Kenya unveils e-commerce strategy to better harness the digital economy

UNCTAD supports the East African nation to tackle challenges and boost secure e-commerce for inclusive and sustainable development.

Kenya launched a national e-commerce strategy on 13 December to fortify its position as a digital frontrunner in Africa by fostering inclusive and widespread utilization of trusted and secure e-commerce services based in the country.

Its Ministry of Information, Communications and The Digital Economy and the Ministry of Trade, Investments and Industry spearheaded the strategy, supported by UNCTAD.

“Kenya’s e-commerce strategy lays the foundation for trust-building among businesses and consumers, making e-commerce more accessible and beneficial for all, including marginalized groups,” said Shamika N. Sirimanne, director of technology and logistics at UNCTAD.

“I would like to commend the government on the strong inter-ministerial collaboration that underpinned the strategy’s development. It has been an honour for UNCTAD to support these efforts,” Ms. Sirimanne added.

Opportunities and challenges

The strategy aims to leverage Kenya’s strides in digital infrastructure, which make it one of Africa’s most advanced systems.

The nation’s internet penetration of 96% with 3G or 4G coverage, coupled with innovative mobile payment solutions like MPESA, have significantly propelled e-commerce growth.

According to the World Bank, online shopping in Kenya surged from 9% in 2017 to 16% in 2021, the third highest rate in Africa after Mauritius and Tunisia.

The strategy stems from an UNCTAD eTrade readiness assessment, which identified persistent challenges to be tackled to boost the e-commerce ecosystem in Kenya.

They include barriers to access to digital devices for many citizens, uneven network coverage primarily concentrated in specific regions and high costs of digital payment transactions.

Others are regulatory hurdles related to data privacy, dispute resolution mechanisms at local, regional and global levels, and enforcement of existing legal frameworks.

An ambitious vision

Responding to this complex background, the strategy envisions inclusive participation for all Kenyans regardless of geographic location, age, gender or abilities.

It also aims to reduce the costs of e-commerce, speed up delivery and increase confidence in online markets.

To do so, authorities will strengthen laws and regulations, provide universal ICT access, facilitate trade and minimize friction at borders, provide reliable payment services, improve the necessary skills for e-commerce and enhance access to finance for all businesses. 

Cabinet Secretary for the Ministry of Trade, Investments and Industry, Rebecca Miano, said: “The Kenya national e-commerce strategy is not just a document. It is our visionary response to the opportunities and challenges presented by the digital age.”

She added: “The strategy lays the foundation for a dynamic, inclusive and sustainable digital economy that empowers businesses and individuals alike.”

The Cabinet Secretary for the Ministry of Information, Communications and The Digital Economy, Eliud Owalo, said: “This e-commerce strategy is a big leap towards addressing the bottlenecks that have been stifling e-commerce in the country.”

The strategy also focuses on businesses, aiming to increase their e-commerce adoption, expand their market reach and enhance visibility in global markets, including under the African Continental Free Trade Area.

“Kenya’s e-commerce industry eagerly anticipated this strategy,” said Tim Steel, CEO of Copia Global, one of the recipients of the country’s e-commerce awards in 2023.

Joint forces for the future

The strategy encompasses a robust governance structure across six pillars, to be overseen by the trade ministry in close cooperation with the ICT ministry and in collaboration with diverse public and private stakeholders.

This set-up recognizes the need for strong institutional frameworks, coordination mechanisms, rigorous monitoring and reporting systems to ensure effective implementation.

Development and technical partners will help the country navigate challenges. UNCTAD will support the strategy’s implementation and help empower the national e-commerce committee. 

Kenya’s strategy complements the East African Community’s e-commerce strategy, aimed at facilitating e-commerce trading within and between its partner states.

The work on Kenya’s e-commerce strategy is supported by the core donors of UNCTAD’s e-commerce and digital economy programme: Germany, Sweden, Switzerland and the Kingdom of the Netherlands.

https://unctad.org/news/kenya-unveils-e-commerce-strategy-better-harness-digital-economy