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Despite Desires for Digital Tech, Adoption Faces Challenges in Africa

A new report from Vodacom Group, Vodafone Group and Safaricom has revealed that SMEs in Africa are embracing the positive impact of technology. In fact, 70 per cent of firms in the region have invested in tech to boost growth and resilience. 

The report titled Levelling the SME Playing Field, is the sixth research paper under the Africa.connected campaign. The purpose of the campaign is to drive sustainable development by closing the digital divide in Africa’s key economic sectors. This is specifically done through strategic partnerships.

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.

Shameel Joosub, Vodacom Group CEO
Shameel Joosub, CEO, Vodacom Group

“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,” says Shameel Joosub, Vodacom Group CEO.

Hurdles for mainstream adoption remain

The adoption of technology by Africa’s SMEs presents unique challenges. Going beyond inadequate infrastructure and access to connectivity, the findings reveal the greatest difficulty for SMEs is the high cost of technology upgrades and renewals (58.3 per cent). This can prevent small businesses from keeping up with the latest technological advancements.

Almost a third of SMEs (32 per cent) are also concerned about a lack of digital skills and knowledge to take full advantage of technology solutions. In addition, the research points to regulatory and compliance issues as stumbling blocks in SMEs’ efforts to digitalise.

The research is based on conversations with 400 SMEs across eight African countries (South Africa, Kenya, Egypt, Ethiopia, Mozambique, Tanzania, the Democratic Republic of the Congo and Lesotho), ranging in size from one to 200 employees. These surveys were run in partnership with World Wide Worx, a South African market research business that focuses on trends in information technology and telecommunication.

In Africa, digitalisation has been a game-changer for SMEs, with the respondents highlighting the positive effect of technology on enhancing growth, efficiency, competitiveness and customer service. Furthermore, by using e-commerce platforms, social media, and digital payment solutions, such as M-Pesa, SMEs can expand their reach, access valuable data insights, and streamline operations.

Unlocking the key to digital growth

To help drive technology adoption among the continent’s SMEs, the report outlines the importance of sharing best practices, to enable better decision-making and cost-effectiveness. From a knowledge-sharing perspective, these standards foster a learning culture by helping to identify gaps in understanding and making it easier to implement innovative ideas, while also providing an internal knowledge base and reducing the loss of know-how.

Furthermore, adopting proven practices and technologies is faster and safer than testing new ones.

“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,” says Joosub.

“We at Vodacom are keen to partner with small businesses and support them on their journey to success. As a purpose-driven business, our goal is to utilise our networks and our technical capabilities to help SMEs innovate so that together we can create a more resilient, inclusive, and sustainable future for Africa.”

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