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Digitisation a game changer for Africa's SME sector, says a new study

By , ITWeb
Africa , 28 Mar 2024
Shameel Joosub, Vodacom Group CEO.
Shameel Joosub, Vodacom Group CEO.

A new study says digitisation has been a game changer for African small and medium-sized firms (SMEs), with nearly 70% of them investing in technology in the past 12 months to assist improve growth.

These are the conclusions of a new report titled ''Levelling the SME Playing Field'', which was jointly launched yesterday by Vodacom Group, Vodafone Group and Safaricom.

The report is the sixth research paper in the Africa.connected campaign, which seeks to drive long-term development by bridging the digital divide in Africa's core economic sectors through strategic collaborations.

The study draws on interviews with 400 SMEs in eight African nations (South Africa, Kenya, Egypt, Ethiopia, Mozambique, Tanzania, the Democratic Republic of the Congo, and Lesotho), ranging in size from one to 200 employees.

These interviews were carried out in collaboration with World Wide Worx, a South African market research firm that specialises in information technology and telecommunications.

According to the survey, SMEs' greater adoption of technology indicates that they recognise technology's positive influence.

“There are numerous opportunities that unlock the full potential of digitalisation for these businesses and the continent, which means addressing barriers, such as infrastructure, connectivity, and the high cost of implementing technology, and developing best practice frameworks for better collaboration,” the report reads.

Nonetheless, the survey states that African SMEs have distinct hurdles when it comes to technology adoption.

It states that, in addition to poor infrastructure and access to connectivity, the data suggest that the most difficult challenge for SMEs is the high cost of technology upgrades and renewals (58.3%), which can prohibit small enterprises from staying current with technological improvements.

Furthermore, nearly one-third of SMEs (32%) are concerned about a lack of digital skills and knowledge to fully utilise technology solutions.

Also, the research identifies regulatory and compliance difficulties as stumbling hurdles in SMEs' efforts to digitise.

To help encourage technology adoption among the continent's SMEs, the report emphasises the necessity of sharing best practices in order to improve decision-making and cost-effectiveness.

According to the report, these standards promote a learning culture by assisting in the identification of knowledge gaps and making it simpler to execute creative ideas, as well as providing an internal knowledge base and preventing know-how loss.

Furthermore, it says implementing proven processes and technology is faster and safer than testing new ones.

Shameel Joosub, Vodacom Group CEO, comments: "This report explores the specific challenges SMEs face in Africa and unpacks what needs to be done to help these entrepreneurs overcome these obstacles. 

"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."

He 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 maximise their potential.”

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