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New Mastercard Whitepaper Shows that Digitalization is Key to Unlocking SME Growth Potential in Middle East & Africa

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Small and medium enterprises (SMEs) across the Middle East and Africa (MEA) region are recognizing digitalization as essential to staying competitive in a transformed business and economic environment.

The insight is one of many in a new white paper by payments technology leader Mastercard, which explores the way small businesses are viewing digital payments, online presence and the benefits of an evolving cashless economy.

The white paper, titled ‘The Digital SME: How Are Small and Medium Enterprises in the Middle East and Africa Embracing a Digital Future?’, is an in-depth follow-on study from the data-rich Mastercard MEA SME Confidence Index 2021. This piece of research released findings about the importance of digitalization and rising confidence levels as SMEs across sectors, products, and services in the region, adapt to the new and evolving economic landscape.

It revealed that SMEs in MEA recognize faster access to revenue as the biggest benefit of a cashless economy to their business (44%). Other benefits identified include the ease of not handling or processing cash (50%) and having more convenient ways of paying suppliers and employees (50%).

Overall, 67% of MEA SMEs say e-commerce will have a positive impact on their business. A highlight from the study is that 89% of SMEs in Kenya, 81% in West Africa, particularly Nigeria, and 73% in the Ivory Coast believe the same.

The white paper also found that digitalization has progressed globally since 2018, but has seen higher traction among larger corporations and financial institutions than among SMEs.

It accelerated in 2020-21 to enable continuity of business, with the OECD estimating 70% of SMEs globally intensifying their use of digital technologies due to COVID-19 restrictions. Currently, according to the Mastercard MEA SME Confidence Index, digital payment methods used by MEA SMEs include mobile (59%), online (49%), and cards (48%).

“An empowered SME sector is a growth engine for the economic development of countries across the Middle East and Africa. But the challenges are many, chief being access to funding and digitalization which have emerged as huge needs. The Mastercard MEA SME Confidence Index found that 89% of SMEs in the region see potential in digitalizing their business which is encouraging for everyone within the digital economy,” said Gaurang Shah, Head of Products, Middle East and Africa, Mastercard.

Increasingly, SMEs are recognizing the practical benefits of digitalization in day-to-day operations, as opposed to viewing it as a long-term project for the future. There’s a solid case for this when data shows that 41% of SMEs that implemented digitalization initiatives, had stronger revenue growth in 2020 than non-adopters. Digitalization of SME operations also brings the benefit of generating data that institutions need to view an SME as a “real” business with potential and make more informed credit decisions. This helps bring small businesses into the financial mainstream.

Partnerships play a key role in the digitalization of SMEs

The white paper also found that partnerships play a key role in the digitalization of SMEs. A stable, growing, connected small business can be the key to financial inclusion for the whole community.

“As a technology company, Mastercard has leveraged the power of partnerships to deliver inclusion by providing financial, technology, product, and services support to SMEs across the world.

“Connecting businesses to one another within the ecosystem, to help them grow and prosper, is a key objective for Mastercard. For a neighborhood vendor or store, there are simple solutions to reduce the risk and cost of cash, and open up sales to more customers.

“At Mastercard, we continue to leverage our technology, insights, global expertise and partnership approach to empower every business, especially SMEs, everywhere to grow digitally, become stronger than before, and prosper in a more connected, equal, and inclusive world,” said Amnah Ajmal, Executive Vice President, Market Development, MEA, Mastercard.

MEA SMEs reclaiming confidence after COVID 19

Although challenges related to the COVID-19 pandemic remain, small businesses in MEA are reclaiming confidence. The Mastercard MEA SME Confidence Index found 74% of SMEs in the region are optimistic about future growth, guided by the potential for digitalization, better data, access to credit and upskilling.

According to the Organization for Economic Cooperation and Development (OECD), up to 70% of SMEs globally have intensified their use of digital technologies in the wake of COVID-19. However, the gaps in SME digital adoption have not been filled.

The challenges include access to infrastructure, lack of a data culture and digital awareness, and financing gaps for transformation costs, among others. Access to financing remains a key concern for SMEs worldwide, with the IFC estimating an unmet need of USD 5.2 trillion per year.

Through technology services, cyber assessments, insights, grants, digital training, mentoring platforms and knowledge initiatives, Mastercard will contribute $250 million over five years to support small businesses’ financial security globally.

As part of its goal to build a more sustainable and inclusive world, Mastercard has committed to connect 50 million small businesses, including 25 million women entrepreneurs globally, to the digital economy by 2025.

 

 


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Ugo Onwuaso is an ICT enthusiast. He believes technology should be used for general good. He holds a Master of Public Administration (MPA) degree from the Lagos state University. Dear Reader, Your support matters. But we believe that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. That is why, we have devoted our energy to independent reportage of technology and finance and how they affect lives. Our incisive and analytical view of how technology news affects the daily life help individuals and organizations make up their minds. Quality journalism costs money. Today, we're asking that you support us to do more. Kindly support our effort to deliver technology and finance journalism to everyone in the world. Donate as little as N1,000. Bank transfers can be made to: UBA Plc 1017156876 Communication Week Media Ltd

General News

FG Plans N50m STEEM Grant to Support Student Innovation in August

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In a giant stride to support innovation, entrepreneurship and economic transformation, the Federal Government is set to unveil a N50 million grant for Science, Technology, Engineering, Mathematics and Medical Sciences (STEEM) students in Nigeria’s tertiary institutions.

The project, which is referred to as the Student Venture Capital Grant (S-VCG), is a pioneering initiative designed to empower the students towards building the next generation of scalable, job-creating ventures.

According to a statement by the Director of Press and Public Relations in the Ministry of Education, Folashade Boriowo, Friday, the initiative will be formally unveiled in August by the Minister of Education, Dr. Tunji Alausa.

Boriowo stated that the minister made the disclosure during a stakeholders’ engagement session held in Abuja in the presence of vice-chancellors, provosts, rectors, student leaders, academic staff, and development partners, and will chart a collective course for nurturing student-led innovation.

The statement noted that the grant targets full-time undergraduate students in STEMM disciplines (Science, Technology, Engineering, Mathematics and Medical Sciences), specifically those in 300 level and above.

“Each selected student-led project will be eligible to receive startup funding of up to N50 million, along with access to mentorship, incubation services and business development support.

“The initiative will be implemented in partnership with the Bank of Industry (BoI) to ensure financial transparency, impact measurement and effective project execution.

“S-VCG is not just a grant. It’s a launchpad for bold, young innovators to lead Nigeria’s industrial and technological transformation,” said Alausa.

Speaking at the session, the Minister of State for Education, Prof. Suwaiba Sa’id Ahmad, described the grant as a strategic investment in Nigeria’s knowledge economy.

“We’re building a stronger, more competitive future by supporting innovation from the ground up,” she said, adding that the programme’s design was informed by months of consultation with students, faculty and institutional leaders.

Participants at the event welcomed the STEMM-Up Grant as a timely, strategic and high-impact initiative that will drive youth innovation, tackle graduate unemployment, and position Nigeria as a hub for student-led entrepreneurship in Africa.

 


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UK Businesses Look to Africa As Strategic Growth Partners

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New research by UK-based Strategy Management Partners reveals that a growing number of British businesses are identifying Africa as a key strategic growth region – drawn by structural reforms, demographic momentum, and rapid digital transformation across the continent.

The research, based on a survey of senior decision-makers from 250 large UK-based companies, finds that 50% are already active in African markets and planning to expand further.

An additional 28% are considering entry, signalling a clear uptick in long-term interest from international businesses with the resources to scale regionally.

The findings challenge outdated perceptions of Africa as a high-risk or secondary market. Instead, they highlight key drivers behind renewed commercial interest: • 61 per cent of UK leaders cited Africa’s large and growing consumer markets as a major draw. • 61 per cent pointed to the continent’s rapid pace of digital and technological adoption. • 50 per cent highlighted the potential of Africa’s young, skilled, and digitally native population.

The study also suggests that Africa is no longer viewed simply as a market for philanthropic initiatives or shortterm gain. Only 20 per cent of respondents cited philanthropic motives, while most are focused on building commercially viable, long-term operations.

Initiatives like the African Continental Free Trade Area (AfCFTA), are also laying the groundwork for significant economic growth.

With 23 countries already implementing preferential tariffs, the framework is expected to facilitate smoother intra-regional trade, enable market scale, and support more efficient supply chains.

These structural improvements are making Africa more attractive to global firms with the ambition to operate at scale.

However, despite rising optimism, significant operational and policy challenges remain. The top four barriers to investment cited by UK business leaders were: political and country risk (68%); safety and security issues 66.4%); regulatory barriers and tariffs (60.4%); and the complexity of cross-border transactions (60%).

Addressing these issues will be crucial to unlocking Africa’s full potential for UK investment. UK companies are showing the most interest in sectors that align with Africa’s core strengths, such as natural resources, agriculture, a young and expanding population, and infrastructure development.

These areas are seen as the backbone for long-term commercial growth, offering opportunities to build local supply chains, expand digital services, scale manufacturing, and meet rising consumer demand.

However, for companies looking to invest or expand into Africa, success also depends on key enabling conditions. According to business leaders surveyed, the top factors supporting investment are: • The size of market and consumer demand (49.6%) • Reliable and consistent energy supply (48.4%) • Access to affordable, educated and capable talent (44.8%) • Efficient transportation networks, such as roads, ports, airports (38%) • A favourable macroeconomic environment: low interest rates, low inflation, stable exchange rates, and seamless cross-border transactions and repatriation of earnings(38%).

“UK businesses are increasingly seeing Africa as a strategic growth market, driven by structural reforms, digital adoption, and the momentum behind the African Continental Free Trade Area (AfCFTA),” says Muibat Ijaiya, Partner at Strategy Management Partners.

“But real progress will depend on practical cooperation with African governments. The AfCFTAis a pivotal step forward – what’s needed now is a deeper alignment between public policy and private investment to address trade, regulatory and infrastructure barriers, and unlock long-term, sustainable growth.”

 


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Experts Champion Sustainability at Lagos Green Economy Forum

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Lagos State’s transition to a greener economy is gaining momentum, with female leaders from top corporations taking the lead and the state government beginning to record early wins from its plastic bag policy.

At the Lagos Green Economy Forum held on July 23, senior executives from MTN Nigeria, IHS Towers, TechnoServe, and other large organisations highlighted the role of corporate innovation in advancing sustainability.

The all-female panel also emphasised the urgent need to integrate Nigeria’s thousands of small and medium enterprises (SMEs) into the country’s green transition.

“We’re not just here to share strategies,” said Temilade Olabanji, Senior Manager, Sustainability and Shared Value, MTN Nigeria. “We are here to build local resilience. Our Project Zero is not only helping us cut emissions but also equipping our suppliers with the knowledge to do the same.”

MTN’s Project Zero aims for net-zero emissions by 2040, with a 50% reduction target by 2030. The company is already powering base stations and data centres with renewables, while training suppliers to understand carbon footprints and adopt circular practices. MTN has pledged that by 2026, 80% of its top suppliers will align with its sustainability goals.

Titilope Oguntuga, Director of Sustainability, IHS Towers, reinforced this approach, noting that the company’s Project Green is decarbonising its over 16,000 tower sites across Nigeria by switching to renewable energy. “Project Green is enabling all sites to run effectively with more renewable sources of energy rather than the typical fossil fuels,” she said. IHS also runs Clinic Without Walls, a free micro-health insurance scheme for underserved communities.

From the nonprofit sector, Juliet Ezeani, Senior Business Advisor of TechnoServe, explained how the organisation supports vendors through environmental impact assessments, sustainability training, and responsible procurement.“For all our projects, we look at how the project runs and especially how it affects the environment,” she said.

Meanwhile, the Lagos State Government provided an update on its green policy efforts, especially the plastic bag ban introduced two months ago.

“All of what we have done so far is towards making the economy of Lagos or the quality of life of the average Lagosian much better,” said Dr. Babatunde Ajayi, General Manager of the Lagos Environmental Protection Agency (LASEPA), who represented the Honourable Commissioner, Mr. Tokunbo Wahab.

On the plastic bag ban, he added: “What that [the ban] has also done is to free up our drainage from the plastic waste. In some way, we have reduced flooding, reduced pollution, and reduced the headache and the cost of maintaining drainages and labourers.”

Dr. Ajayi emphasised that green transition is not just a compliance issue for SMEs but an economic opportunity. “It helps them drive their engines, their entire businesses in a more sustainable manner.”

As Lagos accounts for nearly 30% of Nigeria’s GDP, the increasing alignment between corporate leaders and public policy towards a greener economy is positioning the state as a model for inclusive, environmentally responsible development.


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