How data gaps affect local businesses in Africa

Kemdi Ebi
CEO and Founder

March 27, 2023

In our previous article, we talked about the effects of data gaps on global businesses in Africa. This time, we want to focus on local businesses and how they are affected by these data gaps.

Starting up a business in Africa has its challenges; from logistics, to power supply, to finding skilled labour and much more. ‘Data Gap’ is one of such challenges and it affects local businesses more than we know; the availability of relevant and good quality data can literally make or break a business.

Increased Marketing Costs

One of the major effects of data gap on local businesses is increase in marketing costs.

Not having good quality and relevant customer and demographic data can force businesses to market without proper targeting, thereby, wasting money, time and resources.

A good example is, a Nigerian dating site that was built to bring single Nigerians together. In an interview with Tech Moran, Jimi Akinleye, the founder of explained that one of the many reasons for the downfall of the social network was the high cost of customer acquisition. The idea was no doubt a brilliant one, but they weren’t able to market to right crowd due to lack of data.

Reduced Revenue

The 2017 global data management benchmark report revealed that 61% of business organizations used data to increase their revenue. The unavailability of good quality data forces many local businesses to ‘fly blind’ and depend on pure intuition to make certain business decisions like type of product, price of product and so on. These kinds of decisions can reduce sales and revenue greatly.

A candid reference can be made to the extinction of the GoMyWay ride-sharing platform; an app which came to a dissolution because enough data was not acquired to help promote usage continuity by its customers. They were unable to use good data to channel their target audience and properly track the ride-sharing activities of their users.

As a result of this, users were at liberty to enter into contracts off of the ones provided by the GoMyWay franchise. An accumulation of these activities equalled low revenue for the franchise and of course, dissolution.

Increased Business Risk

52% of organizations say that they rely on gut feelings to make important business decisions. This goes to say that when business decisions are made solely by guess work, the business is exposed to a lot of risk. In fact, making important managerial decisions without data has been proven to be one of the major reasons corporate entities shut down their operations.

The same can be said about Air Nigeria airlines, who was recently taken over by the Assets Management Corporation of Nigeria.

One of the major reasons for the decline of the airline was constant exposure to business risks that could have ordinarily been avoided if proper data acquisition models had been put in place. Access to good data ultimately reduces the chances of companies embarking upon fruitless journeys because decisions would be made based on expertise information knowledge, and not instinct, probability or chance.

Reduced Business Opportunities

There are numerous economic factors that affect the rate of business opportunities. However, this can be mitigated where there is good data available. A company can use data to manipulate the negative economic factors by strategically applying themselves in ways which they can keep generating revenue to stay afloat even when the economic factors are not favorable.

The absence of good quality data – complete, accurate and timely data –  affects the rate of business exposure and opportunities negatively. Data gap creates a ripple effect in which uncertainty of data available or lack of data needed, may factor in restricting the proper applications of businesses into ventures and opportunities that will boost their general revenue and growth.


We can agree that not only do we need to solve the problem of data gap, we also need to ensure that we work with models that provide us with good quality data. Good quality data is data that is complete, consistent, accurate, valid and timely.

It is the best effective way of driving business success as opposed to relying on instincts and intuition to make business decisions.

Before any business starts to operate, it must make sure that there is an existing market demand for its services. Doing this means using making sure there is a market demand for your product through the proper analysis of customer and demographic data.

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