The growth of Kenya’s ICT sector has been hampered by the high cost of doing business according to A SWOT analysis contained in a cluster study by the Kenya Institute for Public Policy Research and Analysis (KIPRA). The Nairobi ICT cluster study was necessitated by Kenya’s recognition that competitiveness and productivity improvement is necessary for economic growth and transformation as envisioned in Vision 2030 and Private Sector Development Strategy.
The policy objectives of the ICT cluster study are to inter alia improve the business environment for the ICT sector, increase the ICT cluster’s export potential, foster and strengthen relations among ICT players, develop sharing of infrastructure, set up ICT systems security policy in the cluster and mobilise resources for the development of the cluster.

The study—presented at a consultative forum in Nairobi today-- focuses on the technology that assists in the production, manipulation, storage, communication and dissemination of information including data, text, pictures, voice and video over long distances using relevant hardware and software. However the study does not include broadcasting (radio and television), print media and/or postal services.

According to the study, other factors militating against the growth of the ICT sector include regulatory challenges such as high taxation, costly licences, and stiff labour laws. Others are lack of access to capital, stiff competition, influx of cheap substandard imported goods, influx of pirated goods and cable vandalism.

But it’s not all doom and gloom. The ICT sector already has a number of different service and product providers who provide a myriad of ICT services and goods which are largely accessible to a large proportion of the population. There is also interest in developing the BPO sub-sector in Kenya as articulated in Vision 2030, not to mention that there are a number of innovations in the ICT sector which contribute to the socio-economic development of the country.

Notably, the ICT sector is growing rapidly, driven by a high demand for ICT goods and services. Besides, huge investment opportunities exist in the ICT sector targeting both the local and export markets, with the potential in developing a top BPO destination as envisioned in Vision 2030.

“To encourage the development of the ICT cluster, an Action Plan with the objectives and activities to be undertaken each indicating expected outcome, responsibility, timeframe, performance indicators and resource requirements will be developed”, the study says. The Action Plan includes improving the business environment for the ICT sector, increasing the ICT cluster’s export potential and fast-tracking ICT skills acquisition and promoting technological capabilities, among others.

Kenya ICT Board Chief Executive Paul Kukubo said the ICT Policy 2006 will soon be modified to be sub-sector specific, for instance BPOs and software development.
“We are currently working with Accenture Consulting to position Kenya as an outsourcing destination”, said Kukubo.