Youth-Led MSMEs in Sub-Saharan Africa Battle Digital Maturity Crisis – Study

By Akanni Michael

A new multi-country study has found that youth-led micro, small, and medium enterprises (MSMEs) across Sub-Saharan Africa are operating at only a moderate level of digital maturity, putting them well below what researchers consider the expected standard.

The findings, presented at a recent stakeholder engagement held at the Arthur Mbanefo Digital Research Centre of the University of Lagos, paint a sobering picture of the region’s digital readiness, particularly within the health, energy, and sustainability sectors.

The research, led by Dr Imoleayo Foyeke Obigbemi of the University of Lagos in collaboration with academics from the University of Nairobi and the University of the Witwatersrand, was conducted under the auspices of the AFRETEC Network by Carnegie Mellon-Africa.

“It examined youth-led MSMEs in Nigeria, South Africa, and Kenya, countries chosen in part for their relatively developed financial markets.”

Maturity below expectations

Dr Obigbemi, presenting the findings to an audience of academics, policymakers, accountants, students, and government officials, said the research revealed that digital maturity levels were “relatively lower” within the health, sustainability, and energy sectors.

“Overall, the level of digital transformation and maturity across Sub-Saharan Africa remains below expectations,” she noted, describing the stakeholder engagement as a deliberate convergence of different professional perspectives toward advancing a shared objective.

The event was organised under the theme “Digital Transformation and Maturity of MSMEs in Sub-Saharan Africa,” with the University of Lagos Vice Chancellor, Prof. Folashade Ogunsola, serving as Chief Host.

Small businesses as the engine of African growth

The keynote address was delivered by Prof. Chinonye Love Moses, Professor of Entrepreneurship at Covenant University and Imo State’s Commissioner for Entrepreneurship and Skill Acquisition, who set the context for the findings by underscoring the outsized role that MSMEs play in Africa’s economy.

“MSMEs account for over 80% of African businesses and contribute approximately 50% of the continent’s GDP,” she said, while stressing that persistent barriers, including limited access to capital, markets, and technology, continue to hold back youth-led enterprises in particular.

Prof. Moses identified four digital leverages she said could transform the fortunes of small businesses: media leverage through strategic social media use; and operational leverage through tools such as accounting systems and customer relationship management software; financial leverage through fintech platforms and grants; and knowledge leverage through the abundance of free and affordable digital learning resources.

She argued that through these tools, a single entrepreneur could operate at a scale once reserved for larger companies.

She urged researchers to narrow the digital maturity gap, called on government to establish innovation hubs, and encouraged young people to acquire skills and create jobs — reiterating throughout that “Nigeria’s greatest asset lies in its people rather than its natural resources.”

Formality, value creation, and the limits of social media

A five-member panel discussion that followed drew out several tensions at the heart of digital transformation for small businesses.

Dr Ayodotun Ibidunni of James Hope University drew an important conceptual distinction, explaining that digitisation which connotes converting analogue processes to digital formats differs from digitalisation, which refers to using technology such as smartphones to improve business operations.

The Panelists

He warned that Nigeria’s low digital maturity is directly linked to deeper economic challenges, including persistent poverty.

Dr Akinyemi Ajibola of Bells University challenged a common misconception among young entrepreneurs: “Many equate mere social media presence with digitalisation”, describing this as a narrow interpretation that overlooks the deeper integration of technology into business processes.

Dr Collins Sanskay Oboh of UNILAG extended the critique, arguing that much digital content today “lacks substantive value, often prioritising fleeting entertainment over meaningful contributions to society and the economy.”

He was firm that MSMEs must prioritise value creation over purely profit-driven ventures, and cautioned that wealth derived from low-value digital content contributes to social decline.

On the question of taxation, which was recognised as a major concern among small business owners, Mr Olusesan Samuel Okunade, a taxation and power sector professional, sought to dispel widespread anxiety.

He explained that businesses with an annual turnover below N100 million are exempt from tax liability under the current Nigerian framework.

“Improved documentation of both business and individual financial activities is essential for transparency,” he said, warning that non-compliance could result in penalties.

On his part, Dr Oluwasogo Adediran of Covenant University stressed the importance of mentorship and empathy in working with young entrepreneurs, while also affirming that taxation is a global norm and that Nigeria’s rates are comparatively low.

He urged citizens to demand accountability from government rather than resist the tax system.

Closing the event, Dr Obigbemi stressed that for Sub-Saharan Africa’s youngest generation to fully realise its economic potential, the gap between digital access and digital maturity must be urgently and deliberately closed.