Entrepreneurship is a key component of economic growth in many countries. In addition to promoting innovation, research and industrial development, entrepreneurship also expands and improves existing businesses.
Fostering entrepreneurial ecosystems helps support economic growth by fostering entrepreneurial activities and processes that ultimately support small business growth.
Small and medium-sized enterprises (SMEs) make up a large proportion of African businesses and form the basis of almost all economies due to their importance in creating new jobs and providing specialized services.
Data from PwC shows that Nigerian SMEs contribute 48 percent of national gross domestic product, 96 percent of businesses and 84 percent of employment.
However, the World Bank’s economic forecast for growth in Africa is expected to falter in 2022, falling from four percent to 3.6 percent. Therefore, to maintain growth and sustainability in a market faced with different economic and political challenges, SMEs need to innovate. In other words, innovation is crucial for the long-term viability and internationalization of SMEs.
E-commerce has grown rapidly in recent years; it has helped small businesses in Africa to expand. According to Statista, online shopping revenue in Africa was estimated at around US$27.8 billion in 2020, an increase of over US$6 billion since 2019.
The report also indicates that e-commerce revenue in Africa will continue to grow between 2021 and 2025, and the e-commerce sector in Africa could be worth over US$46.1 billion. One reason for this growth can be attributed to the high usage of mobile phones; This level of mobile penetration has, in turn, fueled the advent of electronic payments, mobile banking, and mobile money accounts. Africa is said to have the highest proportion of people with a mobile money account.
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Small businesses are beginning to harness the power of technology and the internet to access new customer bases and expand into new markets. Sub-Saharan Africa, for example, has some of the most promising and largest markets that offer the greatest opportunities for small business and e-commerce: Nigeria, Ghana, Kenya, Uganda, Tanzania and Ethiopia.
Because African consumers simply want the same things as their international counterparts – convenience, great service, easy payment processes and quality products at reasonable prices. Although there are still many concerns and uncertainties about the trustworthiness of goods quality, payment systems (interoperability) and transaction security, this has not hindered the adoption of e-commerce. Another reason for this growth can be attributed to continued innovation in solving some of the payment challenges faced by small businesses in Africa.
Choosing the right and suitable business payment gateway is crucial and one of the solutions to most of the above challenges. This is because traders need to ensure that it works in their preferred markets and meets the latest encryption standard that protects both the trader and the customer. The introduction of a seamless e-payment solution will improve the customer experience in many ways: faster checkout, payment security and convenience.
With Unlimitt offering multiple payment methods accessible worldwide, businesses can successfully enter new markets by making it easier for their customers to transact in many different ways. By using Unlimitt’s payment platform, businesses can access tools and services that offer greater flexibility and efficiency.
It is vital that small business owners partner with fintech innovators and offer their businesses the opportunity for greater presence and expansion. E-commerce is a paradigm shift that is fundamentally changing traditional ways of doing business in Africa and is proving to be a useful tool for the digital future of the African economy.