Kenya’s Digital Economy To Contribute Ksh 662 Billion To GDP By 2028
KEY POINTS
Kenya has made significant progress in expanding mobile network coverage - 99% of the population is covered by 3G, and 98% by 4G. However, only 33.5% of the population currently uses mobile internet, leaving a significant usage gap.
The latest GSMA report, Driving Digital Transformation of the Economy in Kenya, projects that Kenya’s digital economy will contribute KSH 662 billion to GDP by 2028. This growth, driven by strategic policy reforms, will accelerate digitalization in critical sectors such as agriculture, manufacturing, transport, and trade. In addition to these advancements, the report forecasts the creation of 300,000 new jobs and an increase in tax revenues by KSH 150 billion.
Kenya has firmly positioned itself as a leader in mobile financial services and digital innovation. The Government of Kenya has recognized digitalization as a cornerstone of its economic strategy, with the Kenya Vision 2030 and the Bottom-Up Economic Transformation Agenda (BETA) underscoring the integration of digital technologies into key sectors as essential for driving growth. The GSMA’s study outlines the economic benefits of expanding digital adoption and provides a roadmap for maximizing these gains through targeted policy actions.
To sustain its economic momentum, diversify the economy, boost productivity, and create high-quality jobs – particularly for young and rural populations – Kenya is focusing on digitalization as a key driver of economic growth, government revenue, and socio-economic development.
Introducing the GSMA Digital Africa Index
Alongside the report on Kenya’s digital economy, the GSMA has launched the Digital Africa Index (DAI) – a comprehensive tool that assesses digital adoption and usage across Africa. The DAI is designed to support policymakers in identifying areas of improvement to accelerate digital transformation. With Kenya among the top performers in Africa, the index highlights the importance of progressive policy and regulatory frameworks, which have facilitated Kenya’s leadership in mobile broadband adoption and innovation.
The Digital Africa Index further reinforces the potential for growth across Africa, with Kenya scoring above 50, alongside a few other African nations. The DAI and the accompanying Digital Policy and Regulatory Index (DPRI) help identify policy bottlenecks and offer benchmarks for countries aiming to boost their digital economies.
Driving Economic Growth Through Digitalization
The GSMA’s report on Kenya’s digital economy highlights the transformative potential of digitalization in key sectors that account for 58% of Kenya’s GDP. The adoption of digital technologies across agriculture, manufacturing, transport, and trade is expected to significantly contribute to GDP, create hundreds of thousands of jobs, and generate substantial tax revenues by 2028.
In 2023, the mobile ecosystem contributed KSH 1.2 trillion to Kenya’s GDP and KSH 212 billion in government revenues. However, the GSMA notes that significant gaps remain, and addressing these will require bold policy initiatives to stimulate demand, reduce supply costs, and encourage investments in mobile money services, telecom infrastructure, and digital services.
Closing the Internet Usage Gap and Expanding Inclusion
Kenya has made significant progress in expanding mobile network coverage – 99% of the population is covered by 3G, and 98% by 4G. However, only 33.5% of the population currently uses mobile internet, leaving a significant usage gap. The GSMA, through its reports and the Digital Africa Index, projects that this gap could shrink from 63% to 46% by 2028, bringing over 1.5 million new users online and significantly expanding mobile money adoption.