In Africa, the SME sector is a key driver of economic growth. There are over 50 million SMEs in Sub-Saharan Africa and they are the key drivers of new employment. For example, it is estimated that there are over 2.3 million SMEs operating in Kenya and these generated approximately 90% of the new jobs created in the past year. Similarly, there are over 2.2 million SMEs in Ethiopia which, collectively, employ over 50% of the country’s workforce. The data for other African markets (Tanzania, Uganda, Rwanda,Ghana) is comparable to Kenya and Ethiopia. Accelerating the growth of the SME sector is a key priority for many economies in the region with numerous initiatives being implemented to facilitate access to markets, capital and promote entrepreneurship. It is estimated that less than 10% of ... Read more

In Africa, the SME sector is a key driver of economic growth. There are over 50 million SMEs in Sub-Saharan Africa and they are the key drivers of new employment. For example, it is estimated that there are over 2.3 million SMEs operating in Kenya and these generated approximately 90% of the new jobs created in the past year. Similarly, there are over 2.2 million SMEs in Ethiopia which, collectively, employ over 50% of the country’s workforce. The data for other African markets (Tanzania, Uganda, Rwanda,Ghana) is comparable to Kenya and Ethiopia. Accelerating the growth of the SME sector is a key priority for many economies in the region with numerous initiatives being implemented to facilitate access to markets, capital and promote entrepreneurship. It is estimated that less than 10% of businesses in Africa (with a specific focus on Kenya, Ethiopia, Uganda, Tanzania, Rwanda and Ghana), particularly SMEs have an existing online presence, compared with over 60% of SMEs in more developed markets. This puts African SMEs at a significant competitive disadvantage. This is particularly true when these SMEs try to access Export markets. Between 80-90% of buyers in developed markets will conduct some online research before making a purchase decision with a new supplier. The vast majority of Kenyan, Ethiopian, Ugandan, Tanzanian, Rwandan and Ghanian SMEs will not reach these buyers because they have no online presence.

The need for small business internet services in Africa has increased significantly as a result of improved internet penetration on the continent. However, digital services for the SME market are severely underprovided for in sub-Saharan Africa. Fortunately, small business owners are migrating to using the internet, as mobile consumers themselves, and are increasingly realizing the importance of providing an online presence for their businesses in attracting and growing their customer base. Anecdotally, COVID-19 related mobility restrictions have accelerated this trend over the past 4 months as consumers and businesses in many African countries are learning to rely on the internet to purchase and deliver services. This confirms the need for accessible high-quality, dynamic services designed specifically for African small businesses to accelerate their digital transformation.

Market Research conducted in Kampala, Uganda (Explore Consulting Research, 2016) revealed 3 key barriers preventing Business owners from adopting a digital presence:

• Awareness – limited knowledge of the advantages of leveraging digital platforms to reach potential local and international customers
• Expertise – limited/no expertise in how to leverage these platforms (Google, Facebook) for business purposes
• Cost - the market for digital services is fragmented and mostly serviced by freelancers and digital agencies who overprice their services due to limited competition.

The Digital Launchpad for African SMEs project is designed to create a winning framework to tackle these 3 barriers for 3000 pilot SMEs and establish a solid digital platform for their accelerated growth. The Launchpad builds on knowledge from previous digital transformation projects confirming the positive impact of providing a digital presence for SMEs in Africa