The digital divide, the gap between those who have access to technology and those who do not, remains a significant challenge to trade, particularly in low-income countries like Kenya.

Despite the rapid growth of digital trade, this divide continues to hinder the full potential of the digital economy, limiting growth in the sector. Digital trade, encompassing both digitally delivered services and physically delivered goods ordered online, has seen significant global growth.

According to the UN Trade and Development (UNCTAD), digital trade has gained traction globally with over 55 per cent of services now delivered digitally.

“Digital trade is transforming the global economy, with over 55 per cent of services now delivered digitally. However, digital divides remain a significant barrier, particularly in low-income countries lacking the infrastructure to participate effectively,” the agency notes. Notwithstanding the rapid growth of Kenya’s adoption of digital trade, especially in e-commerce, it has significantly been slowed down by the digital divide in the country.

Much as Kenya has made progress in e-commerce adoption, ranking third in Africa with a 46.7 per cent penetration rate. This is behind Egypt, which came top with a 55.4 per cent e-commerce penetration and South Africa 49.4 per cent.However, challenges such as limited digital infrastructure remain a significant barrier to growth in the sector. These hinder the ability of businesses and consumers to participate fully in the digital economy, slowing down the adoption of digital trade.

This has contributed significantly to the slow adoption of digital trade as this limits the ability of businesses and consumers to participate in the digital economy.

The limitations include limited access to fibre and broadband connectivity due to the high costs of installation and use, low availability of spectrum for wireless as well as low availability of public access points and shared access to devices.

Poverty and high rates of illiteracy also limit participation in digital commerce. According to research, about 36 per cent of Kenyan households live below the poverty line, which makes paying for the internet subscription required for online shopping unaffordable.

Cybersecurity threats

Illiteracy also contributes to the challenges facing the adoption of the digital economy as 38.5 per cent of the Kenyan adult population is illiterate, which results in communication challenges and lack of access to information limiting their participation.

Also, cybersecurity threats, poor governance and instability constrain the success of the digital economy in Kenya. Insufficient regulation, uncontrolled access to digital infrastructure, and lack of digital hygiene influence all participants in the digital economy to cybersecurity risks and threats.

Other digital divide issues include no access to digital devices, lack of government ICT strategies, lack of internet security, and limited use of the internet.

In an attempt to address the digital divide and accelerate the digital economy, the Kenyan government earlier this year received a $390 million (Sh50.3 billion) grant from the World Bank to support the development of the digital economy.

The project, dubbed the ‘Kenya Digital Economy Acceleration Project (KDEAP),’ was to be carried out in three phases, with phase one covering digital infrastructure and services. This component aimed to increase access to high-speed internet for individuals, industry, and government, to support the growth of the digital economy and strengthen Kenya’s role as regional digital leader.

The phase one was also to cover digital skills and markets, this component’s goal was to equip young Kenyans with digital skills and strengthen their abilities to access and compete in domestic and regional markets through skills development. It was also meant to provide mechanisms to improve access to affordable devices and by enhancing the enabling environment for e-commerce to support Kenya’s role as a regional digital hub.

Kenya had adopted a digital economy blueprint meant to further develop the ICT sector and e-commerce activity which propelled the growth of the e-commerce sector.