Without Digital Infrastructure, Africa's SMEs Cannot Lead the Continent's Future

Biola Ngang | Africa Fellow

Image sourced from PyPSA-Earth Authors via Wikimedia Commons

Small and medium-sized enterprises (SMEs) are the backbone of Africa's economies. They account for more than 80 per cent of employment across the continent and contribute over 40 per cent of GDP in many African countries. Yet despite their importance, African SMEs remain constrained by one persistent structural challenge: inadequate infrastructure investment. The infrastructure gap is not just physical. Africa's underinvestment in digital infrastructure is emerging as a major barrier to SME growth, and to the broader ambitions of the African Continental Free Trade Area (AfCFTA).

The African Development Bank estimates the continent faces an annual infrastructure financing gap of US$68 to US$108 billion, against a requirement of US$181 to US$221 billion through 2030. Roads, ports, energy, and logistics remain underdeveloped, creating major challenges for SMEs that rely on reliable transport and energy. A growing challenge, however, is the widening gap between investment in physical infrastructure and investment in digital infrastructure at a time when digital systems are becoming central to SME growth.

The Digital Gap Within the Infrastructure Gap

Africa processed 65 per cent of global mobile money transaction value in 2024, totalling approximately US$1.1 trillion, according to the GSMA report. Mobile-first financial services have transformed economic participation across the continent, enabling millions of SMEs to access payments, credit, and customers they could not reach before. And yet Africa still accounts for just 0.6 per cent of global data centre capacity, according to the ADCA report, which places Africa's active capacity at 360MW against a global total of 55GW. Digital infrastructure investment in fibre networks, data centres, cloud platforms, and broadband connectivity remains deeply underfunded.

The consequences for SMEs are direct. Weak digital infrastructure limits access to financial services, restricts market reach, and excludes many SMEs from the digital economy. African SMEs already face a financing gap of over US$300 billion annually. As Afreximbank's Executive Vice President Kanayo Awani stated at the Intra-African Trade Fair 2025 in Algiers, SMEs account for more than 90 per cent of Africa's businesses and over 60 per cent of employment and GDP yet continue to face a financing gap of this scale. Weak digital infrastructure is increasingly recognised as one of the main barriers to closing this gap.

Physical Infrastructure Still Matters, But It Is Not Enough

This is not an argument against physical infrastructure. Roads, ports, and energy systems remain foundational. According to the Economic Outlook, transport infrastructure accounts for the largest share of Africa's financing gap at 72.9 per cent of total need, reflecting decades of underinvestment in road networks, railways, and freight systems. High cargo dwell times at ports, reaching 15 to 20 days in some countries compared to 3 to 4 days in Asia, continue to impose significant costs on businesses moving goods across the continent. These delays impose real costs on SMEs and reduce their competitiveness.

But physical and digital infrastructure are not alternatives. They are complements. An SME that can move goods efficiently but cannot access digital payment systems, reach customers online, or participate in cross-border trade platforms is still locked out of its full market potential. As the AfCFTA creates a common market of more than 1.4 billion people, the ability of SMEs to realise that opportunity depends on seamless digital systems that can move money, credit, and data across borders quickly, securely, and affordably. The trade pact's ambitions cannot be fulfilled by roads alone.

The AfCFTA Needs a Digital Foundation

The AfCFTA represents one of the most consequential economic developments in Africa's recent history. But its potential is contingent on infrastructure investment that matches its ambition. The UN Commission for Africa estimates that implementing the AfCFTA will require US$411 billion in transport infrastructure investment alone. Digital infrastructure must sit alongside this. The OECD report identifies fibre-optic cables, representing 23 per cent of Africa's total infrastructure need, and digital public infrastructure as critical enablers of cross-border trade finance and customs for SMEs.

The Broadband Commission estimates that achieving universal broadband access by 2030 would require an investment of US$108 billion. OECD modelling suggests sustained infrastructure investment of US$155 billion annually could lift Africa's long-run GDP growth toward 8.9 per cent. The question is whether governments and development partners treat digital infrastructure as a strategic investment rather than a secondary complement to physical infrastructure.

Governance and Policy Must Catch Up

Closing Africa's digital infrastructure gap is not only a financing challenge. It is a governance challenge. Effective investment requires policies that prioritise digital connectivity, encourage private investment, and strengthen institutional capacity. Public-private partnerships in digital infrastructure such as shared fibre on power lines and railways gain traction and offer scalable models that reduce costs and expand reach. As the WEF report on AfCFTA implementation notes, geography, infrastructure, and connectivity remain among the most critical operational bottlenecks to realising the trade area's potential.

Africa's SMEs cannot lead the continent's economic future if they are operating on infrastructure built for a different era. The AfCFTA has created the architecture for continental trade. The demographic dividend is real. The entrepreneurial energy across African cities and communities is undeniable. What remains is the political and institutional will to invest in the digital foundations that will determine whether that energy translates into sustained, inclusive growth, or continues to be constrained by a gap that was foreseeable and avoidable.

Biola Ngang is an African - Australian student of International Relations, Business

Information Systems and Economics at Macquarie University, with interests spanning

technology, financial systems, infrastructure, and economic development. She serves as a Board Director at Rose Breast Health and volunteers with Young Australians in International Affairs as a Sydney Events Officer.

Biola is the Founder of Colliq Systems Pty Ltd, a governance and operations SaaS platform supporting not-for-profits, NGOs, SMEs, and organisations in Australia and globally. Through her work across startups, technology, financial services, and governance, she explores how digital infrastructure and institutions can support organisational resilience and sustainable economic growth.

Biola is an alumna of the Emerging Leaders in Australia - Africa Diplomacy (ELAAD) Program, convened by the Australian African Universities Network and Curtin University.

She is particularly interested in Africa's evolving role in global affairs, Australia - Africa

relations, and how entrepreneurship, innovation, and financial systems can contribute to the continent's continued transformation.

Disclaimer: The views and opinions expressed in this article are those of the author, and do not necessarily reflect the views and opinions of Young Australians in International Affairs. AI tools were used by this author for grammar checks and idea refinement, but all content is original, and no plagiarism has been used in the preparation of this article.