, NAIROBI, Kenya, Feb 22- The telecommunications sector could become the greatest contributor to Kenya’s Gross Domestic Product (GDP) in a few years, if the momentum in the industry is sustained, a top government official has said.
Information Minister Samuel Poghisio believes that the continued developments aimed at harnessing the potential in the sector could spur even greater growth, raising its contribution to GDP six-fold from the current five percent.
“Our sector’s contribution to the GDP should be 30 percent in (the next) seven years, surpassing the contribution even by agriculture,” he emphasised.
The industry has recorded exponential growth in the last 10 years driven largely by its liberalisation which has tried to even out the playing field.
According to the World Bank, the sector has grown annually by more than 20 percent since 2000 and was responsible for a staggering 24 percent of Kenya’s GDP growth during that period.
In addition, there have been several incentives by the government that have made it possible for the country to be used as a “testing ground’ for innovative products and services.
Being at the centre of the emergence of new innovations has for instance catapulted the country as a pioneer in mobile money transfer services and mobile banking positioning the country as a global leader in financial and payment-technology innovation hub.
Mobile penetration is currently at approximately 63 percent while Internet connectivity is at 36 percent; statistics that put the country above Africa’s average.
But despite the positive accolades, some weaknesses have been highlighted. For instance, a recent report by Nokia Siemens titled ‘Connectivity Scorecard 2011’ documents that Kenya’s key weakness lies in the low penetration of broadband and internet as well as inadequate business infrastructure.
“On one hand, it is clear that the telecommunications sector and perhaps the wider ICT sector can be a source of innovation, investment and even national self-confidence,” the report showed.
“However, without the further development of other parts of the economy, specifically the development of human capital, there is a limit to how well technology can be utilised and how beneficial it can be to overall economic development,” the report further indicated.
Poghisio however observed that the government acknowledges these challenges and was working towards resolving them in order to fully exploit the sector’s potential.
Connectivity for instance is improving with the operationalisation of the fibre optic cables while the government is also trying to implement legal and regulatory reforms to make the sector competitive.
While pointing to its role as an economic enabler, the minister challenged all other sectors of the economy to embrace ICT in order to improve their efficiency and productivity.