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Overview of Technology-Driven Priorities

Following the outbreak of the pandemic, the Government deepened the use of digital finance to stimulate and support economic activity and thus – recovery. Measures were implemented to reduce the cost of mobile transactions and internet banking, and to enhance cashless payments, with the objectives to support the economy and reduce the spread of Covid-19.

The specific initiatives included removing transactions costs between mobile money wallets and bank accounts, lifting mobile money transfer costs for amounts below KES 1,000, and increasing the daily limit for mobile money transactions to KES 150,000. Subsequently, the country saw a significant growth in the uptake of digital services.

The Government relied on the use of digital payment platforms to wire funds to targeted beneficiaries under the enhanced cash transfer programme. This programme increased household spending levels, thus supporting economic activity and recovery.

As a final point, the increased use of digital platforms in the work-from-home model has ensured economic activity does not stop amidst the pandemic. Most businesses which swiftly recovered from the adverse effects of the pandemic have successfully adopted digital platforms.

Technology Behind the Government Procurement Processes in Kenya

The Integrated Financial Management Information System (IFMIS), fully scaled in 2013, automates end-to-end financial management related to budget estimates, supplementary budgets, annual projections, procurement, payment processing, and financial reporting.

IFMIS has given every citizen the opportunity to transparently participate in Government tenders. The system provides a single source of truth for Government financial transactions and ensures they are readily auditable by oversight and investigative bodies.

The generation of standardized financial reports in IFMIS enables comparative analysis of the performance of government entities; the consolidation of financial statements across the Government; as well as improved access to public financial information for the general public. For the latter, through IFMIS the Government requires all its entities to upload tenders and contract awards for public information and accountability, thus helping reduce procurement red-tape and graft.

Most importantly, IFMIS enables progress towards a shared prosperity, through proactive inclusion in public procurement tenders of vulnerable groups like youth, women and persons with disabilities.

Next Steps in Kenya’s Digital Government Journey

Beyond ongoing enhancements to the IFMIS system, in September 2021 the Government closed a tender for Kenya’s electronic government procurement (e-GP) system.

Once the e-GP system is implemented, all procurement processes shall be conducted online, including supplier registration, procurement planning, tender- and contract- management, etc. E-GP will integrate with other government systems, in order to enhance efficiency, transparency and accountability.

Based on experience in other jurisdictions, we estimate that the e-GP solution will realize significant cost-savings in the magnitude of 10%-15% of the total government public procurement expenditure.

For the e-GP system to attain its transformative potential, it will first be piloted with ten Ministries, Departments and Agencies for the Financial Year 2022-2023, and then fully rolled out the following year. By 2024, we expect to achieve three key milestones, namely:

  1. Over 90% of all procurement opportunities being handled by the e-GP system
  2. Over 70% of all public entities fully using the system
  3. 100% of all procurement transactions passing through IFMIS

Key Implementation Challenges for Digital Transformation Projects

The biggest challenge in implementing IFMIS was resistance to change. Coming from a purely manual transaction system, this was not unexpected, so we had a Change Management Plan ready. The latter involved the use of events, media campaigns, talk shows and trainings to sensitize users and suppliers on the benefits of the new system.

Following the sensitization, we focused on equipping the users with the skills and know-how to use the system. The IFMIS Academy in partnership with the Kenya School of Government rolled-out physical training and online modules to reach our dispersed user network.

Poor ICT infrastructure in some counties resulted in further challenges with rolling out the system nation-wide. This is currently being addressed progressively by the relevant authorities.

Regarding e-GP, we foresee challenges with ICT capacity of small businesses, internet connectivity across the country, cyber security, data protection, and system integration with Government and other stakeholder systems. With our experience implementing IFMIS, we expect resistance to change, so we have planned targeted and large-scale sensitization and capacity-building initiatives.

Upcoming Digitization Measures

Going forward, the Government will continue to leverage on technology and digital platforms to support service delivery and resource mobilization. Specifically, we will implement measures and reforms aimed at further deepening the financial markets, enhancing access to financial services, and improving efficiency while maintaining financial stability.

This is supported by a focus on ICT infrastructure through expansion of the National Optic Fibre Backbone Broadband, upgrading the terrestrial cable network, and operationalizing the Konza Data Centre.

From a policy perspective, we recognize Kenya’s established lead in digital finance, and will be fast-tracking regulation of the sector with the aim of protecting consumers.

Finally, the Government will continue to enhance ICT skills and innovation by scaling up the Digital Literacy Programme, the Ajira Programme and the Presidential Digital Talent Programme.

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