In their paper, Nwagbala et al. (2025) discuss the key challenges associated with implementing AI—six in total:
1. High Costs
The financial implications associated with adopting AI technologies can be discouraging for many SMEs operating on tight budgets. Research conducted by McKinsey & Company (2021) indicates that initial investments required for software licenses, hardware upgrades, and employee training can be prohibitively high. Many SMEs lack the capital to invest in these technologies if there are no quick returns. Businesses are discouraged from pursuing AI integration due to additional financial burdens caused by ongoing maintenance expenditures and consulting services. Financial constraints prevent many small and medium-sized businesses from investing in advanced technologies like AI systems.
2. Lack of Technical Skills and Expertise
Many SMEs lack the technical expertise necessary to develop or integrate AI systems effectively. This skills gap can lead to the underutilization of available technologies (Muller et al., 2023). A study conducted by the African Development Bank (AfDB, 2022) indicates that a significant portion of the workforce lacks basic digital literacy skills, let alone the advanced skills required for AI implementation. This skills gap creates a barrier not only for individual businesses but also for broader economic development, as it limits innovation and competitiveness within the market.
3. Lack of Awareness
A common problem faced by SMEs is a lack of knowledge about the tools and resources available to them, such as market trends, technology advancements, and financial aid. This knowledge gap can lead to missed opportunities and inefficient business practices.
4. Cultural Resistance to Change
Cultural resistance within organizations can impede the adoption of new technologies like AI. Employees may fear job displacement or feel overwhelmed by the complexity of new systems (Davenport & Ronanki, 2018).
5. Limited Access to Technology
Many SMEs operate in environments where internet connectivity is unreliable or nonexistent. According to a report by the International Telecommunication Union (ITU, 2021), only about 28% of individuals in Africa have access to the internet, which severely limits the ability of businesses to leverage AI tools that often require stable online connections. Furthermore, many SMEs are unable to invest in the necessary hardware or software due to financial constraints (World Bank, 2020).
6. Infrastructural Deficits
Infrastructural challenges significantly impact the ability of SMEs in Africa to adopt AI technologies successfully. Poor electricity supply remains a critical issue; frequent power outages disrupt business operations and hinder access to online resources necessary for effective AI implementation (United Nations Economic Commission for Africa (UNECA, 2021)). Furthermore, SMEs attempting to expand their businesses or incorporate cutting-edge technologies into their processes find their market reach and resource accessibility restricted by poor transportation networks. Adopting digital solutions required for successful AI integration is significantly hampered by inadequate technological infrastructure and poor internet access.
Which of these challenges do you identify with most?