Digital divides among microsized firms: Evidence from Sub-Saharan Africa

This paper explores digital inequalities in access and usage among 3,300 firms and entrepreneurs from eight sub-Saharan African countries. To account for informal firms’ heterogeneity, we identify three segments: an upper tier of top performers, a lower tier of survivalists, and an intermediate segment composed of constrained gazelles. Although digital technologies are already used by most of the informal entrepreneurs in Sub-Saharan Africa, our findings suggest that the diffusion of these new technologies is uneven across informal firms, digital inequalities being rooted in the already existing socioeconomic inequalities. Indeed, digital inequalities align with the hierarchy of informal sectors in each country and are associated with entrepreneurs’ and firms’ characteristics. Using multivariate analysis, we find that gender and rural/urban digital divides persist in the productive sphere. At the same time, firms with a high level of informality, low profits, precarious operating conditions, and no access to financial services are less likely to use digital technologies.