Samuel Matonda is a marketing and trade specialist, currently serving as the Chief Executive Officer at the Kenya National Chamber of Commerce and Industry (KNCCI). He is a seasoned MSME Business Development and Trade expert and a key advocator of promoting Kenya export.
Mr. Matonda presented the field of digitalisation in Kenya. The lecture was transcribed.
Presentation by Samuel Matonda
© Jonas Leupe, Unsplash.
“I could start by giving a brief about the Chamber. The Chamber was established in 1965, and our mandate is to protect and develop the interests of the business community. We are in a family of 177 Chambers globally, whereby we are also belonging to regional networks of the Chambers. In Kenya, we have seven county chapters. Our plan is to have a vibrant and prosperous business community with a mission of facilitating and promoting a sustainable business environment for economic growth and prosperity. We operate on trade development, SME (Small and medium-sized enterprises) development, and we are also focusing on county development.
We are keen to support the investment of entrepreneurs and the SME sector which accounts for more than 80 percent of employment in Kenya.
We are keen to support the investment of entrepreneurs and the SME sector which accounts for more than 80 percent of employment in Kenya. And that is very key and very important for us to note. Also the Chamber is cognizant of the booming space for start-ups in Kenya and in line with MSME (Micro, Small and Medium-sized Enterprises) agenda, we have put in place activities that are geared to share information and the nature, they now send opportunities to attain meaningful establishments, which brings me to today's topic because most of the start-ups, the SMEs and MSMEs, are actually beneficiaries or they have ventured into what we are talking about: digitalisation. Now, if I could say something about the digitalisation landscape in Kenya, we say that arguably Kenya is one of the leading nations in Africa, and indeed a global pioneer in the technology innovations.
Key among them is of course M-Pesa. The achievement of a robust financial deepening and financial inclusion fronts is indeed attributable to the Kenyan ingenuity innovations defined by processes such as the products that were invented like M-Pesa. We have another one called e-Mola, another is PesaLink and of course, Pesapal.
The platforms have had profound impacts on the economy, which I could just summarise as for instance, M-Pesas rapid expansion has made all the urban and rural populace having mobile telephone connections, and this has lifted an estimated two percent of Kenyan households into being bankable through the M-Pesa platform. M-Pesa has also enabled more than 185,000 women to move out of subsistence farming and into business or sales occupations. Now they're able to transact and do conduct trade, just using the M-Pesa platform.
The achievement of a robust financial deepening and financial inclusion fronts is indeed attributable to the Kenyan ingenuity innovations defined by processes such as the products that were invented like M-Pesa.
Also M-Pesa has significantly reduced transaction costs in Kenya. In the past (before M-Pesa) you had to have a bank account and you had to have a minimum amount of money to open up an account. But with M-Pesa you can even use M-Shwari and deposits, make your savings through one of the products under M-Pesa, that is M-Shwari, at no cost. Transferred to your M-Pesa platform where you are able to send or buy credit, pay for fuel, purchase what you want to purchase, pay for energy or Kenya power, pay for any other service and that has really enhanced and reduced the cost of transactions.
Founded in 2007 by Vodafone Group and Safaricom, the largest mobile network operator in Kenya, M-Pesa has since expanded into other countries in the region. Some of them are Tanzania, Uganda, Mozambique, DRC, Lesotho, Ghana, Egypt, even in Afghanistan, South Africa and most recently Ethiopia. Mobile money users are more financially resilient and can protect themselves better against economic and other shocks.
The Chamber embraces digitalisation and we have several projects that depict and confirm this digitalisation. As a Chamber we offer the Certificate of Origin. This is a document, an instrument of trade, globally accepted that indicates the origin of our products. And the Certificate of Origin has been issued manually over years, but now through the partnership with TradeMark East Africa, we have digitalised the Certificate of Origin and we are able to facilitate trade even better.
We are soon launching an e-commerce system through the same partnership with the TradeMark East Africa, a marketplace for women and SMEs. This is where SMEs, especially women, upload their profiles into a system. They are able to ask questions and get answers and they are able to get access to markets globally through that digitalisation, that we are doing in partnership with the TradeMark East Africa.
There is an ongoing Africa Internet of Things and Artificial Intelligence Challenge in Kenya.
Also in the Chamber, there is an ongoing Africa Internet of Things and Artificial Intelligence Challenge in Kenya; this is to provide the young innovators and start-ups aspiring to be future innovators and entrepreneurs. We are targeting innovators looking forward to establishing their start-ups. With the brain incubation program, the Kenya IoT and AI Challenge is to unleash the capacities and capabilities of these start-ups. The innovators that are keen to digitalise and play a role in this sector. These adoptions, as the solid anchor of facilitating transactions and inspiring trade for corporations, small and medium enterprises and individuals, are keys.
Digitalisation is among the Sustainable Development Goals. That is the SDG goal number nine, whereby we are able to satisfy this goal number nine through digitalisation which leads to improved and efficient business environments and the increased accessibility, connectedness and the better standards of living. Digital platforms have enabled our citizens to access financial services, health education, medical services entertainment, and of course shopping online in the context of this COVID-19 containment measures, where fiscal movements of persons, goods and services were restricted. And particularly the curfews which have also seen that the time for doing business has actually been strengthened. This is a testament that the digital capabilities built over the years have been instrumental in assuring business continuity.
Most of our youth are actually taking up this digitalisation to another level that we really appreciate.
The digital economy footprints put forward by the Government of Kenya through the Ministry of Information, Communications and Technology captures the aspirations and the plans of digitalisation mission in Kenya. It articulates the framework that includes the thematic deliverables. As mentioned herein that is we have what the role of government is in digitalisation, the deployment to business entrepreneurship. We have an issue or a key component of infrastructure prerequisites, which will facilitate digitalisation.
We have innovation driven entrepreneurship, where we have said already that Kenya plays a key role in the region and globally; digital skills and values that are keys for digitalisation to happen. And I see that most of our youth, we are bragging of the youth dividend, most of our youth are actually taking up this digitalisation to another level that we really appreciate. And thank the country for this support to the youth.
I am looking at a report that was done by one of the BMO’s (business membership organisations) in Kenya, which reckons that SMEs are the least prepared in building the digital capacities with only 20 to 40 percent as being an IT policy in place. 65 percent have web presence while less than 25 percent use cloud computing. Why cloud computing is important is because it requires less space, it is more secure and there are many other factors; even the costs: It is much cheaper. But you realize that the percentages are quite below, meaning that most of the SMEs and the start-ups are still having a long way to go in order to really embrace digitalisation. The report also recommends that for SMEs to leverage on digital technology, there is need to close the digital divide, if they are to increase the production capacity, while is remaining competitive in the global markets. The globe has become just like a village and the market is open to each and every player and entrepreneur and anything that we do, requires that we become competitive. Otherwise, will be declared redundant into whatever business we are doing.
The underlying driver is a 10 percent increase in a country's digitalisation index can lead to 0.7 percent growth in its growth domestic products. The Chamber is cognizant of this gap, especially as its members are mostly drawn from the MSME sector, across all the counties in the rural villages. We work with this sector in capacity building and training. A bulk of these initiatives needs to be in the area of increasing technical capacities that integrate into the core platforms of the industry specific functions, infrastructure readiness. Readiness, that the businesses have a need for e-commerce and also to create success to credit and financing towards digitalisation. It keeps their businesses informed on the digital and global best practices and emerging trends in the industry, advocates for government policies that promote digital adoption and creates networks through arranging exhibitions with other global buyers.
We will continue taking a lead, and our innovators are actually thinking of new ways and new innovations that could take the country and the globe to another level.
Most of the exhibitions are actually now done virtually and that virtual engagement has really made the world move to another level and in industrialisation we are seeing that digitalisation is key and is going to make us move to another level. Hosting or costing a hub that promotes the theme of digital adoptions in trade and commerce among MSMEs and the start-ups is also very key.
They have been an increased number in mobile subscriptions; whereby we have an increase with more than 62 percent of Kenyans under subscribing to mobile telephony. We have fixed line subscriptions. We have also other subscriptions when it comes to telephony wireless. But then we see there is an increased number of uptake of mobile telephony, and I think whatever we talk about digitalisation is, that anybody, be it a farmer, a student going to college and maybe not being able to carry school fees in his pocket, be it an entrepreneur who wants to move from one point to the other or wants to transact and have the goods and services delivered, provided from the comfort of their desk, you will see that digitalisation has actually enhanced that. And Kenya is playing a key role in that space.
Talking about the region where some regional economies are also coming up in East Africa most of the Kenyans have played a key role in those economies and those countries. We will continue taking a lead, and our innovators are actually thinking of new ways and new innovations that could take the country and the globe to another level.”
We would like to thank Samuel Matonda for his presentation!