to the agency’s report, UN Secretary-General Antonio Guterres said that while e-commerce has generated enormous wealth, the wealth is concentrated around a small population and few countries.