Kenya is mostly known for its agriculture which, together with forestry and fishing is responsible for 34.6% of the country's GDP, as it is the world's leading exporter of black tea and cut flowers, while coffee and vegetables are also hugely popular crops produced in the country.
How is Technology Changing the Economic Performance of Kenya?
The difference made
However, local businesses and the Kenyan government are looking to change that. They want to move away from agriculture and grow the country's technology sector. Already contributing 9.2% to Kenya's GDP, technology is having a hugely positive effect on the country's economic performance.
Tourism and Travel
Behind the technology sector is the travel and tourism industry. Kenya is ranked the third largest tourism economy in sub-Saharan Africa. In 2018 the country welcomed more than 2 million tourists, with the tourism sector worth 8.8% of the country's GDP.
The beauty of Kenya, from the Masai Mara national reserve to Lake Nakuru, is a great reason to come and visit the country, but it is technology which helps tourists to learn about these wonders. Kenya has a growing scene of technology influencers as locals who know the area share images and videos of these sights on social media platforms such as Instagram. The Magical Kenya Instagram account (run by the Kenyan Tourism Board) has more than 50,000 followers, while non-government accounts like The Kenyan Camper and Zuru Kenya also have several thousand fans.
Driving Foreign Investment
The Kenyan government has identified areas of the economy which need investment such as infrastructure (to replace the Kenya-Uganda railway and to build Nairobi's commuter railway system), manufacturing (more ways to create niche products and development of machinery and tools), and agriculture (better food processing and irrigation).
The country will need some foreign investment in order to complete these projects. Recently, Kenyan markets have become more accessible to this type of investors thanks to online trading tools. Technology has also made it much easier for Kenyans to follow the performance of international companies and speculate on the price of their stocks. Similarly, Technology also provides online access to Kenyan commodities markets, such as tea and coffee, cut flowers and building resources, which can impact positively the country's economy. For instance, Kenya exports around 23% of the world's black tea and the value of this product or the demand for it could increase with commodities trading.
More Tech Companies to Invest In
The country has a growing tech sector, with ICT helping to grow Kenya's GDP. There are an estimated 10,000 startups and many of these deal technological products and services. Cellulant, a mobile payments platform, closed a record $47.5 million funding round in 2018, while agriculture technology firm Wefarm, a knowledge sharing platform for farmers, raised $91 million.
Talented people are coming up with smart solutions to the country's most common problems, from ways to support the huge community of farmers to smoother ways to send money in a country that leads the continent in mobile usage. As more firms create technological solutions to these issues, the investment they bring and the jobs they create will have a positive effect on the country's economy.
The success of Kenya's technology sector and its effect on the country's economic growth comes because of talent, work and investment. However, there are some areas of improvement: Kenya doesn't have great 4G mobile data infrastructure and its average Internet speed at 13.7mbs beats the US but could be better. It has also been slow to allow technology such as drones, while wearable technology isn't that popular in the region. This is a tech sector that is growing fast, however, and investors should keep an eye on it.
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