Social media adoption helping African SMEs spurring economic growth
A STUDY commissioned by Facebook Inc and conducted by Genesis Analytics in eight African countries — Senegal, Côte d’Ivoire, the Democratic Republic of Congo, South Africa, Nigeria, Ghana, Mauritius, and Kenya — reveals that social media platforms are helping to accelerate economic growth and opportunity across the continent.
The African continent is heavily reliant on its small and mediumsized enterprises (SMEs), which are the backbone of the economy. As many countries across the continent have embarked on their digital transformation, the research shows that digital platforms can play a key role in the continent’s development.
According to the results of the study, SMEs are an ever-more important vehicle to achieve youth employment, gender parity and intra-regional trade in Africa. The report surveyed SMEs in the continent and the data showed that companies that use Facebook apps (Facebook, WhatsApp, Instagram and Facebook Messenger) have younger employees with an average share of 45% of employees under 30.
Additionally, SMEs using Facebook apps reported a higher frequency of being owned by women, while SMEs in the manufacturing sector ranked the ability to access new foreign markets as the most beneficial advantage to obtain out of those apps.
This way, social media and digital tools can be a catalyst for realising Africa’s three latent opportunities:
• Leveraging Africa’s competitive advantage of an extremely young population;
• Bringing more women into formal economic activity; and
• Diversifying and expanding intra-African trade.
Eighty-four percent of surveyed SMEs reported that Facebook apps have been important for their business growth.
This reinforces the commitment to providing the access and skills that help people use Facebook apps to increase employment opportunities, incomes, gender equity, and trade.
The Genesis Analytics study shines a much-needed light on how small and medium-sized businesses (SMBs) on the continent are embracing digital tools and platforms. It shows empirically that the use of digital tools can drive economic growth by bringing more women into the formal economy; creating economic opportunity for young people; and boosting intra-African trade.
Policymakers and digital platforms alike should understand these opportunities and create an optimal environment for SMBs to thrive using digital tools and social media.
The report also identified the barriers that policymakers may need to further focus on to increase the adoption and drive significant growth, with expensive internet and data costs and low levels of trust in data privacy being barriers to greater uptake.
Resolving these challenges will take close cooperation between governments and private companies to foster a digital environment that can power small businesses to unlock Africa’s rich opportunities.