Analysis: Digitizing Africa’s Small and Midsize Businesses
Alaba International Market, the largest electronics market in Nigeria, is an age-old brick-and-mortar operation, home to more than 10,000 merchants with a $4 billion turnover yearly. These markets exist all over Africa — traders transact in huge volumes, selling everything from cattle to fabrics and electronics.
These non-digital, micro, small and medium enterprises (MSMEs) make up 90% of businesses on the continent. And they’re serving non-digital customers: Currently, less than half of the population in Africa uses the internet and only 24% shops online. “In Africa, our biggest competitor is cash. Around 95% of all transactions in Africa are in cash,” said Raghav Prasad, Mastercard’s division president in charge of sub-Saharan Africa.
There have been efforts to increase digitization all over Africa, both by private corporations and governments. For example, Microsoft recently announced a partnership with the government of Nigeria to accelerate the country’s digital economy by developing high-speed internet infrastructure and upskilling 5 million workers over the next three years.
Photo courtesy of Lagos Techie.