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The entrepreneurial flame is burning bright in Africa. In October, Accra, Ghana played host to the Third Annual African Leadership Network’s(ALN) entrepreneurship in Africa Summit, bringing together hundreds of business people from across Africa and the world to interact, share, listen and take action.
Opening a window to the reality of doing business in Africa, entrepreneurs at the summit were presented with the initial findings of a survey conducted by the Monitor Group consulting firm in six African countries, showing entrepreneurship success was possible despite a raft of challenges
Omidyar Network, a philanthropic investment firm that sponsored the survey in collaboration with ALN, Africa’s premier network of young, dynamic, and influential new leaders on the continent, said the countries taking part in the survey, titled “Accelerating entrepreneurship in Africa,” were Kenya, Tanzania, ethiopia, Nigeria, Ghana and South Africa.
Malik Fal, a Managing editor for Omidyar Network Africa, told ChinAfrica that the challenge facing the next generation of entrepreneurs is to create prosperity against all odds.
He said the survey showed that African entrepreneurs are succeeding despite not being politically connected, demonstrating a changing mindset toward prosperity. The shift from being entrepreneurs of necessity, working for themselves because they cannot find formal employment, is being made by young people aspiring to go into business for themselves, with 57 percent of those surveyed seeing entrepreneurship as a viable career choice. This could ultimately translate into high-impact entrepreneurs, meaning those who create jobs.
Government leaders in Africa are failing to build national identities, instead promoting allegiances to tribes and ethnic groups, said Fal. Borders, national anthems and national flags are no longer enough to inspire young people, who now clearly want jobs and opportunities. And armed with technology and an aspiration for Western standards, youth today is pushing governments to move faster and develop private sectors.
Fal said the big question is how Africa can get its entrepreneurs to ultimately create jobs, gen- erate wealth, expand the tax base and make a social impact.
While the will to succeed among those surveyed is alive and bristling, a lack of access to financing, inadequate infrastructure (most notably electricity), insufficient skills training, limited affordable and accessible business support services and burdensome administrative policies were among the obstacles included in the survey findings that held back high-impact entrepreneurship.
Sixty percent of respondents said the cost of capital hinders company formation and growth; only 23 percent believe they can afford the costs associated with using existing infrastructure; 59 percent said colleges and universities do not devote enough time to teaching entrepreneurship; and 55 percent feel that there aren’t sufficient business support services available for new and growing firms.
But Paul harris, former CeO of First Rand Bank in South Africa, said he doesn’t know of a single bank that doesn’t want to lend money.“The thing is they want it back,” he said.Harris said banks are looking for good business ideas but entrepreneurs need to up their skill levels to be more attractive to lenders and investors. An entrepreneur needs to know something about everything and everything about something, quipped harris.
Red tape in starting businesses is another major hurdle. Sixty-two percent responded that they know entrepreneurs who have admitted to circumventing administrative burdens that discourage formalizing a business. These include: paying taxes, obtaining licenses and hiring employees informally.
“Despite facing significant challenges and obstacles, the African entrepreneur is resilient and optimistic. To maximize the contribution that entrepreneurs can make to the continent, it is critical that policymakers craft policies that are suitable for their national or regional context,” said Tebogo Skwambane, managing partner of the Monitor Group Johannesburg.
She said this requires not only better understanding the strengths and weaknesses of the entrepreneurial ecosystems in Africa, which the survey set out to do, but alsomore focused, tailored and locally meaningful strategy formulation by policymakers on a continent with an average income 5 times lower than the world average.
Fal concurs. “Our success begins with understanding the needs of the entrepreneurs, the landscape in which they operate and the barriers that need to be removed to create vibrant businesses,” he said.
He added that at the entrepreneurship in Africa Summit, research sparked critical conversations and healthy debate among many of the participants who could help remove these barriers, such as early-stage investors like Omidyar Network, business and government leaders, and entrepreneurs themselves.
The entire survey results and data will be available on the Monitor Group and Omidyar Network websites in the near future, and will prove useful for all African entrepreneurs to digest and disseminate. A white paper detailing the discussions and recommendations coming out of the entrepreneurship in Africa Summit will be published in March 2013.
An African proverb says, “It is a small group of men who go out to track and hunt the elephant, but it is the whole village that feasts on the proceeds.” Modern day hunters are now entrepreneurs, who aspire to solve social problems while becoming profitable and creating jobs. Ultimately this will help lift Africa out of poverty.
Opening a window to the reality of doing business in Africa, entrepreneurs at the summit were presented with the initial findings of a survey conducted by the Monitor Group consulting firm in six African countries, showing entrepreneurship success was possible despite a raft of challenges
Omidyar Network, a philanthropic investment firm that sponsored the survey in collaboration with ALN, Africa’s premier network of young, dynamic, and influential new leaders on the continent, said the countries taking part in the survey, titled “Accelerating entrepreneurship in Africa,” were Kenya, Tanzania, ethiopia, Nigeria, Ghana and South Africa.
Malik Fal, a Managing editor for Omidyar Network Africa, told ChinAfrica that the challenge facing the next generation of entrepreneurs is to create prosperity against all odds.
He said the survey showed that African entrepreneurs are succeeding despite not being politically connected, demonstrating a changing mindset toward prosperity. The shift from being entrepreneurs of necessity, working for themselves because they cannot find formal employment, is being made by young people aspiring to go into business for themselves, with 57 percent of those surveyed seeing entrepreneurship as a viable career choice. This could ultimately translate into high-impact entrepreneurs, meaning those who create jobs.
Government leaders in Africa are failing to build national identities, instead promoting allegiances to tribes and ethnic groups, said Fal. Borders, national anthems and national flags are no longer enough to inspire young people, who now clearly want jobs and opportunities. And armed with technology and an aspiration for Western standards, youth today is pushing governments to move faster and develop private sectors.
Fal said the big question is how Africa can get its entrepreneurs to ultimately create jobs, gen- erate wealth, expand the tax base and make a social impact.
While the will to succeed among those surveyed is alive and bristling, a lack of access to financing, inadequate infrastructure (most notably electricity), insufficient skills training, limited affordable and accessible business support services and burdensome administrative policies were among the obstacles included in the survey findings that held back high-impact entrepreneurship.
Sixty percent of respondents said the cost of capital hinders company formation and growth; only 23 percent believe they can afford the costs associated with using existing infrastructure; 59 percent said colleges and universities do not devote enough time to teaching entrepreneurship; and 55 percent feel that there aren’t sufficient business support services available for new and growing firms.
But Paul harris, former CeO of First Rand Bank in South Africa, said he doesn’t know of a single bank that doesn’t want to lend money.“The thing is they want it back,” he said.Harris said banks are looking for good business ideas but entrepreneurs need to up their skill levels to be more attractive to lenders and investors. An entrepreneur needs to know something about everything and everything about something, quipped harris.
Red tape in starting businesses is another major hurdle. Sixty-two percent responded that they know entrepreneurs who have admitted to circumventing administrative burdens that discourage formalizing a business. These include: paying taxes, obtaining licenses and hiring employees informally.
“Despite facing significant challenges and obstacles, the African entrepreneur is resilient and optimistic. To maximize the contribution that entrepreneurs can make to the continent, it is critical that policymakers craft policies that are suitable for their national or regional context,” said Tebogo Skwambane, managing partner of the Monitor Group Johannesburg.
She said this requires not only better understanding the strengths and weaknesses of the entrepreneurial ecosystems in Africa, which the survey set out to do, but alsomore focused, tailored and locally meaningful strategy formulation by policymakers on a continent with an average income 5 times lower than the world average.
Fal concurs. “Our success begins with understanding the needs of the entrepreneurs, the landscape in which they operate and the barriers that need to be removed to create vibrant businesses,” he said.
He added that at the entrepreneurship in Africa Summit, research sparked critical conversations and healthy debate among many of the participants who could help remove these barriers, such as early-stage investors like Omidyar Network, business and government leaders, and entrepreneurs themselves.
The entire survey results and data will be available on the Monitor Group and Omidyar Network websites in the near future, and will prove useful for all African entrepreneurs to digest and disseminate. A white paper detailing the discussions and recommendations coming out of the entrepreneurship in Africa Summit will be published in March 2013.
An African proverb says, “It is a small group of men who go out to track and hunt the elephant, but it is the whole village that feasts on the proceeds.” Modern day hunters are now entrepreneurs, who aspire to solve social problems while becoming profitable and creating jobs. Ultimately this will help lift Africa out of poverty.