This article reports on a small and medium enterprise (SME) survey carried out by the ResearchICTAfrica (RIA) in 14 African countries. It argues that the negative return on investment reported in the literature can be attributed to the failure to distinguish between the formal and informal sectors. This article demonstrates that informal SMEs have a higher profitability than formal ones. It further shows that ICTs are productive input factors and that their use increases labor productivity for informal as well as formal SMEs. The article further argues that there is still demand for fixed-line phones among SMEs but that mobile phones have become the default communications tool because fixed lines are either too expensive or not available. The primary policy recommendation arising out of this is that applications for SMEs need to be developed using mobile phones. (c) 2007 by The Massachusetts Institute of Technology.
1In a paper written by Alison Gillwald (Gillwald, 2005), she argues that South Africa's policy intentions of affordability and accelerated sector development were nullified by implementation plans that emphasised the maximisation of state assets through the protection of the vertically integrated incumbent, first for the privatisation and subsequently for the IPO, at the expense of competition.
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