According to the World Bank, the digital economy makes up more than 15% of the global GDP. The Kenyan digital economy is one of the fastest-growing sectors in Kenya and is expected to contribute 9.2%, translating to USD 23.0 billion of Kenya’s GDP by 2025. The main contributors driving growth in the digital economy include the e-commerce industry like Jumia and fintech services like M-PESA, which had a return of Ksh 117.2 billion in 2022.
With over 58.4% of the world’s population (4.26 bn) on social media and more than 2.0 hours of average time spent on social media, the world is fast taking advantage of social media to drive business growth. Kenya is ranked among the top countries in Africa in terms of digital economy development and digital infrastructure.
98% of Kenyans own SIM cards, half of the population uses smartphones, and 65% have internet access.
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Companies have had to step up and leverage social media platforms to tap into e-commerce in addition to the traditional way of doing business. The rise of e-commerce in Kenya has been a major creator of new jobs, especially among the younger generation, in addition to the growth in the industrial sector. E-commerce has led to the development of more storage warehouses for online businesses, resulting in higher yields for the industrial sector.
Businesses are using social media to promote and market their businesses and integrating social media influencers in their quest to gain a larger customer base and more trust in the online market.
The government is expected to earn more taxes from the social media sector if the finance bill is passed with the 5% withholding tax proposal.
