[{"bbox": [85, 154, 323, 185], "category": "Section-header", "text": "# 2 RATIONALE"}, {"bbox": [85, 220, 234, 246], "category": "Section-header", "text": "## 2.1 Context"}, {"bbox": [85, 268, 405, 292], "category": "Section-header", "text": "### i. Political and Financial outlook"}, {"bbox": [85, 298, 1144, 469], "category": "Text", "text": "Kenya has been building its ‘digital economy’ for over a decade with ICT leading companies such as Safaricom and electronic payment systems such as M-PESA. Its now advanced digital ecosystem attracts most foreign capital for tech-start-ups in Sub-Saharan Africa. On the other hand, high inequality prevails and poverty remains stagnant at 36% of the population. Poverty increased by 4% in 2020 as a consequence of the CoViD-19 pandemic, adding 2 million poor and erasing five years of progress. Gender inequality is persistent and particularly in digital skills. Digitalisation can worsen or improve such inequalities depending on whether the ‘digital gap’ prevails."}, {"bbox": [85, 486, 1144, 657], "category": "Text", "text": "Kenya is an EU's strategic partner in the stability and security of the Horn of Africa, in climate action and in a green and circular economy. As a growing lower-middle income country, Kenya is also a regional economic hub, a growing market for European companies, and an ally on universal values and multilateralism. In May 2021, the Council Conclusions on the Horn of Africa identified Kenya as a key partner for the EU and, in June 2021, EU and Kenya agreed to launch a Strategic Dialogue and engage in a bilateral Economic Partnership Agreement negotiation. Digitalisation is playing and can play an even more important role in all these fronts."}, {"bbox": [85, 675, 1146, 928], "category": "Text", "text": "The COVID-19 pandemic hit Kenya's economy during the second quarter of 2020 leading to a 5.5% contraction of GDP compared to a 5.1% growth during the same period in 2019. The services sector was particularly affected, notably accommodation, transport, education and professional services. The ICT sector was more resilient and maintained a positive growth in 2020 albeit at a lower level than in 2019. Overall, the economy contracted by 0.3% in 2020 but a steady recovery is observed since the second half of 2020 and GDP is expected to grow by 4.9% in 2022. In response to the crisis, IMF launched a 38-month USD 2 340 000 000 recovery programme in April 2021. The World Bank also launched a USD 750 000 000 lending package in June 2021 through its third Development Policy Operation (DPO) in Kenya, complementing the USD 1 billion financial package approved in 2020 under DPO 2."}, {"bbox": [85, 949, 1144, 1173], "category": "Text", "text": "The pandemic has accelerated the digital economy, e-education and teleworking in Kenya. At the same time, this has deepened the inequalities² between those who have access to digital services and products and those who do not. The pandemic has caused severe education losses for children in Kenya where, on average, only 70% of children engaged in any learning/education activities since school closures (% of households with school-age children who attended school before the pandemic). Those that had access to the Internet and e-learning were able to mitigate this impact, further justifying the need to expand the sector for the benefit of the population living in the most vulnerable situations. The TVET sector was also hit particularly strongly due to the lack of infrastructure required for its resilience."}, {"bbox": [85, 1194, 1144, 1365], "category": "Text", "text": "The TEI on Human-Centred Digitalisation supported through this Action under the AAP 2022 will reinforce the EU's relation with Kenya. Sustainable development and poverty reduction along with EU interests will benefit from a coordinated 'Team Europe approach' involving a larger critical mass, focusing EU and EU Member States' (MS) support to achieve greater results. The EU will also seek for additional private investments through support of guarantees from the European Fund for Sustainable Development Plus (EFSD+) towards which EUR 61 000 000 have been allocated for Kenya. The EFSD+ digitalisation window will hopefully complement this Action."}, {"bbox": [85, 1384, 1144, 1468], "category": "Text", "text": "Overall, the country adheres to EU fundamental values, although shortcomings remain (e.g. corruption, human rights, political instability). The general elections in 2022 is a main risk and may influence the implementation. This will be mitigated by adapting programming and contracting timeframes."}, {"bbox": [85, 1554, 1140, 1647], "category": "Footnote", "text": "² Studies indicate that the majority of children in East Africa had very limited access to e-education and alarmingly did not learn at all during the initial phase of the pandemic (Save the children study https://resourcecentre.savethechildren.net/pdf/the_hidden_impact_of_covid-19_on_child_education.pdf/ Children with disabilities and other groups of marginalised children faced additional challenges studying from home, and access to technology, accessible technology was one important barriers)."}, {"bbox": [1038, 1681, 1143, 1705], "category": "Page-footer", "text": "Page 6 of 31"}]