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Trends in ICT usage by small and medium scale enterprises in Ghana

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ICT, therefore, has a critical role to play as an enabler of socio-economic development, as well as providing a pivotal support for effective governance of the political system. It also plays an important role to enterprise de-velopment. The contributions of ICTs to business devel-opment have been pervasive to the extent that it is be-coming increasingly difficult for companies to compete effectively in the world market without adequate ICT infrastructures. The reason is that ICTs are revolutionis-ing every activity in the global market, as the various components of ICTs have their significant roles in facili-tating business promotion, efficiency and growth. The Internet, for example, has provided the platform for the development of electronic commerce (e-commerce) and offers potential for establishing low cost, open and 'many to many' trading systems (Humphrey et al, 2003). According to Labbè (2006) the Internet has become the global channel of unmatched scope for communication between people and between businesses, and at the moment, with over 80 million websites and over a billion internet users. Therefore, this provides an important medium for increased competition among businesses. Again business processes such as ordering, transaction, delivery, inventory control and accounting can be streamlined and connected regardless of location through the use of network of computers (UNCTAD, 2005). The same UNCTAD report argues further that the Internet has the potential of improving customer-management relationship and enable firms to customize their services to meet the needs of their different cli-ents. The customized service, according to the UNCTAD report will allow companies to respond to their custom-ers in real time and thereby improving customer confi-dence. It also helps in monitoring customers prefer-ences and lead to developing targeted marketing strate-gies. Invariably, the computer-mediated networks will allow these activities to be carried out quickly and effi-ciently, and contribute to efficiency in the operations of businesses. Further, computers supported by various types of busi-ness software can enhance information and knowledge management within a firm and result in an evolvement of better business processes and performance (OECD, 2004). The use of e-mail system and the Internet can support business communication within the context of business to customers (B2C) or business to business (B2B). Invariably transaction costs may be reduced, re-sult in increased transaction speed and reliability. Abstract Information and communication technologies (ICTs) have assumed central position in the development agenda of most countries due to their critical roles in facilitating socio-economic development. Their contribu-tions to enterprise development have been recognised and international organisations have called on develop-ing countries including Ghana to develop policies that will integrate ICTs into enterprise development. Ghana has developed a national policy on ICTs which is trans-form Ghana into a middle income, information-rich, knowledge-based and technology driven economy and society. In Ghana SMEs dominate the industrial landscape and they exhibit great potential in accelerating economic development which will lead to wealth creating and pov-erty reduction. It is therefore important to examine how ICTs have been adopted and used by these enterprises in the country to facilitate their economic activities. This paper analyses of survey results on access and usage of ICT facilities and services by SMEs in the country. It is argued in this paper that the utilisation of ICT ser-vices is underpinned by commercial considerations such as cost of investment and the potential returns on busi-ness activities. However, one cannot discount the impor-tance of literacy in the use of knowledge-intensive ser-vice as internet, but commercial considerations are strong.
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Page 3
Trends in ICT Usage by Small and Medium Scale Enterprises in
Ghana
Godfred Frempong
Science and Technology Policy Research Institute , Ghana,
Email: gkfrempong@stepri.csir.org.gh
ICT, therefore, has a critical role to play as an enabler of
socio- economic development, as well as providing a
pivotal support for effective governance of the political
system. It also plays an important role to enterprise de-
velopment. The contributions of ICTs to business devel-
opment have been pervasive to the extent that it is be-
coming increasingly difficult for companies to compete
effectively in the world market without adequate ICT
infrastructures. The reason is that ICTs are revolutionis-
ing every activity in the global market, as the various
components of ICTs have their significant roles in facili-
tating business promotion, efficiency and growth. The
Internet, for example, has provided the platform for the
development of electronic commerce (e-commerce) and
offers potential for establishing low cost, open and
‘many to many’ trading systems (Humphrey et al, 2003).
According to Labbè (2006) the Internet has become the
global channel of unmatched scope for communication
between people and between businesses, and at the
moment, with over 80 million websites and over a billion
internet users. Therefore, this provides an important
medium for increased competition among businesses.
Again business processes such as ordering, transaction,
delivery, inventory control and accounting can be
streamlined and connected regardless of location
through the use of network of computers (UNCTAD,
2005). The same UNCTAD report argues further that the
Internet has the potential of improving customer-
management relationship and enable firms to customize
their services to meet the needs of their different cli-
ents. The customized service, according to the UNCTAD
report will allow companies to respond to their custom-
ers in real time and thereby improving customer confi-
dence. It also helps in monitoring customers prefer-
ences and lead to developing targeted marketing strate-
gies. Invariably, the computer-mediated networks will
allow these activities to be carried out quickly and effi-
ciently, and contribute to efficiency in the operations of
businesses.
Further, computers supported by various types of busi-
ness software can enhance information and knowledge
management within a firm and result in an evolvement
of better business processes and performance (OECD,
2004). The use of e-mail system and the Internet can
support business communication within the context of
business to customers (B2C) or business to business
(B2B). Invariably transaction costs may be reduced, re-
sult in increased transaction speed and reliability.
Abstract
Information and communication technologies (ICTs)
have assumed central position in the development
agenda of most countries due to their critical roles in
facilitating socio-economic development. Their contribu-
tions to enterprise development have been recognised
and international organisations have called on develop-
ing countries including Ghana to develop policies that
will integrate ICTs into enterprise development. Ghana
has developed a national policy on ICTs which is trans-
form Ghana into a middle income, information-rich,
knowledge-based and technology driven economy and
society.
In Ghana SMEs dominate the industrial landscape and
they exhibit great potential in accelerating economic
development which will lead to wealth creating and pov-
erty reduction. It is therefore important to examine how
ICTs have been adopted and used by these enterprises
in the country to facilitate their economic activities. This
paper analyses of survey results on access and usage of
ICT facilities and services by SMEs in the country.
It is argued in this paper that the utilisation of ICT ser-
vices is underpinned by commercial considerations such
as cost of investment and the potential returns on busi-
ness activities. However, one cannot discount the impor-
tance of literacy in the use of knowledge-intensive ser-
vice as internet, but commercial considerations are
strong.
Key words: ICT, SME, development, enterprise
1 Introduction
In the past, most political and development planners
classified information and communication technology
(ICT) as a luxury service, and therefore, ICT did not fea-
ture prominently in the national strategies for socio-
economic development. However, in the contemporary
world, ICTs are increasing seen as key elements for de-
velopment. The contributions of ICTs to general eco-
nomic development are varied, but the key ones include:
Facilitating social change and economic activity
Improving quality of life
Bringing cost-benefits in rural social service delivery
Enabling political participation, promoting good govern-
ance and transparency (Panos, 2004).
ATDF Journal Volume 4, Issue 1
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ATDF Journal Volume 4, Issue 1
nesses but to the SMEs which form the greater percent-
age of enterprises in the country.
Further, the country has developed a national policy
which is specific to micro and small scale enterprises
(MSEs). The overarching objective of the policy is to cre-
ate conducive playing field for MSEs and to help the de-
velopment of a vibrant, productive and competitive MSEs
sector in the country (Ministry of Trade and Industry,
2002). Under the policy, the government among others is
to:
Promote dynamic enterprise culture for innovation
Promote employment growth within the informal
sector
Develop MSE to serve as a means to establish link-
ages between the formal and informal sectors of the
economy
Improve the technology base, product quality and
productivity of the MSE sector
Upgrade the application of indigenous technologies
(Ministry of Trade and Industry, 2002)
These strategies when implemented may galvanise the
MSEs to play critical roles in national development and
help to create and distribute wealth so as to reduce pov-
erty in the country.
2.1 National ICT Policy and SMEs
To propel SMEs to play meaningful roles in the socio-
economic development of the country requires the adop-
tion and use of ICTs to organize supplies, link customers,
employees, acquire market information including prices
and customer preferences, among others. Conse-
quently, inn the late 2003 the government enunciated
the National ICT for Accelerated Development Policy
(ICT4AD) to prove the framework for utilizing ICTs in every
sphere of socio-economic activities of the country. The
main objective of the policy is to facilitate an ICT-led
socio-economic development process which could trans-
form Ghana into a middle income, information-rich,
knowledge-based and technology driven economy and
society (Ghana Government, 2003b). The achievement
of the objective of the policy entails supporting the devel-
opment, deployment and exploitation of ICT services by
institutions, business enterprises and individuals in the
country.
The policy is to position ICTs as one of the tools to enable
the government to achieve its development goals as en-
visioned in the GPRS I and II. In view of this, the ICT4AD
Policy has identified 14 priority focus areas which ICTs
could play enabling roles to support accelerated national
development. Out of this number, four directly relate to
business activities of which SMEs dominate. These are:
Facilitating the development of the private sector,
Developing globally competitive service sector,
Modernization of agriculture and development of
agro-business
Other ICT-mediated services such as e-banking and e-
business are dramatically affecting the traditional ways
of providing those services and have great implications
for many economic activities. However, small firms may
adopt e-business and e-commerce strategies when
benefits outweigh investment and maintenance costs
(OECD, 2004). The report argues further that the use
of and investment in ICT requires complementary in-
vestments in skills, organisation and innovation and
investment and change entails risks and costs. There-
fore, effective adoption of ICT services by SME calls for
the need for these issues to be addressed
For SMEs which are the dominant economic operatives
in many countries, especially the developing, ICTs offer
great potential for growth, profitability and competitive-
ness. Support for SMEs is buttressed by the Action Plan
developed at the first World Summit of Information So-
ciety held in Geneva, 2003. The Action Plan calls on
governments to develop strategies that will facilitate
widespread use of ICTs to support the growth of micro,
small and medium scale enterprises and boost e-
business. The issue is to what extent does the SMEs in
Ghana have access and use ICTs to enhance their op-
erations and competitiveness? How can SMEs utilise
ICTs to facilitate their economic activities? It is impor-
tant to address these issues since the country’s busi-
ness landscape is dominated by SMEs and they have
great potential in achieving the developmental objec-
tives of the country. This paper is an analysis of the
results of a survey on access and usage of ICT services
by SMEs in Ghana.
2 Overview of Policy Environment for SMEs
The contributions of SMEs to employment and wealth
creation as well as poverty reduction are pronounced.
This is buttressed by the fact that the industrial and
business sector in Ghana is dominated by SMEs, espe-
cially the small enterprises. For example, about 70% of
the Ghanaian enterprises are micro to small sized and
it is estimated that nearly 40% of Ghana’s GNI is attrib-
utable to informal sector activity (Ghana Government,
2002). It is believed that these small firms can easily
propel growth in the economy than the large ones due
to their numbers and niches they occupy in the national
economy.
Therefore, the effective development of SMEs has be-
come paramount and should feature prominently on
government’s development agenda. Fortunately, the
government of Ghana has declared a “Golden Age of
Business” as part of its development agenda, and has
developed a national policy on private sector develop-
ment with the general objective of strengthening the
private sector through undertaking market reforms to
support private sector development and sector-specific
measures for strategic exports (Ghana Government,
2003a). The private sector development policy is largely
to create an enabling environment for business to
thrive and this should not be limited to the large busi-
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ATDF Journal Volume 4, Issue 1
cent had received tertiary education and such operators
can easily migrate to the other categories.
3.2 Access to ICT Facilities
The use of ICT services largely depends on accessibility
and ownership of ICT facilities, but here the emphasis is
on the ownership of such facilities at the business prem-
Developing an export oriented ICT products and ser-
vice industry.
The achievement of the objective of the national ICT4AD
policy entails massive deployment and exploitation of ICT
services by all economic operators, especially the SMEs
to improve their competitiveness not only in the local
market but global as well.
3 Analysis of Survey on Use of ICTs by SMEs
This section discusses the results of a survey on access
and usage of ICT services by SMEs in the three main
commercial and industrial cities in Ghana; namely Ac-
cra/Tema, Kumasi and Takoradi. In all, 280 SMEs
across the various business categories were selected. A
Formality Index was developed to reclassify the SMEs
into various levels of formality – informal, semi formal
and formal. Indicators used to develop the formality
index include: form of ownership, registration with Inter-
nal Revenue Authority and Value-Added Tax (VAT) of-
fices, employees with formal contract of appointment,
strict separation of business finances from personal
ones, and availability of financial records (Stork and
Esselaar 2006).
Using the formality index, 42 percent of the sampled
SMEs fell into the formal category, 33 percent belonged
to the semi formal and the rest to the informal category
(see figure 1).
Indicators covered in the survey among others include;
educational level of owners, access to ICT facility and the
level of usage of such facilities. Under access to ICT fa-
cilities, the study looked at the main CT facilities such as
mobile and fixed line telephones, fax, computers and
internet service.
3.1 Educational Level of SME Owners
Modern forms of ICTs, especially internet-based services
are knowledge-intensive, and therefore certain level of
formal education and literacy is required before one
could effectively appreciate their potency to support busi-
ness activities. Table 1 provides a summary of the edu-
cational background of the owners of the SMEs sampled.
The majority of the SME operators had had some form of
formal education. In all a little over 67 percent of the
operators had received secondary and tertiary education,
while 15 percent had received vocational training. The
relative high literacy level puts the operators in a better
position to utilise the more knowledge-intensive ICT ser-
vices.
Using, the formality index, the enterprises that fell within
the formal category had the highest number of owners
with tertiary education with insignificant percentage with-
out formal education (see figure 2). Interestingly, the
informal category had an appreciable number of owners
with secondary education (34.3 percent), while 20 per-
Figure 1: Business Classification into
Formality
Semi-
Formal
33%
Informal
25%
Formal
42%
Source: Field Data, 2005
Type of education Frequency Percentage
Primary 43 15.4
Secondary 81 28.9
Tertiary 107 38.2
Vocational 42 15.0
Non 7 2.5
Total 280 100.0
Table 1: Formal educational level of business owners
Source: Field Data, 2005
Figure 2: Owner's Highest Education
20 12 7
24
29
28
14
26 67
722
13
51
4
0%
20%
40%
60%
80%
100%
Informal Semi-Formal Formal
No Fo rmal
Education
Vocational
Tertiary
Secondary
Primar y
Sou
r
ce
: Fr
e
m
po
n
g
a
n
d
E
ssegbey,
2
006
Page 6
ATDF Journal Volume 4, Issue 1
ises. However, cognisance is taken of the fact that in
the informal sector in Ghana and other African coun-
tries, lack of ICT facility does not necessarily mean lack
of access. An informal business operator can use the
facilities of a neighbour to meet his/her communication
needs.
In figure 3, mobile telephone was the dominant ICT
facility owned by the majority of the SMEs with Internet
as the least facility. The prominence of mobile tele-
phones is linked to increased mobile telephone sub-
scription in the country. Since 2002, there have been
more mobile telephones in the country than fixed lines.
For example, in 2002, the total mobile telephone sub-
scribers in the country were almost 300,000 while that
of fixed line was around 275,000. At the end of April
2006, the total mobile telephone subscription stood at
3.4 million, while that of fixed line telephones was 0.34
million (NCA 2006). One of the factors which has ac-
counted for increased subscription to mobile telephone
service, in spite of its high cost, is the ease of getting a
subscription. One can subscribe to the service within
few moments after of purchasing the starter packs,
while subscription to fixed line telephone service can
take months and even years depending on the avail-
ability of the service in the area of the applicant. There-
fore, mobile telephone has become important business
tool utilised by SMEs in Ghana.
Formality plays an important role in the type of ICT facil-
ity used by the SMEs. The ownership of fixed lines, com-
puters, and fax and internet connection was associated
more with the SMEs which belonged to the formal cate-
gory. From figure 4, almost 61 percent of the SMEs
which owned computers belonged to the formal cate-
gory, and was followed by the semi-formal category
which registered 28 percent. The formal category rela-
tively had better access to internet at their work place.
These firms are more established and relatively re-
sourced to invest in ICT facilities which have high capi-
tal outlay.
Mobile telephone was popular with all the categories
but more pronounced with the informal enterprises. The
reason for this phenomenon is not far fetched. The use
of other ICT services required a more permanent, se-
cured business structures and premises. However, most
of the informal operators (especially the artisans) operate
in temporary and makeshift structures, most often sited
at unauthorised places. Therefore, the temporary nature
of such structures give credence to the use of more flexi-
ble communication gadgets which one can easily carry
along when the business has to relocate. This and in ad-
dition to others, have made mobile telephones attractive
Figure 3: Level of Access to ICT
Facilities
Computer
17%
Fax
10%
Internet
Conne cti o n
7%
Fixed Line
Tel ephone
25%
Mobile
Tel ephone
41%
Source : F i e l d Data, 2005
Figure 4: Comparison of share of SMEs with access to Ee-devices across formality
42.9
63.4
95.7
1.4
5.7
2.9
18.6
86
43
3.2
4.3
28 32.5
60.7
82.1
47.9
82.1
89.7
Mobile Telephone Fixed Line Telephone Fax Post Box Computers Internet Access from
Office
Informal
Semi-Formal
Formal
Source : Frempong and Essegbey, 2006
Figure 5: ICT Facility Used Most by
Enterpri ses to Link Customers
0
40
80
120
160
Fax
Fixed Line
Tel ephone
Mobile Telephone Email
Internet
Source : F iel d Data, 2005
Page 7
ATDF Journal Volume 4, Issue 1
to the enterprises in the informal category. However, one
cannot discount the issue of high cost in accessing the
other ICT services such as computers, internet and fax,
among others. The investments in these facilities are
relatively higher and this may discourage many of the
informal operators from acquiring them.
To conclude, it is evident that mobile telephone is very
important to the activities of the SMEs, especially those
belonging to the informal category. The question is, be-
side voice communication, what other use is mobile tele-
phone put to by the SMEs? Further, access to the other
ICT services also depend on the level of formality of the
enterprise. The enterprises belonging to the formal cate-
gory relatively had more access to fixed line telephone,
fax, computer and internet access at their offices.
4 ICT Usage by SMEs
The purpose of this section is to discuss the usage of ICT
facilities by the SMEs in their business activities. The
discussion will focus on ICT services such as internet, e-
banking services and short messaging service (SMS).
4.1 Internet Usage
Internet has become one of the pervasive ICT services
which is radically changing the traditional forms of trade
and providing windows of opportunities which enter-
prises, especially those from developing countries could
exploit. It is becoming increasing important that internet
usage should form an integral part of the operations of
the SMEs.
From Table 2 it is obvious that internet has not been in-
grained into the operations of the SMEs, especially those
from the informal and semi formal category. Relatively,
its usage is high among enterprises from the formal cate-
gory. About 39 (about 33.3 percent) enterprises of the
formal companies used internet service from their of-
fices, one company (less than one percent) had the inter-
net service at home, while 27 (23.1 percent) enterprises
personalized the service from internet cafes. In the case
of the informal and semi formal categories the participa-
tion rates were 10 (14.3 percent) and 22 (23.6 percent)
respectively.
Internet cafes should provide a viable alternative for the
SMEs which could not afford individual ownership to gain
access to the service. However, table 2 shows that only
14.3 percent and 20.4 percent of the enterprises from
the informal and semi formal categories respectively util-
ised internet cafes. For those who have internet access
in their offices, it is possible that the usage might be lim-
ited to the management, and thereby preventing the
workers from taking advantage of the potential of the
service. The low uptake of internet by the SMEs in Ghana
is contrasted with the situation in Europe where nine out
of 10 SMEs were equipped with computers at the end of
2000 and early 2001, and Internet was routinely used
among SMEs (OECD, 2004). Another survey conducted
by UNCTAD with the Fundación para el Desarrollo Sos-
tenible en América Latina (FUNDES), in selected Latin
American countries (namely Chile, Colombia, Costa Rica,
Mexico and Venezuela) showed that 97% of the SMEs
surveyed in these countries had computers and 94% had
Internet access.
The question is what benefits are the SMEs gaining from
their usage of the internet service? Figure 6 provides a
summary of internet usage by the SMEs.
From figure 6, the SMEs used the internet mostly for
market monitoring and browsing for new products. The
other use which was relatively prominent was sourcing
for after sales services. These activities, though likely to
be limited to enterprises belonging to the formal category
demonstrate the awareness of some of the SMEs to the
potential benefits of internet to their competitiveness in
both local and global markets.
4.2. E-Banking Services
One of the industries being radically transformed by ICTs
is banking. ICT- mediated services such as automatic
teller machines, electronic fund transfer, electronic
smart cards, cell phone banking among others, are trans-
forming the traditional ways of banking and providing
competitive edge for banks that provide those services.
Consequently, attempt was made to find out the level of
utilisation of these services in the country.
Informal Semi Formal
Office or business 0 3 39
Home 0 0 1
Internet Cafe 10 19 27
No 60 71 50
Total 70 93 117
Table 2: Internet Usage on Formality Basis
Source: Survey Data, 2005
Banking &
Financial
Services
Market
Monitoring
Receiving
Digital
Products
After Sales
Services
Researching
for New
Products
Others
6
46
10 13
52
13
Figure 6: Purposes of Using Internet by Enterprises
Figure 6. Purpose of using internet by enterprises
Source: Field data, 2005
Page 8
ATDF Journal Volume 4, Issue 1
From figure 7 an appreciable number of the enter-
prises have used internet banking mainly to check
their balance and request cheque books. With other
services such as cell phone banking and electronic
fund transfer (EFT), little use had been made by the
SMEs. EFT has been popular in Ghana. Banks like Agri-
cultural Development, Ecobank Ghana Limited, Stan-
dard Chartered Bank, Merchant, Ghana Commercial
Bank and SG-SSB among others are agents of interna-
tional EFT companies such as Western Union Money
Transfer, Money Gram.
The responses on EFT revealed that it is used in
Ghana purely for social purposes – to receive remit-
tances from relations living abroad. It is not being
used for business payments for sale of goods and pro-
vision of services.
In the absence of wide usage of credit cards, EFT
could be used by the informal enterprises to trade in
foreign markets, especially with the emerging African
shops in Europe and America. These shops are mostly
owned by Ghanaians who are domiciled in these coun-
tries who normally order small quantities of merchan-
dise from Ghana. Consequently, the effective use of
EFT could facilitate trade among these enterprises.
To a question on whether the SMEs have interest in
cell phone banking (though almost none had used the
service), over 66 percent of the enterprises declared
interest to use the service in the future. It is interesting
to note that banks such as Standard Chartered and
SGS-SSB, and recently Zenith and CAL Banks have
introduced the service in the country.
The result of the survey shows that e-banking has not
been successful as very few enterprises from the sam-
ple had used the service. It could be speculated that
issues of security and customer confidence, among
others may have constrained the success of the ser-
vice. What is required is aggressive marketing or pro-
motions of the service by these banks in Ghana. It is
hoped that the electronic transaction bill which is un-
der consideration will be passed to provide some pro-
tection to users, and this may provide a fillip for in-
crease patronage of the service in the country.
4.3 Usage of Short Messaging Service (SMS)
In Ghana SMS is one of the cheapest ways of communi-
cation not only among mobile telephone users in
Ghana, but with users outside the country. It is more
prolific than email system therefore, it is important to
know the use of the SMS service by the sampled enter-
prises. From the survey results, 48 percent of the re-
spondents had generally used SMS for communication.
For business, the purposes of usage of the service were
varied and figure 8 illustrates the various uses of the
SMS service.
For business purposes, SMS was mostly used by enter-
prises to contact their suppliers, customers and other
operators. Communication with customers was slightly
higher than with other operators in the market who are
competitors. The question is why that high level of in-
teraction among operators in the same business seg-
ment? In Ghana, especially in the informal sector, there
is a considerable level of market information sharing
among the operators. For example, an informal opera-
tor, who had ran short of a commodity, can easily en-
quire from a ‘competitor’ if he/she had stock of that
commodity, and might even sell on behalf of that com-
petitor. The operators can also consult each other for
market information and seek technical advice. The re-
ciprocity which characterised the informal sector might
have accounted for that level of interaction using SMS.
5 Discussion
In this section, we shall further discuss some critical
issues that emerged from the survey results.
5.1 Mobile Telephones
The analyses have shown the preponderance of mobile
telephones in the activities of the SMEs, notably those
belonging to the informal category. For this group, the
survival and the competitiveness of their economic ac-
tivities, among others are propelled by the use of mo-
bile telephones. Therefore, the existence of an efficient
171
99
279
1
279
1
0
70
140
210
280
Internet
Banking
Cel l Ph on e
Banking
Electronic
Fund
Transfer
Figure 7: Usage of E-Banking Facilities
Yes
No
Source: Field Data, 2005
Figure 8: Business Purposes of Using SMS
117
100
12
5
123
Other Operators
Suppliers
Linking Customers Getting Information
Others
Sour ce : Field Data, 2005
Page 9
ATDF Journal Volume 4, Issue 1
African Science Communication Conference
Nelson Mandela Metropolitan University, Port
Elizabeth , South Africa.
5-7 December 2006
The South African Agency for Science and Technol-
ogy Advancement (SAASTA) will be hosting an Afri-
can Science Communication Conference focusing
specifically on the need to develop this field and es-
tablish collaborative networks on the African conti-
nent engaging academies, universities, the public,
science centres and private research centres, as well
as industry, the media, the education field and pro-
fessional practitioners
For details contact: http://www.saasta.ac.za/ascc/
index.shtml
mobile telephone infrastructure in the country is cardi-
nal to SMEs development. However, the use of mobile
telephones should not be limited to voice communica-
tion, but to other services such as banking, internet
access and market surveillance, among others. For e-
banking, a number of banks in the country have devel-
oped services (such as request for cheque book, bal-
ance enquiry, request for statement, check transac-
tions) which can be accessed through one’s mobile
telephone. This has the advantage of reducing transac-
tion cost in terms lost of man hours spent at a bank to
request for a cheque book or make balance enquiry.
The adoption of GPRS technology by the mobile tele-
phone operators in the country provides the opportunity
for users of the service to access internet using their
already acquired handset. Relatively, this has the ad-
vantage of less cost of access to the internet for limited
usage in the form of sending and receiving emails. With
the adoption of this technology, over 5million mobile
telephone subscribers in the country could have access
to internet through their handsets. Therefore, if the ser-
vice is effectively utilised, it will considerably increase
the total internet subscription in the country
One important use of mobile telephones which has not
been exploited effectively in the country relates to ad-
vertisement. The increasing mobile telephone subscrip-
tion provides an avenue for the SMEs to use the service
to advertise their products and services. One SMS ad-
vert sent by a mobile telephone operator will reach all
the subscribers of its service and this may be better
than radio or TV advert which one can easily miss if the
communication gadget (radio and TV) has been
switched off. With the SMS advert, it can be saved for
future reference and one can still receive the message
later if his/her handset was initially turned off. Though
the cost implication is not known, it is important that
this service should be explored by the SMEs. It also
means that the operators should adopt a competitive
pricing system which could attract many potential SMEs
to use the service to advertise their products. There-
fore, it is important that aggressive marketing promo-
tions (including cost incentives) are initiated by the mo-
bile telephone operators to encourage the use of their
value-added services.
5.2 E-banking Services
The discussion has shown that the SMEs have little
knowledge and usage of e-banking services. The survey
did not explore the rationale behind the use or non use
of these services, neither did it enquire about the ex-
periences of the very few enterprises which have used
these services. However, it can be speculated that the
less patronage of the e-banking services could be
linked to the usual problems associated with adoption
of new technologies. Adoption and innovation theory
has indicated that a number factors namely; channel of
communication of the innovation, time of diffusion of
the innovation and the community of potential adopters
affect the rate of adoption of new technologies or inno-
vations. These factors, in addition to others may have
accounted for the poor the adoption of e-banking ser-
vices. As already mentioned, the critical problems hin-
dering the acceptance of e-banking services are secu-
rity and absence of legal framework to govern the entire
electronic services in the country. Increasing banking
fraud is putting off many potential users. It is hoped
that actions will be expedited by Parliament on the Elec-
tronic Transactions Bill to provide legal framework for e-
services in the country.
5.3 Internet Services
Literature is fraught with information on the role inter-
net plays in supporting competitiveness of SME. There-
fore, it is important that every business enterprise gain
access and use the internet service to enhance their
economic activities. The question is, if the stated asser-
tion is true, then why the low level usage of the service
in the country, given the relatively high literacy rate
among the owners of the SMEs? Is it a question of
availability and affordability of the service?
Interaction with an official of the Ghana Export Promo-
tion Council (GEPC) revealed that most of the SMEs,
though functionally literate are not computer and inter-
net literate. As a result, the staff of GEPC has to per-
form internet searches on on-line databases on behalf
of these people. Therefore, there is the need for private
and statutory bodies responsible for SME development
to integrate computer and internet training into their
activities. The small number of SMEs using internet
services raises the need to developing a policy frame-
work that will sensitize the SMEs, especially the infor-
mal and the semi formal to integrate internet into their
general operations.
Besides, there are other barriers to the use of internet
in the activities of the SMEs, especially the informal
ones. These include:
products/services not suitable for sale on the inter-
net,
customers or enterprises not ready to participate in
e-commerce,
security problems concerning payments,
Uncertainty about contracts terms of delivery &
guarantees,
Logistical problems (Frempong and Essegbey,
2006)
Conclusion
The paper has shown the level of ownership and usage
of ICT facilities by the SMEs in Ghana. It is evident that
the extent and the type of ICT service used are linked to
the formality of the enterprise. Mobile telephone was
highly used by the enterprises belonging to the informal
category while other services such as fixed line tele-
phone, fax and internet were largely used by the formal
Page 10
ATDF Journal Volume 4, Issue 1
and to some extent the semi formal categories.
One striking thing is that internet usage may not be
directly linked to the level of literacy, as in spite of the
relatively high literacy rate among the SME owners,
internet usage was not appreciable. Thus, adoption
may be underpinned by commercial considerations
such as cost of investment and the potential returns on
business activities. Once these are not favourable to
the SMEs, their usage of the service may be low. How-
ever, one cannot discount the importance of literacy in
the use of knowledge-intensive service as internet, but
commercial considerations are strong. Though the gov-
ernment has put in place a national policy on ICTs and
also is in the process of developing action plans to im-
plement the strategies of the policy, it is imperative that
issues of affordability should be addressed critically.
Finally, with the preponderance of mobile telephone
usage by all business categories, it is essential that
value-added services emanating from the mobile tech-
nology are effectively utilised for business considera-
tions.
References
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Case Study”, in Stork and Esselaar (Eds), Towards
an African e-Index: SME e-Access and Usage, Link
Centre, Witwatersrand, South Africa
2. Government of Ghana (2003a) National Medium
Term Private Sector Development Strategy 2004 –
2008, Volume 2: Action Plan
3. Ghana Government (2003b). The ICT for Acceler-
ated Development (ICT4AD) Policy. Accra: Graphic
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4. Ghana Government (2003c) An Agenda for Growth
and Prosperity: Ghana Poverty Reduction Strategy
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5. Humphrey, H. Mansell, R. Pare, D. and Schmitz, H.
(2003) The Reality of E-Ecommerce with Developing
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6. Labbé, M (2006) Internet and Trade. Paper pre-
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Industrial Policy for Increased Competitiveness:
Micro and Small Enterprise Policy Paper
8. NCA, (2006) Market Statistics http://
www.nca.org.gh
9. NDPC (2005) Growth and Poverty Reduction Strat-
egy (GPRS II) (2006 – 2009), Vol. 1, Accra
10. OECD, (2004) Promoting Entrepreneurship and
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bul, Turkey
11. PANOS Institute (2004) Completing the Revolution:
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No. 48, London
12. UNCTAD, (2005) E-Commerce and development
Report 2004, Geneva
... This highly skewed distribution in e-commerce growth implies an unbalanced benefit spread , which further widens the digital and financial divide between developed and developing countries (Olusola and Motunrayo, 2015). Frempong (2007) however, argues that with proper structuring and modelling, e-commerce could be the disruptive tool SMEs in developing counties could use to escape the 'poverty cycle'. ...
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Ghana Case Study Towards an African e-Index: SME e-Access and Usage
  • G K Frempong
  • G Essegbey
Frempong G.K and Essegbey, G.O (2006) " Ghana Case Study ", in Stork and Esselaar (Eds), Towards an African e-Index: SME e-Access and Usage, Link Centre, Witwatersrand, South Africa
Market Statistics http
NCA, (2006) Market Statistics http:// www.nca.org.gh
Completing the Revolution: The Challenge of Rural Telephony in Africa
  • Panos Institute
PANOS Institute (2004) Completing the Revolution: The Challenge of Rural Telephony in Africa, Report No. 48, London
Growth and Poverty Reduction Strategy
NDPC (2005) Growth and Poverty Reduction Strategy (GPRS II) (2006 -2009), Vol. 1, Accra
Integrated Industrial Policy for Increased Competitiveness: Micro and Small Enterprise Policy Paper 8
  • M Labbé
Labbé, M (2006) Internet and Trade. Paper presented at Web Marketing for Organic & Natural Products Workshop held in June, Accra, Ghana 7. Ministry of Trade and Industry (2002) Integrated Industrial Policy for Increased Competitiveness: Micro and Small Enterprise Policy Paper 8. NCA, (2006) Market Statistics http:// www.nca.org.gh
Internet and Trade. Paper presented at Web Marketing for Organic & Natural Products Workshop
  • M Labbé
Labbé, M (2006) Internet and Trade. Paper presented at Web Marketing for Organic & Natural Products Workshop held in June, Accra, Ghana
Promoting Entrepreneurship and Innovative SMEs in a Global Economy: Towards a more Responsible and Inclusive Globalisation. The 2nd OECD Conference of Ministers Responsible for Small and Medium-Sized Enterprises (SMEs)
OECD, (2004) Promoting Entrepreneurship and Innovative SMEs in a Global Economy: Towards a more Responsible and Inclusive Globalisation. The 2nd OECD Conference of Ministers Responsible for Small and Medium-Sized Enterprises (SMEs), Istanbul, Turkey