Commerce

Kenya’s digital economy growth forecast

Two women exchanging payment using their smartphones at counter

Kenya has established itself as a leader in mobile financial services and digital innovation. (Image source: GSMA)

The latest GSMA report, Driving Digital Transformation of the Economy in Kenya, projects that by 2028, Kenya's digital economy will contribute KSH 662 billion (approx. US$5.15bn) to its GDP

This growth, driven by strategic policy reforms, will accelerate digitalisation in key sectors like agriculture, manufacturing, transport, and trade. The report also forecasts the creation of 300,000 jobs and a KSH 150 billion (approx. US$1.17bn) increase in tax revenues.

Kenya has established itself as a leader in mobile financial services and digital innovation. The government, through Kenya Vision 2030 and the Bottom-Up Economic Transformation Agenda (BETA), recognises digitalisation as a cornerstone of its economic strategy. The GSMA study highlights the economic potential of expanding digital adoption and provides a roadmap to maximise these gains through targeted policies.

To maintain momentum, Kenya is focusing on digitalisation to diversify the economy, increase productivity, and create high-quality jobs, especially for the youth and rural populations. Digitalisation is seen as key to driving economic growth, increasing government revenues, and boosting socio-economic development.

Introducing the digital Africa index

In addition to the report on Kenya’s digital economy, the GSMA launched the Digital Africa Index (DAI), which assesses digital adoption and usage across Africa. The index aims to support policymakers by identifying areas for improvement to accelerate digital transformation. Kenya ranks among Africa’s top performers, underscoring the importance of progressive policies that have enabled mobile broadband adoption and innovation.

With Kenya scoring above 50, the DAI highlights its potential for growth. It also works alongside the Digital Policy and Regulatory Index (DPRI), identifying policy bottlenecks and offering benchmarks for countries aiming to boost their digital economies.

Digitalisation’s impact on economic growth

The GSMA report reveals that digitalisation in key sectors, which account for 58% of Kenya's GDP, will drive significant economic contributions by 2028, creating jobs and boosting tax revenues. In 2023, Kenya’s mobile ecosystem contributed KSH 1.2 trillion (approx. US$9.23bn) to GDP and KSH 212 billion (approx. US$1.65bn) in government revenues. However, the report highlights remaining gaps that must be addressed through bold policies to stimulate demand, reduce supply costs, and encourage investment in telecom infrastructure, mobile money, and digital services.

Closing the Internet Gap

Despite 99% of the population being covered by 3G and 98% by 4G, only 33.5% of Kenyans use mobile internet, leaving a substantial gap. The GSMA projects that this gap could shrink from 63% to 46% by 2028, bringing 1.5 million new users online and increasing mobile money adoption.

Smartphone fffordability and digital inclusion

A separate GSMA report, Barriers to Smartphone Adoption: Kenya Case Study, examines how improving smartphone affordability and access could enhance digital inclusion. While Kenya has extensive mobile coverage, high device costs prevent many from adopting smartphones. The report recommends policy measures such as tax cuts and device financing options to help millions more Kenyans access mobile internet services by 2028. Improving smartphone access would close the internet gap and increase mobile money usage, driving financial inclusion.

Angela Wamola, GSMA Head of Sub-Saharan Africa, noted, “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, catalysing productivity across all sectors and generating myriad employment opportunities for Kenya.”

Mukuru launches digital wallet Malawi

Glowing cables connecting spheres symbolising global network integration and digital communication

Mukuru launches its digital wallet in Malawi, offering secure, seamless money transfers and boosting financial inclusion across the country. (Image source: Adobe Stock)

Mukuru, a leading global financial services platform known for its advanced fintech solutions, has introduced the Mukuru Wallet in Malawi

This launch aligns with Mukuru's strong dedication to the Malawian market and addresses the rising demand for digital value storage among cash-reliant citizens who trust the Mukuru brand

The Mukuru Wallet aims to meet the increasing need for a convenient, secure, and efficient way to manage finances and facilitate money transfers. It allows users to send and receive funds both domestically and internationally, as well as store, save, and earn interest on their balances.

Mobile wallets are becoming an essential tool across Africa, offering a reliable solution for underserved and unbanked populations to access financial services. In Malawi, the Mukuru Wallet provides an alternative way to access formal banking services in both urban and rural areas.

The Reserve Bank of Malawi's (RBM) National Payment Systems report for December 2022 highlighted a 14.1% rise in mobile money users, reaching 12.2 million from 10.7 million in 2021. Pride Chiwaya, Mukuru’s country manager for Malawi, noted that this growing demand prompted the launch of the wallet.

“Mukuru is committed to driving financial inclusion, and this wallet, in response to the growing demand for money transfers, builds on the trust we have established through our growing orange booth and branch network. In addition to this, we are becoming a preferred partner for businesses and organisations in Malawi that are increasingly seeking innovative, secure and efficient payment solutions. Our mission is to equip these institutions with reliable financial tools using our extensive network,” Chiwaya stated.

The Mukuru Wallet is tailored specifically for the Malawian market and includes two features called “Nyanja” and “Moyo.” The “Nyanja” pocket handles domestic transfers and deposits, while the “Moyo” pocket is dedicated to receiving international money transfers. A notable advantage for users is the absence of withdrawal fees from the Moyo pocket.

Mike Cook, Mukuru's head of wallet and card, added, “In addition to this, customers earn interest on the funds in their wallet on a quarterly basis,” emphasising that this encourages users to embrace digital money, thereby advancing their journey toward financial inclusion.

Cook further explained that customers, who traditionally withdraw international transfers to cover their expenses, will now receive these funds directly into their Mukuru Wallet, ensuring a smoother and more convenient process. This digital solution not only provides a safe and secure way to store money but also allows users to pay bills directly from the wallet, reducing the risks of carrying large sums of cash. As Cook stated, “Essentially, this is what financial inclusion is – providing people with the platform to be included in the mainstream economy.”

The Mukuru Wallet launch is a crucial part of Mukuru’s broader strategy to become a leading payment platform, helping emerging consumers transition from cash to digital solutions. "Importantly, it's a critical component in the business’ drive towards digital transformation in Malawi, which involves modernising financial services, enhancing user experience, and promoting financial inclusion.

These efforts collectively contribute to a more digital, efficient, and inclusive financial ecosystem in Malawi, and Mukuru takes pride in being a part of this,” said Cook.

M-PESA Ratiba introduces automatic payments

Safaricom launches M-PESA Ratiba, allowing users to set standing orders for recurring payments directly from their mobile wallets. (Image source: Adobe Stock)

Safaricom has launched M-PESA Ratiba, a groundbreaking feature within its mobile money platform, M-PESA

This new capability allows users to establish standing orders directly from their M-PESA wallets, enabling automatic and seamless payments for recurring transactions and bills.

The feature enables users to schedule transfers from their wallets on a daily, weekly, monthly, or annual basis. These payments can be sent to individuals or used for recurring expenses like bills or subscriptions. Key advantages include a hassle-free setup process and the absence of penalties for failed or cancelled transfers due to insufficient funds.

Safaricom remains committed to enhancing lives by delivering tailored digital financial services and experiences. M-PESA Ratiba is designed to provide customers with worry-free, digital payment solutions for their regular transactions and bills. According to Peter Ndegwa, CEO of Safaricom, “This innovation, the first of its kind to bring standing orders to the convenience of mobile devices, plays a key role in enhancing financial inclusion among the underbanked population while advancing the country’s progress towards a cash-lite economy.”

M-PESA Ratiba is expected to significantly impact subscription services, unlocking opportunities in sectors such as media, entertainment, technology, healthcare, education, and e-commerce. It also promises to enhance customer experiences in the financial services space. With M-PESA Ratiba, users can effortlessly manage regular payments, including rent, school fees, insurance, newspaper subscriptions, utility bills, and support for loved ones.

Kazang Pay expands in Zambia

Kazang's card acquiring service in Zambia

Kazang Pay launches in Zambia, allowing merchants to accept card payments on existing terminals, boosting financial inclusion and business growth. (Image source: Kazang)

Kazang, the prepaid value-added services (VAS) and card acquiring business under JSE-listed Lesaka Technologies, has introduced its Kazang Pay card acceptance solution for merchants in Zambia

This new offering allows merchants to easily accept card payments on the same Kazang terminals they use for selling prepaid products and services.

With Kazang Pay, merchants in Zambia can accept both VISA debit and credit cards, as well as mobile wallet payments, on their existing terminals. Settlements are made to the merchant’s Kazang wallet on the same day. Customers simply need to tap or insert their card and enter their PIN using the secure scramble PIN pad.

Kazang operates around 12,000 VAS terminals across Zambia, and the company aims to enable most of them for card payments over the next six months. Merchants benefit from low transaction fees and can avoid monthly terminal rental fees if they meet a modest transaction threshold. Accepting card payments also opens opportunities for business growth.

As Zambia’s largest VAS point-of-sale terminal provider, Kazang offers mobile money payments, cash in and out services for banks and mobile money, bill payments, airtime, Zesco, and other prepaid services—all on a single platform. The addition of card acceptance further enhances the platform’s convenience for both merchants and consumers.

Kazang Pay’s launch in Zambia follows its earlier rollout in South Africa, where approximately 60,000 small and micro merchants use the solution for card payments. Zambia currently has around 3.8 million debit, credit, and ATM cards in circulation, and about 41,000 point of sale (POS) terminals. POS transaction values have surged to K 111.4 billion (approx US$5.2bn) in 2022, up from less than K 20 billion (approx US$935mn) in 2018, according to the Bank of Zambia.

Leon de Wit, managing director at Kazang Zambia, said, “Zambia has made enormous strides in terms of financial inclusion, with card usage and penetration growing at a rapid pace. With Kazang Pay, merchants can now easily accept card payments on the same all-in-one terminal they already use for vending of VAS products.

“Card transactions help merchants to grow basket sizes and potentially attract more customers, and at the same time, reduce the risks and costs of handling cash. Moving towards digitalised payments will also enable merchants to track sales, manage cash flow, and create a footprint that could make it easier for them to access loans.”

Ashley Naidoo, director of Kazang Pay in South Africa, added, “Our Zambian merchants have eagerly embraced our card acquiring service as a valuable part of our one-stop solution. Following the launch of Kazang Pay in Zambia, we have seen higher VAS sales across our merchant base and much-improved merchant retention, and with our card acquiring solution, we now appeal to a broader merchant base.”

Airtel Nigeria shifts to hybrid energy solutions

Airtel Nigeria embraces renewable energy to reduce diesel costs, boost operational efficiency, and enhance sustainability amid revenue growth. (Image source: Adobe Stock)

Airtel’s Nigerian subsidiary has announced a major initiative to cut back on its diesel usage. This step aims to reduce the company’s carbon footprint while lowering operational expenses linked to diesel consumption at its facilities.

"Let me clarify that we spend N28 billion on diesel alone every month. And our sites across the country guzzle over 22 million litres of diesel every month. We spend this huge amount to ensure that there is no downtime at any of our sites across the country,” stated Femi Adediran, Airtel Nigeria’s chief communications officer.

To tackle this, the telecom operator has decided to implement a hybrid energy system that combines solar power with access to the electricity grid.

“To maintain our service and provide our valued customers with transparent offers, we are now using solar energy and other renewable energy sources to power our more than 15,000 base stations,” Adediran added.

This transition to cleaner energy is part of a broader sustainability effort, ensuring more reliable energy for its operations amid escalating diesel prices. In March 2023, the Nigerian Communications Commission (NCC) urged mobile network operators to shift from fossil fuels to renewable energy sources.

According to a report released by the company in September last year, Airtel's revenue in Nigeria saw a 23% increase, fueled by the expansion of voice, data, and mobile money usage.

Furthermore, Airtel Africa's customer base in Nigeria grew by 7.8%, reaching 59.8 million, while its mobile money user base rose by 19%, hitting 36.5 million.

This growth occurred despite significant challenges, including the devaluation of the naira and high diesel costs.

"Despite the challenges of rising diesel prices in Nigeria, we aim to limit the impact with continued operational leverage and further cost efficiencies to deliver an improved EBITDA margin in FY’24 versus FY’23,” stated Olusegun Ogunsanya, the group CEO of Airtel Africa, at the time.