Differential impact of ICT on MSMEs' productivity in Africa’s emerging market

The observed low level of information and communication technology (ICT) usage among micro, small, and medium-sized enterprise (MSME) firms in many African countries may serve as a major constraint to their productivity. The productivity of service and manufacturing firms is impacted differently due to this low uptake of ICT. This paper seeks to examine the differential effects of ICT on MSMEs’ productivity in emerging African economies, specifically Egypt and Nigeria. This study evaluates the effects of ICT on MSMEs’ productivity across different sectors (services and manufacturing), by size and aggregated. The estimated results support the positive impact of MSMEs’ website presence and use of email on their productivity, though the magnitude varies across different analyses and sectors. This appears to support the differential sectoral impacts of ICT on MSMEs’ productivity across countries in emerging markets. Specifically, this study finds evidence for a higher impact of firms’ website presence on productivity in the manufacturing sector than the services sector across emerging economies. The study, therefore, recommends that emerging markets economies that want to implement appropriate national technology policies to enhance their firms’ productivity should always consider their differential effects on various sectors, as universal ICT policies may not achieve the desired objectives.