Nearly 70% of small and medium-sized enterprises (SMEs) in Africa have recognized the positive impact of technology on their growth and resilience, leading them to invest in technology solutions over the past 12 months. This significant adoption of technology indicates that SMEs in Africa are embracing digitalization and its potential benefits.
The recently launched report, titled ‘Levelling the SME Playing Field,’ jointly released by Vodacom Group, Vodafone Group, and Safaricom, highlights the opportunities that arise from harnessing the full potential of digitalization for SMEs in Africa. However, it also emphasizes the need to address barriers such as infrastructure limitations, connectivity issues, and the high cost of technology implementation. The report aims to develop best practice frameworks and foster better collaboration to support SMEs in leveraging technology effectively.
Shameel Joosub, CEO of Vodacom Group, states, “Our findings highlight the significant role that technology can play in helping small businesses tap into new opportunities, access finance, increase productivity, reduce costs, and enhance their competitiveness.”While the adoption of technology by Africa’s SMEs presents unique challenges, beyond inadequate infrastructure and limited connectivity, the report identifies the high cost of technology upgrades and renewals (58.3%) as the most significant difficulty faced by SMEs. This financial barrier can hinder small businesses from keeping pace with the latest technological advancements.
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Additionally, approximately one-third of SMEs (32%) express concerns about lacking digital skills and knowledge to fully capitalize on technology solutions. The report also highlights regulatory and compliance issues as stumbling blocks in SMEs’ digitalization efforts.
The research, conducted through conversations with 400 SMEs across eight African countries (South Africa, Kenya, Egypt, Ethiopia, Mozambique, Tanzania, the Democratic Republic of the Congo, and Lesotho), sheds light on the positive effects of technology adoption on SMEs’ growth, efficiency, competitiveness, and customer service.
Digitalization has proven to be a game-changer for SMEs in Africa. Through e-commerce platforms, social media, and digital payment solutions like M-Pesa, SMEs can expand their reach, access valuable data insights, and streamline their operations.To drive technology adoption among SMEs in Africa, the report emphasizes the importance of sharing best practices. By enabling better decision-making and cost-effectiveness, these standards foster a learning culture, identify knowledge gaps, facilitate the implementation of innovative ideas, and create internal knowledge bases. Adopting proven practices and technologies accelerates progress and reduces risks associated with testing new solutions.
Shameel Joosub adds, “Digital solutions and tools open possibilities for entrepreneurs and small business owners to connect and discuss best practices so that they can learn from each other’s experiences, mitigate common hurdles, and maximize their potential.”As a purpose-driven business, Vodacom aims to partner with small businesses and provide support on their journey to success. By leveraging their networks and technical capabilities, Vodacom seeks to foster innovation, resilience, inclusivity, and sustainability for Africa’s SMEs.
The report serves as a valuable resource for policymakers, organizations, and stakeholders involved in supporting SMEs in Africa. By addressing barriers, sharing knowledge, and fostering collaboration, technology adoption can empower SMEs, fuel economic growth, and contribute to the continent’s sustainable development.
