|Malik Fal Omidyar|
Why Entrepreneurship is Important
As a philanthropic investment firm, we are dedicated to harnessing the power of markets to create opportunity for people to improve their lives. We believe strongly in the power of entrepreneurship, to transform Africa; hence we invest in and help scale innovative organisations to catalyse economic and social change.
The Accelerating Entrepreneurship in Africa Initiative
We needed to better understand the state of entrepreneurship in Africa. In executing the multi-phase research project, we partnered the Monitor Group, a global consulting firm, and together we set out to identify the challenges facing African entrepreneurs and pinpoint the most trenchant barriers that inhibit high-impact entrepreneurship.
The first phase of the initiative commenced with a survey of 582 entrepreneurs in six sub-Saharan African countries: Ethiopia, Ghana, Kenya, Nigeria, South Africa and Tanzania. That survey, in turn, was augmented by 72 in-depth interviews and then benchmarked against 19 global peers. The second phase of the initiative brought together business and thought leaders to analyse the survey findings.
The sessions which held in October at the inaugural Entrepreneurship in Africa Summit in Accra, Ghana, drew more than 300 relevant leaders from both private and public sectors to participate in a solutions-driven dialogue on fostering high-impact entrepreneurship across the continent. We are happy to report that a culture of entrepreneurship is growing in sub-Saharan Africa, with indicators related to entrepreneurial motivations at least on par with or higher than global peers.
Entrepreneurship on the Rise
I think there have been success stories of companies and individuals. Take for instance, Mo Ibrahim, Aliko Dangote. The names are beginning to emerge. And we see the power; with more people keying into the role entrepreneurship can play.
Before now, aspirations around Africa are more often than not, to become a minister or governor; now that seems to be changing, with people now leaving government offices to start business; the mentality is changing. Finally, there have been changes in the world of jobs, with restructuring happening in the market. Young people are choosing their career paths, preferring to secure their own income, and not waiting for anyone to offer them jobs.
Entrepreneurship and Africa’s Wealth Creation
Despite the positive economic news and encouraging trends that have emerged from Africa over the past decade, the troubling reality remains that the everyday livelihoods of Africans have not kept pace with macro-economic growth, and per capital GDP levels on the continent persistently lag behind the rest of the world.
Entrepreneurship is the path where transformations at the grassroots happen. I cannot tell you now who the next 10 big African entrepreneurs are, but what we can do is to create an environment where entrepreneurs are encouraged and celebrated. The ecosystem has to be improved for entrepreneurship to blossom, so that more and more entrepreneurs can come on board.
Entrepreneurship does not occur in vacuum, there must be a systematic plan to support entrepreneurs. Vibrant entrepreneurship requires a well-functioning four-part ecosystem. The first one is entrepreneurial assets, financing skills and infrastructure. Infrastructure and financing are issues in Nigeria. The second one is to support organisations, the third component is the mindset; and how do people view entrepreneurship.
We have certain societies in Africa where the mindset is that entrepreneurs are shady characters, with people preferring pay employment after schooling. In Nigeria, for example, the mindset is much different, as most people are entrepreneurial. Entrepreneurship is a critical engine in developing Africa.
Checking Global Unemployment
Government cannot create jobs; it should make most of its money from taxes, as we have seen in Africa. Large companies are not in the business of hiring thousands and thousands of people, these days. The source of job creation worldwide is always entrepreneurs, with the greatest source of jobs coming from SMEs, which is why entrepreneurship is very important.
Nigerian Entrepreneurship and Funding Challenge
The first thing to understand is that the banks should not be the main source of funding for early stage companies. Never in the world has that been the case, because the banks are too risky for them, to provide capital for this group of people. Angel investors and venture capitalists would be appropriate for businesses at conceptual stage. Entrepreneurs ought to be educated about possible sources of funding outside banking systems.
Future of Entrepreneurship in Africa
The future of entrepreneurship in Africa is promising, if the right choice(s) are made now. The business landscape in sub-Saharan Africa provides a number of challenges, the greatest challenge facing entrepreneurs are financing, skills and talent, infrastructure, which prospective entrepreneurs must transcend.