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Kenya’s digital economy is set for a significant boost, with a new report from the GSMA projecting that digital advancements will contribute approximately $4.4 billion to the country’s GDP by 2028.

This growth, underpinned by strategic policy reforms, is expected to accelerate digitalization across key sectors such as agriculture, manufacturing, transport, and trade. The report also forecasts the creation of 300,000 new jobs and an increase in tax revenues by $1 billion over the same period.

Kenya has long been recognized as a pioneer in mobile financial services and digital innovation. The government has identified digitalization as a central pillar of its economic strategy, with Kenya’s Vision 2030 and the Bottom-Up Economic Transformation Agenda (BETA) both emphasizing the role of digital technologies in driving economic growth. The GSMA report, Driving Digital Transformation of the Economy in Kenya, outlines the economic benefits of expanded digital adoption and provides a roadmap for maximizing these gains through targeted policy initiatives.

To sustain this economic momentum and create high-quality jobs—particularly for young and rural populations—Kenya is focusing on digitalization as a key driver of growth, increased government revenue, and socio-economic development.

Alongside the report, the GSMA introduced the Digital Africa Index (DAI), a new tool that measures digital adoption and usage across Africa. The index is designed to assist policymakers in identifying areas for improvement and to accelerate digital transformation. Kenya is among the top performers in Africa, reflecting the country’s progressive policies that have fostered mobile broadband adoption and digital innovation.

With Kenya scoring above 50 on the index, alongside a few other African nations, the DAI highlights the importance of strong policy and regulatory frameworks. It also provides insights into the policy bottlenecks that need to be addressed to support further growth in the digital economy.

Driving growth through digitalization

The GSMA’s report underscores the transformative potential of digital technologies in key sectors that account for 58% of Kenya’s GDP. By 2028, the adoption of digital tools in agriculture, manufacturing, transport, and trade is expected to drive substantial GDP growth, generate new employment opportunities, and boost tax revenues.

In 2023, the mobile ecosystem contributed $8 billion to Kenya’s GDP and $1.4 billion to government revenues. Despite this, the report notes that significant gaps remain. To address these challenges, the GSMA recommends bold policy actions aimed at stimulating demand, reducing supply costs, and encouraging investments in telecom infrastructure, mobile money services, and other digital platforms.

While Kenya has made significant strides in expanding mobile network coverage—with 99% of the population covered by 3G and 98% by 4G—only 33.5% of the population currently uses mobile internet. The GSMA projects that this internet usage gap could shrink from 63% to 46% by 2028, bringing over 1.5 million new users online and driving increased mobile money adoption.

One of the primary barriers to wider internet use is the high cost of smartphones. The GSMA’s complementary report, Barriers to Smartphone Adoption: Kenya Case Study, explores how improving access to affordable smartphones could enhance digital inclusion and expand the country’s digital economy. The report calls for policy measures such as tax reductions on devices and the expansion of device financing options, which could enable millions more Kenyans to access mobile internet services by 2028.

Key policy recommendations

To fully unlock the potential of Kenya’s digital transformation, the GSMA report outlines several key policy recommendations that could shape the country’s digital future. One of the primary suggestions is reducing sector-specific taxes, particularly within the telecommunications industry. Lowering these taxes would encourage further investment in infrastructure and ultimately lower costs for consumers, making digital services more accessible across the country.

Another important recommendation focuses on streamlining the process for renewing licenses. By simplifying and speeding up the procedure, Kenya could provide greater certainty for investors, which, in turn, would stimulate the expansion of networks and digital services.

Improving the affordability of devices is also critical. The report suggests implementing tax reductions and expanding financing options to help lower-income households access smartphones and internet-enabled devices. This would bridge the digital divide, allowing more people to participate in the digital economy.

Lastly, the report highlights the need to invest in digital skills development. Ensuring that the population, especially the youth, is equipped with the necessary digital competencies will be essential for Kenya to maximize the benefits of its growing digital infrastructure and economy.

Angela Wamola, Head of Sub-Saharan Africa at GSMA, emphasized the importance of policy action: “Kenya has made remarkable strides in expanding mobile coverage and services. However, substantial gaps persist. Bold policy initiatives are necessary to boost demand, lower supply costs, and foster investment in digital infrastructure. Such measures promise broad benefits beyond mobile, catalyzing productivity across all sectors and generating myriad employment opportunities for Kenya.”

As Kenya continues to position itself as a leader in digital innovation, the GSMA report serves as a timely reminder of the untapped potential in the country’s digital economy. With strategic reforms and targeted investments, Kenya is well on its way to becoming a fully digitalized economy, driving inclusive growth and creating opportunities for millions of people.

As the digital landscape in Kenya evolves, the government’s commitment to fostering innovation through policy and investment will be key to realizing the country’s Vision 2030 and ensuring that digitalization benefits all sectors of the economy.