The digital world is rapidly emerging as a transformative economic force, leveraging technology to drive significant changes in economic, socio-political, and cultural spheres. In Kenya, the launch of M-Pesa—a mobile money service— set the stage for the country’s entry into the digital economy. Across Kenya and the African continent, this digital evolution has been fueled by a sharp rise in internet penetration. As a result, online business interactions have become the norm, bringing improved customer experiences, faster processes, and easier access to products and services.
The widespread availability of affordable smartphones in Kenya has played a pivotal role in enabling economic diversification. These devices are not just communication tools but powerful gateways to the internet, giving millions access to a wealth of opportunities. This digital acceleration is occurring amid longstanding challenges such as weak institutional capacity, pervasive inequality, and underemployment. While the digital wave is widely seen as a positive force, scholars are only beginning to explore its deeper implications for society’s economic, political, and social structures.
The impact of the digital economy extends beyond commerce, particularly in countries like Kenya, where politics heavily influences business and the broader economy. In developed nations, there tends to be a clearer separation between business and politics, but in Kenya, the two are deeply intertwined. The rise of digital tools has significantly influenced Kenya’s political culture. Politicians have turned digital platforms into campaign tools, with free Wi-Fi hotspots in rural areas becoming part of election promises. The 2013 general election marked a shift in political branding, with younger politicians identifying as the “digital team” while their older counterparts were humorously labeled the “analog brigade.” However, the election also sparked controversy when it was revealed that then-President-elect Uhuru Kenyatta had engaged Cambridge Analytica for campaign consultation.
More recently, allegations have surfaced that the government, in collaboration with Safaricom, restricted internet access during protests by Generation Z against tax hikes. These actions have fueled social media campaigns advocating for greater competition in the telecommunications sector to challenge Safaricom’s dominance. The concentration of power within a single internet provider highlights a growing disconnect between Kenya’s government and its increasingly tech-savvy population. The dominance of one provider not only stifles competition but also raises concerns about the potential for digital authoritarianism.
Kenyan entrepreneurs have embraced the digital economy as a means of adapting to a changing landscape. This includes economic migrants with easy access to capital, established multinational corporations, and globally connected refugee entrepreneurs benefiting from foreign remittances. In the service industry, the digital economy has helped level the playing field, enabling local businesses to compete with larger players.
The benefits of the digital economy are undeniable, but the rapid adoption of technology has also brought turbulence. Job losses driven by technological advancements, particularly artificial intelligence (AI), are becoming increasingly common. For example, tasks like transcription and data entry, which many Kenyan freelancers once relied on, are now being automated.
Kenya’s digital transformation is reshaping its economy, politics, and society. From empowering entrepreneurs to influencing political campaigns, the digital wave has touched every aspect of life. However, challenges such as monopolies, tech-induced disruptions, and socio-economic inequalities remain pressing concerns. By fostering fair competition, protecting internet freedoms, and addressing the societal impacts of digital disruptions, Kenya has the potential to solidify its position as a leader in Africa’s digital economy. As the country continues to navigate this digital revolution, the focus must remain on ensuring that the benefits are equitably distributed and the risks are carefully managed.
John Maina Githinji is a Socio-Economic and Political Analyst
