Kenya is one of Sub-Saharan Africa’s biggest economies, despite having only the 23rd largest land area.
Between 2015 and 2019, Gross Domestic Product rose at a CAGR of 5.7%, making it one of the fastest-growing nations on the continent.
Even in 2020, GDP still improved by 1% and it is expected to return to a rate above 6% in 2021.
Agriculture, mining, manufacturing, fishing, and forestry are big parts of the Kenyan economy, as are financial services and tourism.
However, much of 2021’s economic growth is expected to come from the expansion of the telecoms industry as more and more Kenyans get connected to the internet.
In 2019, Kenyan internet penetration was recorded at almost 23%, up from 18% from two years earlier and above the Sub-Saharan average of 18.7%.
Given that less than a quarter of Kenya’s population is currently online, the direct economic growth provided by more people paying for an internet connection would be huge.
Plus, it would also unlock a huge indirect benefit by creating new opportunities for economic growth and social advancement in a multitude of other sectors- agriculture, retail, tourism, and more.
Ecommerce
The ecommerce market in Kenya is already valued at $1 billion, making it the 64th biggest in the world.
That puts it roughly in line with its position in global GDP rankings, meaning ecommerce has already reached a sizeable level in the country.
However, that $1 billion of sales was generated by just 24% of the population, so there is a lot more growth potential for this sector.
Therefore, if, for example, more Kenyans begin getting online, we can expect ecommerce to grow at a similar rate.
Additionally, there is a lot of scope for increases in certain categories of online spending.
Currently, food and personal care only account for 6% of online spending, whereas electronics and media products generate 40% of the revenue from online sales.
More online grocery shopping could, therefore, help to drive ecommerce growth further.
More people buying online may also help to make ordering over the internet simpler, as it is currently quite a convoluted process to purchase from sites like Amazon.
iGaming
The iGaming industry is one that offers customers the opportunity to wager on casino games through their computer or smartphone. It began to emerge at a similar time to the ecommerce industry, with early sites setting up in the mid-1990s.
Today, iGaming is a competitive industry, with tens of billions of US dollars generated in revenue each year.
In countries like the United Kingdom, where the industry has been allowed to thrive, the market offers a lot of value to consumers.
This is because the companies operating have to keep up with the competition if they want to keep growing.
There are several ways that they have done this, including offering sign-up bonuses to new users and by creating licensed online casino games that feature elements from TV shows like Deal or No Deal and movies like Ted.
According to the BBC, Brits in the UK now spend around £6 billion (KES 900 billion) on these games each year, providing a huge boost to the economy.
Of course, the same figures are unlikely to be seen here in Kenya, at least not right away, but the iGaming industry could provide strong economic benefits.
Financial Services
Only around 41% of Kenyans have a bank account. Meaning they’re also unable to access also financial services like loans, savings accounts, investments, and more.
It’s a long way from South Africa’s rate of 90%, but it is still much better than 2006 when just 14% of Kenyan’s held a bank account.
Access to the internet is already helping to drive financial inclusion.
Having a smartphone, preferably one that is also connected to the internet can help Kenyans open financial products for the first time.
Without a bank account, they can’t buy products online or trade with others over the internet.
In just these three areas, the internet could make a big difference to the Kenyan economy by facilitating more trade, creating new industries, and allowing more of the population to partake in the formal economy.