AfDB condemns government for failing to provide Kenyans with affordable, reliable internet access

AfDB condemns government for failing to provide Kenyans with affordable, reliable internet access

Lack of affordable, reliable internet access has left Kenyan businesses and consumers at the mercy of international markets, analysts from the African Development Bank (AfDB) have affirmed. The international lender has called on governments across the continent to provide an internet infrastructure that supports local businesses and gives otherwise small-scale traders access to foreign markets.

The AfDB has noted that over the past decade, Kenya and its counterparts across the continent have seen rapid economic growth tied to a commodities boom that began in the early 2000s, followed by a commodities bust. While the boom resulted in some improvements in the average African citizen’s life, most states and their populations still face serious developmental constraints.

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"Africa’s dependence on commodities has put growth prospects at the mercy of international markets, resulting in varied, episodic and skewed economic development."

AfDB Market Analysts, Heinrich Krogman and Nkululeko Khumalo.

The majority of African consumers and producers still face considerable barriers to doing business. The distances between consumers, retailers, and upstream suppliers, in conjunction with poorly developed infrastructure, mean that markets are somewhat isolated from their immediate geographic location.

As many as 40,000 Kenyans have secured work online, ranging from transcription services to software development on sites like Amazon’s MTURK and the Kenyan-owned KuHustle platform.

This isolation also means that competition is limited which adversely affects price, variety, and ultimately restrains innovative potential.

The consequential, overarching issue arising from this is the limited economic participation within and among African states.

"Fortunately, the march of progress has delivered a means of conducting business that transcends all these constraining factors – e-commerce. The opportunity to market, buy and sell goods over the internet primarily offers consumers more convenience: more options are available, occasionally at better prices, and with more information."

AfDB Market Analysts, Heinrich Krogman and Nkululeko Khumalo.

The researchers explain that it also affords suppliers, notably SMEs, better market reach, as markets can be better targeted and extended beyond immediate location, at more affordable prices since overheads from traditional brick and mortar operations can be avoided and numerous business functions either automated or outsourced.

E-commerce requires that consumers and producers have access to the internet on devices able to run applications or access web pages.

These developments come just as Kenya has launched a digital skills training program dubbed Ajira to enable 1 million young people to secure freelance online work in the next year

Kenya has the highest rate of youth unemployment in East Africa, according to a World Bank report.

However, as many as 40,000 Kenyans have secured work online, ranging from transcription services to software development on sites like Amazon’s MTURK and the Kenyan-owned KuHustle platform.

As e-commerce makes markets and opportunities more accessible its development could benefit the marginalized members of society, the duo explains.

AfDB research indicates that it allows people who lack access to capital to pursue opportunities that weren’t economically feasible via old brick and mortar operations. Women in isolated rural settings subject to traditional gender roles would also benefit as they would be able to engage in long distance sourcing and selling.

The opportunity to market, buy and sell goods over the internet primarily offers consumers more convenience.

 

They state however, that e-commerce does require that consumers and producers have access to the internet on devices able to run applications or access web pages.

It’s also helpful if options are available to affect payment electronically, but this is not a prerequisite for e-commerce, rather a facilitating factor.

A recent increase in mobile technology uptake and the widespread use of ‘mobile money’ in Kenya nad Africa at large inspires some confidence that all the necessary components are present to build a growing e-commerce sector.

"Sadly, this is not enough. Studies show that e-commerce sales can suffer from a lack of consumer trust in the absence of comprehensive, enforceable, consumer protection laws. Furthermore, even though transactions occur online suppliers might face order fulfilment issues given poor infrastructure and cross-border trade barriers. Less than half of all African countries have comprehensive online consumer protection legislation, and African states consistently rank at the bottom of the World Bank Logistics Performance and Doing Business indexes."

AfDB Market Analysts, Heinrich Krogman and Nkululeko Khumalo.

The duo say that the adoption of mobile broadband connections seems to be “the best solution in the short to medium term as wider coverage can be granted at lower initial investment cost.”

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