Throughout sub-Saharan Africa, a quiet revolution is underway. Equipped with smartphones and empowered by broadband connectivity, millions of micro-entrepreneurs are changing the way goods and services are produced and sold in local economies. This is not just a technological trend, but a paradigm shift in the economic fabric of the region, which boasts the highest rates of entrepreneurship in the world, with over 22% of working-age Africans starting new ventures. These agile businesses, rooted in socio-economic adaptation and innovation, are increasingly driven by digital tools that enable mobile payments, online marketplaces and real-time customer engagement. Mobile Internet penetration in Africa has tripled over the past decade, now reaching more than 527 million subscribers. Smartphone adoption is projected to reach 88% by 2030 and with more users accessing the web through mobile devices, digital platforms are increasingly becoming the backbone of economic inclusion. But what factors drive this digital adoption by micro-entrepreneurs? And how does it shape productivity, growth and policy design? Understanding these forces is not just an academic exercise. This is essential to craft public economic policies and private sector-led growth-enhancing measures that unlock inclusive, strong and sustainable growth across Africa.
Key examples: Digital adoption in agri-food systems
Digital technologies are reshaping microentrepreneurship in Africa’s agri-food systems, especially in informal markets where traditional infrastructure is limited. As mobile broadband expands and smartphone penetration deepens, digital platforms are emerging as critical tools for trade, while African trade is accelerating their pace of growth. This mutually reinforcing cycle leads to job creation and financial inclusion, thereby bridging the formal-informal divide and boosting productivity and output growth. This change is particularly evident in agricultural value chains, where small-scale intermediaries, often women, play a key role in linking producers to consumers.
A recent study we conducted in Benin sheds light on these dynamics. In a country where cereals and legumes account for 90% of food consumption, food mediation remains a predominantly women-led subsistence activity. Using data from two semi-rural markets in the country, Bohicon and Oando, our research shows that 80% of food traders are women, 60% manage teams of six or more workers, and 90% have more than a decade of trading experience. This underlines the maturity and economic importance of these informal micro-enterprises. Although the majority of these micro-entrepreneurs (52%) have no formal education, the sector is rapidly adopting digitalisation, with mobile broadband penetration increasing from 2% to 42% in just ten years.
Nearly half (49%) of the microentrepreneurs surveyed have adopted digital technologies to trade their products, reshaping the operations of these informal businesses. These adopters are more educated than their peers, make larger and more frequent transactions, and are embedded in digitally active networks, suggesting that proximity to other users strengthens adoption through network effects. Yet the promise of digital technology adoption comes with notable barriers: 54% of adopters surveyed face connection costs that are 20% or more of the national minimum monthly wage, while 45% blame poor internet quality as a major barrier to efficient business operations. These conflicts highlight the need for tailored infrastructure and affordability solutions to ensure that digital transformation among Africa’s microentrepreneurs reaches its full potential. Our analysis shows that digital adoption increases productivity: adopters outperform their peers on a range of productivity measures. They also report a 50% increase in both trading frequency and volume, demonstrating that digital tools are not just modern conveniences, but powerful catalysts to scale up informal enterprises and unlock hidden economic potential.
This regional case, among others, shows how digital adoption among micro-entrepreneurs is not only accelerating, but also redefining the contours of economic participation, especially for women in informal agro-food systems. It also underlines the catalytic role of digitalization in improving food security.
inclusive digital adoption Goes beyond infrastructure expansion
The adoption of digital technologies among microentrepreneurs is not random. This reflects deeper patterns of socio-economic access and network exposure. Our study shows that younger, wealthier and more educated individuals are significantly more likely to integrate digital tools into their business practices. Proximity to other digital users also reinforces adoption, suggesting that peer influence and community-level networks play an important role in shaping tech-savvy and digital behavior.
These findings have important implications for digital inclusion strategies across Africa. First, they emphasize the need to address structural inequalities in education and income that impede digital opportunities. Without well-calibrated and targeted interventions, digital transformation may exacerbate the existing divide between more advantaged entrepreneurs and those left behind in low-resource settings.
Second, the power of network effects points to the value of localized digital ecosystems. Policies supporting digital hubs, peer learning and community-based training can increase adoption by leveraging social proximity and trust. In addition to focusing specifically on individual capacity-building, policymakers might consider how to productively activate collective digital readiness, especially in a continent historically known for high levels of communitarianism.
Finally, our finding that the variables of gender, experience, or formal occupational affiliation do not have a significant impact on the level of digital adoption suggests that the traditional divide may miss key levers of digital transformation in the African context. It appears that digital adoption is less about identity or tenure and more about reach, performance and perceived usefulness. This requires flexible, customized and context-sensitive approaches that prioritize connectivity, affordability and relevance over rigid gender or social network targeting.
In short, promoting inclusive digital adoption requires more than expanding digital infrastructure. This requires a nuanced understanding of who adopts, why and under what circumstances. Digital adoption in Benin’s agri-food systems provides valuable insights for designing more effective and equitable digital policies across the continent.
Policy pathways to accelerate digital adoption among micro entrepreneurs
Unlocking the full potential of digital technologies for microentrepreneurs in Africa requires a multi-pronged policy approach that addresses both infrastructure and financial constraints. Evidence from our Benin study underlines the importance of well-conceived and targeted interventions to enhance digital uptake and economic performance among microentrepreneurs, particularly in informal markets.
First, Improving mobile broadband quality Emerges as a high impact lever. Our structural model simulations show that upgrading Internet reliability and speed provides the most significant benefits in both adoption rates and productivity. The findings point to the need for sustained and cost-effective investment in digital infrastructure, especially in semi-rural and underserved areas, where poor connectivity continues to hinder business operations.
Second, Although reducing the cost of mobile broadband access has a positive impact, the impact is more modest when the quality of broadband connections remains low. This shows Affordability policies should be linked with service quality improvement To be completely effective. Governments and telecom providers can explore tiered pricing models, public-private partnerships or intra-platform competition to reduce entry barriers without compromising service standards.
Third, reducing credit constraints is necessary To enable micro entrepreneurs to invest in digital tools and scale up their operations. Many informal micro-enterprises do not have access to formal finance, limiting their ability to purchase smartphones, pay for data plans, or adopt digital platforms that increase productivity. Expanding access to microfinance, mobile money, and alternative credit scoring mechanisms, particularly those leveraging transaction and utility data, can help bridge this gap.
Together, these findings highlight the need for integrated digital inclusion strategies that combine infrastructure upgrades, affordability measures and financial empowerment. By connecting these efforts with the lived realities of micro-entrepreneurs, many of whom are women working in mature but underserved sectors, policymakers can foster a more inclusive and resilient digital economy, and in turn, increase productivity, output, employment and livelihoods across Africa.