Discussion Paper No. 354 of 2024 on Addressing Kenya's Digital Divide: County Disparities and Strategies for Inclusive Growth

Abstract

The study investigates the state of digital divide in Kenya by constructing a comprehensive composite Digital Divide Index (DDI) across five pillars of the digital economy: digital infrastructure, digital government, digital business, digital skills and values, and innovation-driven entrepreneurship. Motivated by the national objective of fostering an inclusive digital economy, this study aims to identify the extent of the digital divide across different demographic, socio-economic, and geographic groups in Kenya. The findings reveal that Kenya experiences a notable digital divide with an overall DDI score ranging from 0.12 to 0.86, indicating significant disparities across the country's counties. The highest levels of the digital divide are observed in counties such as Turkana with a DDI score of 0.12, while the lowest levels are in Nairobi City with a DDI score of 0.86. Digital infrastructure: The country score is 0.45, highlighting considerable disparities, especially between rural and urban areas, with urban regions exhibiting superior infrastructure. Moderate gaps are present in gender and income levels, and age-related disparities. To address these challenges, it is recommended that the Communications Authority of Kenya allocate additional resources from the Universal Service Fund (USF) to expand digital infrastructure in underserved areas. Collaborative efforts with the private sector are also encouraged to develop affordable Internet packages and device subsidies for low-income households. Digital government: With a country score of 0.34, this pillar shows significant disparities in access to digital government services. Moderate gaps are observed across gender, age, and rural-urban divides, with income level disparities further exacerbating the divide. Enhancing digital government access may involve prioritizing the establishment of additional Huduma centres in rural areas and promoting low-cost digital financial services tailored to low-income households. Digital business: The country’s score of 0.55 indicates a moderate level of digital divide. While gender disparities are moderate nationally, they are more pronounced in certain regions, and age-related challenges are moderate. The rural-urban divide is significant, and income level disparities also impact digital business participation.