International Finance Corporation (IFC) analyzed data from a survey of 3,325 small and medium-scale enterprises (SMEs) in seven countries in Africa reported that businesses that adopted tech for their operation, reported six times higher sales levels, increased rate of productivity, and 1.9 times the number of employees than non-users.
The survey which was conducted in Kenya, Mozambique, Nigeria, Senegal, South Africa and Tanzania revealed that less than seven percent of micro-enterprises disclosed that they used digital technologies for their business. 71 percent of respondents reported that there was no need for the use of technology while 35 percent disclosed that using technology for the operation of their businesses was quite expensive for them.
While 34 percent revealed that they did not have the technological know-how of these technologies, 20 percent revealed that lack of access to high-speed Internet was a reason for not adopting tech in their business.
As the world grapples with supply chain disruptions and stifled economic growth following the aftermath of the covid-19 pandemic, the adoption of technology by businesses in Africa has never been more prominent compared to other continents.
Despite the ongoing digital revolution that is transforming economies and driving innovation across all economic sectors, the African continent has continued to play catch-up with the rest of the world. Analysts suggest that for a wide range of SMEs in Africa to adopt technology for their businesses, the people need to be empowered with the necessary digital competencies.
While the formal business sector in Africa is dominated by Small and medium-scale enterprises (SMEs), the adoption and leveraging of technology in business is of great importance and can play an important role in accelerating the continent’s industrialization and economy.
Digital technology has no doubt created new opportunities for businesses across the globe, however, Investors King understands that businesses in Africa are yet to enjoy the full benefits of technology because of a difficult environment.