ICT access and usage among informal businesses in Africa

Abstract

Purpose – The purpose of this paper is to analyse the extent to which informal businesses employ information and communication technologies (ICTs) in their daily activities and the challenges they face in making use of ICTs. Design/methodology/approach – The study uses nationally representative data for informal businesses in residential and semi-residential areas, as defined by national census sample frames for nine African countries. Findings – The results show that mobile phones remain the most commonly used ICT among informal businesses, while the use of other ICTs, such as fixed-line telephones, computers and the internet remains negligible. Businesses were found to communicate more with their suppliers than with their customers via mobile phone. The lack of use of the different kinds of ICTs was attributed to issues around need, affordability, availability and access. Research limitations/implications – The data are not representative of formal businesses. Practical implications – There is little money to be wasted on gadgetry in the informal sector and only technologies that add value (i.e. bring in money in the short term) will be used. There is the need to be concerned about creating a business environment that allows informal businesses that have the skills and ambition to grow and become formal and sustainable. ICTs, in particular the mobile phone and mobile internet, have the potential to facilitate this. ICTs may allow for a deepening of the distribution and procurement channels of businesses. Doing business over distance could become more affordable through the mobile phone and mobile money. Social implications – Policy makers have many choices in addressing affordability and access to ICTs in the informal sector, ranging from introducing competition and removing import duties on prepaid airtime, to supporting mobile application development for informal businesses in general. Originality/value – This paper uses primary data that allow a better understanding of informal businesses and their use of and access to ICTs. It adds to the literature on the informal sector in which Africa's poor find their livelihood and from which base the formal economy operates.