ICT Usage and Its Impact on Profitability of SMEs in 13 African Countries

This article reports on a small and medium enterprise (SME) survey carried out by the ResearchICTAfrica (RIA) in 14 African countries. It argues that the nega- tive return on investment reported in the literature can be attributed to the failure to distinguish between the formal and informal sectors. This article demonstrates that informal SMEs have a higher proatability than formal ones. It further shows that ICTs are productive input factors and that their use in- creases labor productivity for informal as well as formal SMEs. The article fur- ther argues that there is still demand for axed-line phones among SMEs but that mobile phones have become the default communications tool because axed lines are either too expensive or not available. The primary policy recom- mendation arising out of this is that applications for SMEs need to be devel- oped using mobile phones