Research ICT Africa! (RIA!) has published a new chapter in their e-Index research. At the end of 2006 the report Towards an African e-Index: SME e-Access and Usage Across 14 African countries was published. The SME e- Access and Usage survey was carried out across 14 African countries between the last quarter of 2005 and the first quarter of 2006.

The report explores the impact of ICT on private sector development, and how ICT can contribute to a vibrant SME sector and economic growth in the context of developing economies. The countries covered included Botswana, Cameroon, Ethiopia, Ghana, Kenya, Mozambique, Namibia, Nigeria, Rwanda, South Africa, Tanzania, Uganda, Zambia and Zimbabwe.

Research ICT Africa! (RIA!) network seeks to build an African knowledge base in support of ICT policy and regulatory design processes, and to monitor and review policy and regulatory developments on the continent. The establishment of the network originates from the growing demand for the data and analysis necessary for an appropriate but visionary policy required to catapult the continent into the information age. The reports to develop an African e-Index provide an answer to this demand.

The report that was presented in the last quarter of 2006, Towards an African e-Index: SME e-Access and Usage Across 14 African countries, explores the e-access and usage of ICT in the domain of the Small and Medium Sized Enterprises.

The SME sector has an important role to play in the present and future economic development, poverty reduction and employment creation in developing economies. The report notes that the SME sector is the sector in which most of the world's poor people  work. SME sector growth largely exceeds the average economic growth of national economies in many countries and contributes significantly to employment creation. At the same time, little is known about the impact of ICT on the SME-sector.

The literature to date has failed to create a tight link between the use of ICT and issues such as profitability and labour productivity. This survey aims to provide solid empirical evidence of the link between ICTs and business performance based on firm-level evidence. It is interesting that the survey also tries to include informal businesses, that form the core of the small businesses in Africa.

The report is structured as follows: the first chapter introduces the methodology that was used to achieve the objectives of the study, followed by two chapters providing a brief background of the SME sector and the ICT infrastructure in the 14 countries that participated in the survey. The fifth chapter focuses on ICT access and usage. Chapter Six looks at the impact that the usage of ICT has on the profitability and efficiency of SMEs. Chapter Seven summarises the main conclusions and policy recommendations arising from this analysis.

In 140 pages and some appendices, the report certainly provides new and interesting data on the use of ICT in the SME sector in the 14 countries that were surveyed in Africa (Botswana, Cameroon, Ethiopia, Ghana, Kenya, Mozambique, Namibia, Nigeria, Rwanda, South Africa, Tanzania, Uganda, Zambia and Zimbabwe). With regard to the impact of ICT the report draws the following main conclusions:

• ICTs are significant input factors for both formal and informal 
  SMEs and contribute positively to revenue generation;
• ICT possession and usage is clearly linked to higher labour 
  productivity;
• Mobile phones have overtaken fixed phones and computers as tools in supporting the running of SMEs, given their prevalence and accessibility;
• The main constraint to ICT usage remains high investment and/or usage costs.

In line with the last point, the report urges for the development of business applications based on the mobile platform. These provide relatively low-cost solutions with a potentially high penetration. Essential, however, is that a payment mechanism is developed. See also WDR's resource on this issue.

Regulation is considered to be the key issue to increase accessibility and affordability of ICT for the SME-sector. It is critical that governments accept that ICT costs can be reduced by establishing a regulatory environment that facilitates competition in the ICT sector.

Although the report provides a wealth of empirical data for policy makers to support informed decision making, its findings are biased towards Anglophone Africa in South East and Central Africa. The findings may not apply to the Francophone countries located mainly in West and North Africa. We wait eagerly for the next chapter of the African e-Index but we hope that it will also include main Francophone players like Senegal, Mali, Algeria or the DRC.

Related report: Gillwald, A. (Ed.), 2005. Towards and African e-Index: Household and Individual ICT Access and Usage in 10 African Countries.

This article has also been published at the website of the World Dialogue on Regulation (WDR) - www.regulateonline.org

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