Digitalization: The strategic imperative for African businesses

In today’s rapidly changing world, digital transformation is no longer a luxury—it’s a necessity. Businesses across Africa, regardless of size or industry, are beginning to understand that integrating digital technology into every facet of operations is critical not only for survival but for thriving in a competitive global market.

Digital transformation goes beyond building websites or launching mobile apps. It’s about embedding digital thinking into the core of a company’s strategy. From leveraging data to improve customer insights, to automating internal processes for operational efficiency, digitalisation is a multi-dimensional process that can redefine how businesses operate.

For Africa, where technological infrastructure has historically lagged, the gains made in recent years show significant promise. Despite infrastructure limitations, Africa’s digital landscape is evolving at an impressive rate. According to the World Bank, over 160 million Africans gained broadband access between 2019 and 2022. This growth signals more than just an increase in internet users—it’s a shift in the way African businesses are starting to operate.

However, many companies still view digitalisation as an auxiliary initiative. This perspective is dangerously outdated. Forward-thinking companies across Africa are already integrating digital tools to future-proof their operations. These businesses recognize that success in the 21st century requires leveraging technology not only to meet customer expectations but also to optimize internal efficiencies.

Today’s customers are more informed, more connected, and more demanding than ever before. For African businesses, this presents both a challenge and an opportunity. The challenge lies in meeting these expectations, but the opportunity is immense: digitalisation enables businesses to reach and engage with customers in ways that were previously unimaginable.

Consider the role of mobile phones. In 2017, Africa boasted 700 million mobile phone users, and by 2022, more than 763 million mobile money accounts were in use across the continent. This represents a paradigm shift—mobile phones are now facilitating commerce in ways that traditional banking infrastructures cannot. Companies that can integrate mobile and digital payment solutions into their operations are positioning themselves to tap into a massive, underserved market.

Furthermore, digital tools provide critical insights into customer behaviour. Every transaction, every click, and every interaction generate data that can be analyzed to improve customer experiences. Businesses that harness these insights can deliver personalized services, fostering deeper loyalty and improving their competitive edge.

One of the most overlooked benefits of digital transformation is the impact it can have on internal operations. Many businesses focus on the customer-facing elements of digitalisation but fail to consider the significant cost and time savings it can bring to their backend processes.

Through automation, businesses can streamline repetitive, time-consuming tasks. Whether it’s automating procurement processes, digitizing supply chain management, or using AI-driven solutions to manage customer service inquiries, digital tools allow businesses to achieve more with fewer resources. A case in point: one company that digitized its procurement process reported a 35% reduction in costs, saving nearly USD 300,000 monthly on diesel purchases alone.

Moreover, automation reduces the margin for human error. Tasks that once required manual input—such as inventory management or data entry—can now be handled efficiently and accurately by digital systems, freeing up employees to focus on higher-value tasks that drive innovation and growth. For industries that depend on mission-critical software—such as telecommunications, financial services, and retail—the stakes are even higher. In these sectors, digital transformation isn’t just about gaining a competitive edge; it’s about mitigating risks and maintaining stability.

A failure in digital infrastructure can lead to significant operational disruptions, resulting in lost revenue and damaged customer trust.

With digitalisation, businesses can deploy advanced IT monitoring systems that allow them to pre-emptively identify potential failures—whether they stem from application bugs, network issues, or hardware malfunctions.

These systems help mitigate the impact of technical disruptions on customer experience, thus safeguarding both reputation and revenue.

Nevertheless, while the technology itself is crucial, the people behind the technology are just as important. Digitalisation is not merely about deploying tools but about creating a workforce capable of leveraging those tools effectively.

A tech-savvy workforce can collaborate more efficiently, innovate more effectively, and drive long-term growth. Digital literacy is no longer confined to the IT department. Today, every function within a business—from finance and HR to marketing and customer service—needs to understand and utilize digital tools. Companies that invest in training their employees to use digital platforms will see dividends in the form of improved efficiency, greater innovation, and a stronger competitive position in the market.

As Africa’s digital landscape continues to evolve, businesses that fail to embrace digital transformation will be left behind.

The challenges are clear: resistance to change, upfront investment costs, and the need for new skill sets. But the rewards far outweigh these challenges.

Businesses that embrace digitalisation will not only improve their operational efficiencies and customer engagement but will also be better positioned to scale and compete on a global level.

The key to unlocking this potential lies in viewing digitalisation as a strategic imperative, not an afterthought. For Africa to truly capitalize on the benefits of the digital age, businesses must integrate digital thinking into the heart of their operations. Those that do will be well-positioned to drive innovation, improve profitability, and secure long-term growth in a fast-changing global economy.

Muyiwa Arowosegbe is the Chief Technology Officer (CTO) of Ghanian-based tech firm, Ostec IT. He writes from Accra.