Connect with us

Hi, what are you looking for?

Capital Business
Capital Business
According to WB sector has grown annually by more than 20 percent since 2000/FILE

Kenya

Telecommunications to be top GDP earner

According to WB sector has grown annually by more than 20 percent since 2000/FILE

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.

Advertisement. Scroll to continue reading.

“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.

Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...