Kenya has the potential to unlock Ksh.1.4 trillion of additional economic value over the next decade by accelerating the adoption of cloud computing.
This is according to a new report commissioned by Amazon Web Services, Inc. (AWS), an Amazon.com, Inc. company (NASDAQ: AMZN), quantifying the relationship between public cloud computing adoption, national productivity, and economic growth in Sub-Saharan Africa (SSA).
According to the study, in 2021 Kenya added 0.08pc to the GDP, amounting to Ksh 12.9 billion of economic value.
“Over 91pc of this impact can be attributed to the national productivity gains or so-called “spillover effects” on the economy. The remaining 9pc was driven by cloud spending from both public and private organizations in the SSA region” the study reveals.
On average, SSA countries experience a 0.02pc increase in GDP for every 1pc increase in cloud penetration.
An increase of 1pc in cloud adoption by Kenyan organizations will yield an average GDP increase of 0.03pc, above the SSA average at 0.02pc, but behind the SSA regional leader, South Africa, where 1pc cloud adoption yields 0.06pc GDP increase.
Kenya has ambitious plans to diversify its economies through digitization. 26pc of organizations in Kenya adopted cloud computing in 2021, versus 49pc in Western Europe and North America, showcasing the potential there is to improve cloud penetration.
Amrote Abdella, General Manager for Sub-Saharan Africa at AWS, said: “This report underscores the immense potential for SSA to harness cloud computing and expedite economic growth. By increasing the current average cloud penetration, the region can unlock additional economic value. AWS is committed to supporting its customers and partners in SSA, and around the world, throughout their cloud journey. We firmly believe that cloud technology will be crucial in driving innovation, boosting productivity, and scaling businesses in the region over the next decade.”
The study demonstrates that adoption of cloud computing will lead to proportionally greater productivity gains and economic impact.
“With the current forecast, the economic impact of the cloud is undeniable and is poised as a key catalyst for economic prosperity. As such, it is important for businesses in the region to invest in cloud computing technology to stay competitive and boost their economic potential,” added Abdella.
Until recently, research on the economic impact of cloud was focused on the firm-level, understanding the microeconomic benefits associated with cloud adoption.
The report further identifies four key advantages of cloud computing namely which include enhancing business efficiency and effectiveness, streamlining processes and improving outcomes; offering access to a wide range of services and enabling businesses to leverage advanced technologies.
Cloud computing will also boost productivity by facilitating collaboration, mobility, and agility within the workforce.
Additionally, it will promote environmental sustainability by reducing carbon emissions per unit of data transmitted.