Change and the things we take for granted

The fax combined a photocopier with a telephone, so that when you scanned a document on one end, it printed at the recipient’s end. The older folk will have listened to the only broadcaster, the Voice of Kenya (VoK). And I remember when public bus transport was scheduled, as it is today for trains and planes.

Speaking of trains, I rode the SGR to and from Mombasa last week. A wonderful ride. We had a great time catching up with family friends. But it is the state of technology that got me thinking. I needed to take a work-related conference call.

A video call while travelling at 100 kilometres per hour was quite impressive, both to me and my colleagues who were on the call.

I compared it to an earlier time. A primary school classmate wrote me a letter while I was at Uni. It was his only option in those days. Because it came by land and sea, it took about six months to reach me in Nova Scotia!

While writing this article, I pause to pay fees for the semester for my son who is now at Uni. No physical visit to the bank. Instead, I simply got to their internet banking service. I send the money via the Society for Worldwide Interbank Financial Telecommunications (Swift).

Just a few years ago, making such a payment took several steps. The sender went to a bank branch. They filled forms, which then had to go to the bank headquarters the following day. And until recently, you had to make the order before 11am for it to be transmitted the same day!

Today in most international flights, you can now connect to the internet, send emails, make calls, use social media and so on.

All these are changes that have taken place within one generation. Further, often (but not always) when a technology appears in one country, it soon spreads to others. So while change was perhaps slow a few decades ago, today it is taking place at the speed of thought. Indeed, perhaps faster than the speed of thought!

Let us consider the nature of change. The economy is changes in many ways – through growth, structure, and policy. Change is often driven by technology, policy reforms and resource booms.

When Kenya grew at 22.2 and 17.1 percent in 1971, and in 1972 respectively, it was the result of the coffee boom. Frost had all destroyed most of Brazil’s coffee, causing a global shortage. The eight percent growth achieved in both 1968 and 1969 was driven by import substitution and the newly formed EAC.

Both drove high growth in manufacturing, which averaged eight-nine percent growth.

More recently, the 8.4 percent growth in 2010 was driven in part by the positive sentiment (high business and consumer confidence), generated by the broad consensus which led to a new Constitution.

In 2021, the economic stimulus after the covid-19 shut-down generated 7.59 percent growth. A rebound in agriculture and services, and the construction of the SGR drove 6.3 percent growth in 2018.

Consider the velocity of mobile money. Safaricom is moving about Sh4.2 trillion per month. That is a little over Sh50 trillion per year, about 2.84 times the 2025 gross domestic product (Sh17.68 trillion).

Velocity has been estimated at four times per month. This is a fundamental and structural shift in the way the economy works. It has increased financial deepening and economic multiplier, reduced transaction costs and resulted in faster transaction cycles.

The structure of the economy changed quite quickly in the early 2000s. The information, communication and technology (ICT) sector emerged as a key sector by 2008. The infrastructure led growth hand boom in construction created demand for building materials.

The share of both agriculture and manufacturing in annual GDP declined. And manufacturing itself changed from fast-moving consumer goods factories, to steel and cement. A dozen new factories of the latter kind have emerged in the last fifteen years.

Ndiritu Muriithi is an economist and partner at Ecocapp Capital.  He is also the chairman of KRA and former governor of Laikipia County. Email: [email protected]