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1264 Factors Affecting E-Business Adoption by SMEs in Sub-Saharan Africa Number (N) Percent (%) Preference for conducting business: Face-to-face Telephone / fax The Internet Others 63 29 14 11 100 43 22.2 17.5 Does your business have a web page? Yes No 5 58 7.9 92.1 Are you planning having a web page in the near future? Yes No Undecided Missing data 51 4 4 4 81 6.3 6.3 6.3 Does your business have Internet access? Yes No Missing data 57 4 2 90.5 6.3 3.2 Which one in particular? Email WWW (web page) Intranet / extranet Others Missing data 53 5 2 2 1 84.1 7.9 3.2 3.2 1.6 How often do you use the Internet (email, WWW etc.)? Very often Often Sometimes Never used it 35 23 3 1 56.5 37.1 4.8 1.6 Where do you (and your business) access the Internet? Own business premises Cyber café Public places (library etc.) Friend’s Other places 8 49 1 2 2 12.9 79 1.6 3.2 3.2 Accepting the Internet as a source of business and business information Surely Not too sure It cannot be No comment 56 5 1 1 88.9 7.9 1.6 1.6 Table 2. The Internet and SMEs in Nigeria 1265 Factors Affecting E-Business Adoption by SMEs in Sub-Saharan Africa VRRQWKDWFRXOGKDYHLQÀXHQFHGWKHUHVSRQVHV received. Lastly, the use from two sources may have impacted the results of this study. FINDINGS AND RESULTS The response provided by the participants is provided in Table 2. All the participants in this study accepted that they prefer doing business face-to-face with their customers. Of which, 43% also picked the tele- phone/fax as a medium by which business could EHFRQGXFWHG7KLVLVFRQVLVWHQWZLWK¿QGLQJVE\ Duncombe and Heeks (1999), where direct contact with customers is regarded as the most effective method in business dealing for SMEs in Botswana. Though, in that report 70% use the telephone/fax, which is more than what is obtained in this study. This difference is perhaps explained by the more favorable telecommunication and infrastructural indicators for southern parts of Africa (ITU, 2004). In this study, only 22.2% indicate they could use the Internet for doing business, in addition to face- to-face dealings. This might be a result of social factors. To illustrate this point, a proprietress RIDFRQIHFWLRQDU\EXVLQHVVFRPPHQWV³,PDNH wedding cakes and also participate in the [wed- ding] ceremonies; my presence is a must for my business…The Internet can’t help my business.” Further, some scholars commentated about the sociocultural imperatives that might somewhat LQÀXHQFHWKHQHHGWRKDYHface-to-face business dealings in SSA (see for example: Ojo, 1996; Okoli & Mbarika, 2003; Sachs & Warner, 1997; Udo & Edoho, 2000; Woherem, 1996). Essentially, the societies in SSA thrive on informality in contrast to the mechanistic preponderance that may exist in the West (Ojo, 1996). Also, the fear of using credit cards due to fraud or lack of experience with such facilities are reasons why online business may be lagging in the region (Ajakaye & Kanu, 2004; Chitu, 2003; Travica, 2002). Regardless, DERXW RI WKH UHVSRQGHQWV ³VXUHO\´ DFFHSW that the Internet could be a source of business and business information. Likewise, assess to the Internet, in particular the e-mail seems to be from cyber cafés. Very few organizations in this sample indicated that they have facilities such as intranets and extranets. With respect to Web page ownership, only 7.9% of our participants have such a facility. A closer look reveals that entities directly involved in the technology-related business responded to having such Web pages. In contrast, evidence from the developed countries, show pervasive use and ownership of Web pages by businesses—small and large (Beck et al., 2003; Lockett and Brown, 2003). In that respect, Walczuch et al. (2000), ZULWH WKDW ³ RI 'XWFK ¿UP VPDOO EXVLQHVV had their own Web site by February 1999.” In the UK, the body tasked with promoting the spread of e-business by SMEs in the country has long overtaken the target of getting 1.5 million SMEs online. Furthermore, 50% of our respondents plan to have Web pages in the future. Realistically, this study indicates that SMEs in Nigeria are yet to get WKH³K\SH´$O4LULPFLWHV.DODNRWDDQG Robinson (2001) where the phases of e-commerce HYROXWLRQDUHKLJKOLJKWHG7KH¿UVWSKDVHLQYROYHV SMEs having some sort of Web presence regard- OHVVZKHWKHUWKH\NQRZZKDWWKHEHQH¿WVDUH7KH study suggests that a majority of Nigerian SMEs are yet to get on this initial phase of e-business HYROXWLRQOHWDORQHH[SHULHQFLQJWKH¿QDOVWDJH of using online business to strategically increase SUR¿WVDQGFXVWRPHUYDOXH Regarding access to the Internet, about the same number of people in this survey responded to having Internet access, which is similar to the results in Duncombe and Heeks’ (1999) study. Fifty-seven percent of our responding SMEs have Internet access, of which e-mail is the commonest—slightly more than half of the respondents have/use e-mail. Approximately XVHWKHHPDLO³YHU\RIWHQ´DQGXVHLW ³RIWHQ´ $QG WKH UHVXOWV LQGLFDWH WKDW ,QWHUQHW access for SMEs in Nigeria seems to be from 1266 Factors Affecting E-Business Adoption by SMEs in Sub-Saharan Africa cyber cafés as in other SSA countries (Oyelaran- Oyeyinka & Adeyas, 2004; Mbarika et al., 2002). Mbarika, Kah, and Keita (2004) have discussed the diffusion of cyber cafés in SSA as the pos- sible signs of better tomorrow in opening Africa up to the rest of the world. The current situation of Internet access from cyber cafés in Nigeria is encouraging (Ajakaye & Kanu, 2004) following the liberalization policy in the telecommunication sector (Ajayi, 2003). Other sources through which the Internet could be accessed by Nigerian SMEs include own premises, which incidentally is found among medium-sized organizations, and as was mentioned above, among technological-related business. Public access is not common. Overall, about 30% of the respondents use the Internet to promote their services and product. A follow-on i n t e r v i e w r e v e a l e d t h a t a f e w o f t h e m o c c a s i o n a l l y communicate with suppliers especially partners (foreign) using e-mails; in addition to participating in online yellow pages registration and so on. A respondent working for an oil services company QRWHV ³:H XVH WKH ,QWHUQHW LQ FRPPXQLFDWLQJ with our local customers and overseas partners as well; if for example, we want to check out and order some products.” In general, the results in Table 3 show that those involved with small business in Nigeria search Web pages and conduct research (business-related or otherwise) more than any other activities. They also randomly search the Web for information, which has highest area of usage for the Internet by our respondents. This evidently is consistent with anecdotal evidence of what Nigerians do in the cyber cafés (Ajakaye & Kanu, 2004). Moderate usage is seen for activities relating to offering in- formation for customers, internal communication, contacting governmental agencies and receiving order from customers. The least areas of usage for the Internet by Nigerian SMEs concerns ac- tual e-commerce, e-banking and entertainment purposes. Oyelaran-Oyeyinka and Adeya (2004) had similar breakdowns in their study. 7DEOH7KHVSHFL¿FXVHRIWKH,QWHUQHWE\60(VLQ1LJHULD What does your business use the Internet for? Frequency Percent (%) Promotion of product and services 21 33.3 Searching for web pages 43 68.3 Randomly looking for information 58 92.1 Obtaining information from suppliers 28 44.4 Offering information to customers 16 25.4 Contacting governmental agencies 17 27 Internal communication 11 17.5 Receiving inquires/orders from customers 9 14.3 Research purposes 42 66.7 Entertainment 5 7.9 E-banking 3 4.8 Advertising 0 0 E-business / e-commerce 3 4.8 Others 24 38.1 1267 Factors Affecting E-Business Adoption by SMEs in Sub-Saharan Africa Furthermore, the respondents indicated the extent to which they believe the Internet could EHQH¿WWKHLUEXVLQHVVHV7KHLWHPVDUHDQFKRUHG on a Likert-type scale ranging from strongly agree (5) to strongly disagree (1). The result is shown in Table 4. )LUVWWKHEHQH¿WDVVRFLDWHGZLWKUHGXFLQJGLV- tance barrier and facilitating access to internation- al markets rates highest. Also, our respondents are of the view that the Internet would allow them to gather useful data, increase their productivity and sales in that order. Communicating with partners and suppliers rated well for our sampled SMEs. Lowering of their costs of acquiring new custom- ers and obtaining information from government VHHPWREHSHUFHLYHGDVDOHVVSRWHQWLDOEHQH¿WRI using the Internet by our sampled SMEs. In the same vein, the reasons for not using the Internet by SMEs in Nigeria that was rated by our UHVSRQGHQWVLQGLFDWHGWKDW³ODFNRI,7VNLOOVIRU e-commerce development” as the most crucial. This harks back to the general limitations for the region as deliberated in the IS literature by PDQ\VFKRODUVVHH,¿QHGR2GHGUDHWDO 1993; Ojo, 1996; Ojukwu & Georgiadou, 2004; Oyelaran-Oyeyinka & Lal, 2004; Woherem, 1996). The next factor in the relative ranking order LV³¿QDQFH´ZKLFK%HOLDPRXUQH/XW] contends as the major determinant of ICT diffu- sion in developing countries. The cost of buying computers and other ICT equipment is thus linked with this reason. One manager working for an Agric-based business made comments regarding FRVWVRISURFX UL QJ,&7H TXLSPHQWDVIRO ORZV³7R do buying and selling online, our company needs facilities [computers, telephones etc.]; we’re a small business, we can’t afford to invest such huge VXPVZKHQLQIDFWRXUEXVLQHVVFDQEHQH¿WIURP this spare cash.” In the same fashion, a majority of the feedback received indicate that computer [the Internet] usage in business is not a norm for businesses in the country—low critical mass. 6LPLODUO\ ³WHFKQLFDO FRPSOH[LW\ RI XVLQJ IT in business,” which plagues a majority of small business everywhere, also ranked highly as a hindrance, here. To illustrate this point, D IHHGEDFN IURP DQ ,7 FRQVXOWDQW UHDGV ³7KH IT market place in Nigeria is still growing; for example, we ourselves in this business are only beginning to build Web pages for ourselves and others, just imagine what can others [without the IT skills] do with the Internet … My inference 7DEOH7KHEHQH¿WVRIWKH,QWHUQHWIRUSMEs in Nigeria %HQH¿WV Min. Mean Standard deviation Max. Reduce barrier associated with distance 3 4.84 .41 5 Allow us to reach international markets 3 4.41 .75 5 Effective for our data collection effort 2 4.35 .70 5 Increase our productivity 1 4.25 .84 5 Communicate with partners / suppliers 1 4.24 .93 5 Increase our sales 3 4.00 .76 5 Engage in e-commerce / e-business 1 3.71 1.24 5 Increase our customers’ satisfaction 2 3.51 .84 5 Lower our cost of acquiring customers 1 3.49 .74 5 Obtain information from govt. and others 1 3.48 1.16 5 1268 Factors Affecting E-Business Adoption by SMEs in Sub-Saharan Africa of the effects arising from emerging technology and business models is that it may take time to consolidate as customer knowledge, IT support and infrastructure improve in Nigeria.” This re- mark underscores the limitations of technological environment in Nigeria. The cost of owning and subscribing to tele- phones lines in Nigeria rates highly as a reason for not having the Internet by Nigerian SMEs. In fact, SSA countries are among the most disadvantaged in the world on such indictors (Dutta et al., 2003; ITU, 2004). Further, the policy of the govern- ment on e-business being unclear also ranked moderately high. Other moderately ranking reasons include factors relating to energy supply, knowledge and awareness, suitability for business and security reasons. A respondent’s comments above expressed doubts as to how the Internet in KH UEX VLQHVVFRXOGEHRIDQ\VLJ Q L¿F DQF HDQ RWKH U manager/co-owner of a Business Center notes WKDW³,I\RX>RQH@GREXVLQHVVZLWKWKH,QWHUQHW would NEPA [National Electric Power Author- ity] understand and improve power supply?” She mentioned that due to the poor power supply, her business had to procure a generating plant to pro- vide electricity. Lastly, the slowness of the Internet DQGWKHGLI¿FXOW\ZLWKLWVXVHUDQNHGDPRQJVWWKH least reasons why Nigerian SMEs do not have the Internet in their business operations. In general, the study by Walczuch et al. (2000) with respect WREDUULHUVDQGEHQH¿WVRI,QWHUQHWFRPPHUFHIRU a developed nation—Holland—in the late 1990s is comparable with some of results in this study. See Table 5. This may suggest a commonality Table 5. Reasons for NOT having the Internet used by SMEs in Nigeria Likert scale ranging from strongly agree (5) to strongly disagree (1) Reasons for NOT having the Internet used in your business N Min Mean Std dev. Max Lack of IT skills for e-commerce development 63 2 4.84 .54 5 *HQHUDOODFNRI¿QDQFH 63 3 4.43 .78 5 Too expensive to buy computers 63 3 4.25 .74 5 Technical complexity of using IT in business 63 3 4.11 .79 5 Telephone costs is too high 63 3 4.10 .89 5 Internet subscription fee is too high 63 2 3.97 1.08 5 Not clear government policy and support 63 2 3.97 1.15 5 Poor energy (power) supply 63 2 3.87 1.11 5 Not many of many our customers use the Internet 63 1 3.60 1.01 5 Not suitable for our business 63 1 3.49 1.03 5 The Internet is not safe for our business 63 1 3.32 .76 5 'RHVQRWOHDGPRUHHI¿FLHQF\RUORZHUFRVWV 63 1 3.14 1.12 5 Lack of time 60 2 3.08 .79 5 The Internet is too slow 63 1 2.89 1.32 5 7KH,QWHUQHWLVWRRGLI¿FXOWWRXVH 63 1 2.75 1.29 5 Does not lead to more sales in our business 63 1 2.62 .73 5 Never thought about it 57 1 2.25 .93 5 1269 Factors Affecting E-Business Adoption by SMEs in Sub-Saharan Africa LQWKHSHUFHSWLRQRIWKHEDUULHUVDQGEHQH¿WVIRU SMEs with regard to Internet commerce for both developing and developed nations. DISCUSSIONS AND IMPLICATIONS So far, we have concentrated on bringing to the fore, the factors affecting the adoption of e-busi- ness by SMEs in Nigeria. To that end, we used the framework in Figure 1 to guide our discourse. This study seems to suggest that preparedness or readiness for e-business is low for SMEs in Nige- ria. The business culture of Nigerians may have an impact on e-business adoption and growth in the country. Notably, the desire to engage in face- to-face business dealings surpasses the intent to use ICT (telephone, facsimile, the Internet). This revelation may not be conducive to the emergence of e-business. Clearly, our responding SMEs seem to be cognizant of the fact that the Internet could facilitate the breaking down of barriers due to distance, and open the world beyond to them. This fact suggests that the external contextual factor such as the norms, traditions or culture should be looked into more closely if any e-business engage- ment is to be widely adopted by Nigerian SMEs. +RZHYHUWKLVVWXG\LVQRWVSHFL¿FDOO\GHVLJQHG WR¿QGRXWWKHPRVWVLJQL¿FDQWIDFWRUPLOLWDWLQJ against e-business adoption in Nigeria. None- theless, the viewpoints held by our respondents regarding business dealings seem to suggest that face-to-face encounters are widely preferred. Furthermore, with regard to the state of in- frastructural facilities such as power generation in Nigeria, it was seen that the prevailing condi- tion is far from being conducive or favorable to e-business diffusion and adoption; at least among SMEs. With respect to the organizational context factors, it was found that the sorts of skills and awareness required for e-business adoption and growth among Nigerian SMEs is lacking or not widely available. Though, such skills may be easily found in larger SMEs, usually with much more ¿QDQFLDOUHVRXUFHVDQGVRPHWLPHVLQWHFKQRORJL- cal-related industries; for instance, IT-related or oil services. Conversely, smaller businesses, say for example, family-owned or one-man business do not seem to have the knowledge or awareness or even the resources for engaging in e-business. The barriers to adopting e-business in Nigeria stem IURPIDFWRUVUHODWLQJWRJHQHUDOODFNRI¿QDQFH and the lack of expertise in developing e-business. Infrastructural facilities such as Internet access, telephone and computer costs ranked highly as hindrances to e-business adoption. More so, respondents commented as to the seriousness of these factors for e-business adoption or growth in the country. Also, not many of the SMEs in this survey have their own Web pages; perhaps as a direct consequence of the debilitating environment LQZKLFKWKH\¿QGWKHPVHOYHV The capability of the country in terms of techni- cal, infrastructural and educational or awareness endowments is low. Yet, there appears to be some willingness on the part of many a SME to have their own business Web pages. Our data show that some already have such facilities. Apparently, the ownership of Web pages is the starting point of e-business. The external environment in regard of the enabling infrastructure looks promising with ubiquitous cyber cafés in urban centers in Nige- ria (Ajakaye & Kanu, 2004). In addition, many SMEs in the country appear to have found good use for the Internet as they carry out information searching and research purposes through it. The question is: What can be done to further encour- age its use for e-business purposes in Nigeria? &OHDUO\IRU1LJHULDWKHEDUULHUVDQGEHQH¿WVRI the e-business adoption and growth appear to be closely related; the solution of the barriers could yield positive results in the other. Fortunately, the onus of promoting e-business adoption and growth may rest with the Nigerian government being the most powerful entity in the country. The socioeconomic and cultural underpinnings of the society may readily support the foregoing proposition (see Anandarajan et al. 1270 Factors Affecting E-Business Adoption by SMEs in Sub-Saharan Africa 2002; Ojo, 1996). Nevertheless, it is worthwhile to mention that the government has realized the import of e-business and regularly promotes e- business and e-awareness among SMEs in the country (Ajayi, 2003; NITDA, 2001). The political will to set the stage for e-business adoption and growth, we believe rests with the government in light of the progress seen in the ICT sector when the Nigerian government liberalized its telecoms sector. Enabling infrastructure for e-business must be in place so as to quicken the spread of e-busi- ness, which equivocally could help speed up the socioeconomic development of the country (and the region too). More importantly, the effort of the Nigerian government and other SSA governments should be aimed at vigorously sensitizing the populace towards accepting that the information economy is already here; namely, some old ways may have to be done with. Apart from making efforts to improve the infrastructural facilities required for e-business adoption among SMEs in Nigeria, another area that must not be neglected is the need for assimilating new culture towards business dealings. To that end, awareness cam- paigns and education may be required in helping to spread e-business in the country. This study has implications for both theory and practice. In terms of theory, this chapter has shown that some of the factors mentioned in IS literature regarding e-business adoption (or ICT use by SMEs) may in fact be applicable to SMEs in a less developed part of the world. For example, organizational size, resources, employees’ skills, (CEOs) leaders’ perceptions, infrastructural sup- port (see for example Chau & Tam, 1997; Iacovou et al., 1995; Poon & Strom, 1997; Scupola, 2003; Thong & Yap, 1995) are some of the factors that have been mentioned for SMEs in the developed countries that were also seen to impact the adoption of e-business (or ICT use) by SMEs in Nigeria. This contribution may be useful for the development of theories in e-business research relating to SMEs. Second, this study complements RUVXSSRUWV¿QGLQJVIURPFRPSDUDEOHVWXGLHVRQ ICT and SMEs in SSA. In particular, this present study highlights the import of norms, tradition in other studies in the region (Heeks & Duncombe, 2001; Okoli, 2003). Additionally, this article could entice other studies to further investigate the adop- tion and diff usion of e-business by SMEs in other parts of SSA, as the e-business hype develops. As such, this study could be used as a guideline for such further investigations. Regarding practice, policy makers in Nigeria and other nations in SSA could avail themselves of this study to focus their attention on key items that could be explored in order to engender e-business adoption and diffusion in the region. This chapter FOHDUO\LGHQWL¿HGWKHQHHGIRUFXOWXUDOFKDQJHLQ business dealings, awareness and education as well as the provision of relevant infrastructural DQG¿QDQFLDOVXSSRUWIRU60(V7KHVHDUHDUHDV where governments’ commitment and efforts F RX O GP D N HD G L I IH U H QF H 6 S HFL ¿ FD O O\ W KH 1L JH U L D Q government as well as others in SSA could use WKH¿QGLQJVLQWKLVVWXG\DVDEDVLVWRLQFUHDVH their awareness campaigns concerning e-busi- ness as an engine of socioeconomic development and sustainability (Castells, 1999; Oyebisi, 2001; 7UDYLFD$VZDVQRWHGDERYHHI¿FLHQW LQIUDVWUXFWXUDOIDFLOLWLHVDQGIXQGLQJ¿QDQFH could be catalytic in the process. The general lack of IT skills among SMEs can be attenuated through greater government participation. For instance, in Thailand the Ministry of Commerce ³DUUDQJHVIUHHKRPHSDJHZLWK85/HPDLODQG provides seminars and training programs for SMEs” (Lertwongsatien & Wongpinunwatana, 2003, p. 69). The Nigerian government could woo IT multinationals to help provide relevant expertise to SMEs as is the case in the Republic of South Africa (HP, 2002). CONCLUSION This chapter has attempted to discuss the factors affecting the adoption of e-business by SMEs in 1271 Factors Affecting E-Business Adoption by SMEs in Sub-Saharan Africa Nigeria. The choice of Nigeria is informed by its economic size relative to other countries in the SSA region and the position of SMEs within its economy. Essentially, this study represents an important step in understanding the factors affecting e-business adoption in one developing region of the world (i.e., SSA). This study is ex- ploratory in nature. Findings of the study indicate that e-business adoption may be hampered by the prevailing norms, traditions or culture that has preference for doing business, face-to-face. As such, the preparedness of Nigerian SMEs for e- business may not, at this point in time, be seen as high due to this external contextual factor. Other limiting barriers noted include general lack of ¿QDQFH,7VNLOOVDQGFULWLFDOPDVVIRUHEXVLQHVV engagements. Overall, the infrastructural support in Nigeria is not conducive for e-business, though there are improvements underway. Nevertheless, some SMEs possessing—skills and funds—and some other favorable resources have started e- business. In general, the lack of knowledge about HEXVLQHVVEHQH¿WVDQG¿QDQFHIXQGVDUHDPRQJ the contextual factors inhibiting e-business adop- t i on i n Nig e r i a . N ot w i t h s t a nd i n g , N ige r i a n SM E s seems to be aware that the Internet could help them reach the world beyond and act as a source of business and business information. There are practical and theoretical implica- tions for this study, which include the need to re-evaluate the commercial practices or values, if any meaningful e-business is to emerge in the country. Secondly, strong government policy and support may be required to provide the enabling environment for e-business. Such efforts may re- late to the provision of infrastructural for support e-business engagements. In general, this study also has implications for other SSA countries whose conditions are similar with those in Nigeria. Theo- retically, a suggestion that e-business adoption strongly hinge upon external, technological, and organizational contextual factors for all SMEs re- gardless of regions, may hold. Though the impacts of such may depend upon regional characteristics. 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