SME E-access and E-usage Index Survey Print E-mail
Written by Christoph Stork   
Monday, 20 February 2006
RIA!The Research ICT Africa! network (RIA), a WDR partner, is currently carrying out surveys in 14 African countries on how small and medium sized businesses (SMEs) use information and communication technologies (ICTs). Preliminary conclusions indicate that ICTs can assist informal businesses to become formal and establish a more sustainable basis for income generation.

The survey is complete for Botswana, Cameroon, Ethiopia, Ghana, Kenya, Mozambique, Namibia, Nigeria, Rwanda, Tanzania, Uganda, and Zimbabwe; and will soon be completed for South African and Zambia.

The surveys are conducted to establish a SME E-access and E-usage Index that aims at understanding the impact of ICTs on private sector development. Of particular interest is to understand how ICTs can contribute to a vibrant SME sector and economic growth in the context of developing economies.

Preliminary analysis shows that the negative impact of ICTs on labour productivity reported in the literature as well as the lack of significant impact on company performance can be attributed to the failure to distinguish between the formal and informal sector.

The data clearly demonstrates that ICTs are input factors for both formal and informal SMEs with a positive correlation to profitability.
 
Informal businesses have a higher profitability in terms of fixed assets employed than semi-formal ones, which in turn have a higher profitability than formal businesses. This is understandable, given that increasing formality encumbers a business, ensuring that it must follow certain laws in its operation.

Table 1: Main obstacles to ICT usage stated by SMEs from 8 of the sampled countries

 

informal

semi formal

formal

Total

High costs, too expensive

56.25%

61.39%

52.80%

56.77%

Lack of awareness & knowledge regarding ICTs

15.10%

10.23%

9.58%

11.27%

Lack of financial resources to purchase ICTs

13.54%

6.56%

5.24%

7.90%

Network Problems / Unreliable Infrastructure

5.21%

6.76%

7.96%

6.80%

Lack of skills & ICT illiteracy

2.08%

5.60%

5.42%

4.60%

The biggest obstacle to wider ICT usage was given as the high costs of ICTs. This points clearly to the necessity to implement regulatory and policy changes with the aim of reducing the cost of ICTs in order to foster economic growth and employment.

ICTs can assist informal businesses to become formal and establish a more sustainable basis for income generation.

RIA!For further information, go to www.researchictafrica.net