CIPE and KEPSA Foundation Advocate for MSME Inclusion in Kenya’s Digital Economy

Nairobi, Kenya – In a recent workshop focused on enhancing the participation of Micro, Small and Medium Enterprises (MSMEs) in Kenya’s digital economy, the Centre for International Private Enterprise (CIPE) and the Kenya Private Sector Alliance (KEPSA) Foundation presented findings from the MSME Digital Economy Survey. The survey, launched in December 2022, aims to address the policy and administrative challenges faced by MSMEs in the digital space.

According to Kenya News Agency, CIPE Kenya Country Director, MSMEs are encountering significant obstacles in digitizing their operations, primarily cybersecurity risks, intense competition, and high operational costs. Kiragu highlighted the need for a collaborative effort from government, industry, and academia to develop a strategic roadmap to overcome these challenges and integrate MSMEs into the digital landscape. “Empowering MSMEs in the digital economy requires a targeted approach that addresses their unique challenges and needs,” Kiragu stated during the digital economy dialogue workshop.

The survey findings come at a time when Kenya’s digital economy is increasingly becoming a crucial driver of economic growth. Projections indicate that by 2025, the digital economy will contribute 9.24% to the country’s GDP. The National ICT Policy, which aims to increase the sector’s contribution to both digital and traditional economies to 10% of GDP by 2030, has seen the ICT sector grow by an average of 10.8% annually since 2016.

Gloria Ndekei, Executive Director of KEPSA Foundation, emphasized the importance of the digital economy for economic inclusion and growth, particularly for SMEs. The partnership between KEPSA Foundation and CIPE has been instrumental in promoting digital growth and ensuring the inclusion of private sector participation in the digital economy.

However, Kenya faces significant challenges in bridging the digital divide. While 44% of the urban population has internet access, only 17% of rural areas are connected. This disparity, coupled with gaps in basic and advanced digital skills, limits the effective use and development of digital tools and services.

Andrew Opiyo, Director of ICT at the Ministry of Information, Communications and The Digital Economy, assured that the Ministry is committed to collaborating with private sector players and development partners to leverage Kenya’s position as a leading digital economy in Africa. “Our Ministry will work with stakeholders to bring together diverse perspectives, experiences, and resources for an inclusive, sustainable, and thriving digital economy,” Opiyo said.