Start-ups and SMEs will be the key engines for growth in Africa. But issues such as lack of access to finance will need to be addressed.
When entrepreneurship is evoked, one could easily get visions of successful businessmen or businesswomen who get paid big bucks for basically just showing up and managing the work being done by their employees. Behind this cliché however lie weeks of hard work, planning and strategy. Entrepreneurship could be described as the word of the century: it has never been more ‘in’ to become an entrepreneur. Africa is awakening to its potential and entrepreneurs – budding or experienced –, are becoming more and more conscious to this fact as well.
The art of positioning businesses as a viable brand often come across one major obstacle, which is lack of funding. It is in that respect that the Tony Elumelu Foundation has introduced a $100 million flagship yearly 12-week entrepreneurship programme to equip start-ups with the basic skills required to launch and run their businesses. In 2016, around 1,000 entrepreneurs from all over the African continent, including three Mauritians, were selected and received a seed capital of $5,000 each.
Egyptian entrepreneur Amr Medhat, CEO of Apple-Localisation, who launched his business in 2015 and who is one of the beneficiaries of the TEF programme, states that the idea with this additional funding is to have a minimum of two offices up and running in the US and the UK within two years’ time. Apple-Localisation provides translation and localisation services which entail helping companies adapt their mobile software to the local markets they want to penetrate. For example, the company handles languages such as French, Turkish or Swahili – languages being offered by very few companies in the world in their smartphone options. It is to be noted that Africa’s mobile phone penetration has now reached 67% of its population, which is estimated to 1.13 billion. Besides, about 26.5 percent of the population is on the Internet, with 50.3 million on Facebook. The company is now targeting to go global in order to bring the ease of technology closer to people.
A dose of craziness needed
In certain cases, it is not enough to have a vision to create a viable business. A dose of craziness is perhaps needed, as stated by Iselle Akwoue, CEO of A.K Consultants and mentor of the TEF programme. The latter left the comfort of a well-paid job in an oil and gas company to decide to become an entrepreneur. Her source of motivation was the fact that many small and medium enterprises (SMEs) in her home country Gabon were owned by women who did not have the opportunity to receive contracts and money. Iselle Akwoue thus left her job and opened her own business as a consultant for SMEs. She now provides them with training, commercial support, knowledge on how to negotiate contracts, answer tender invitations and translate their potential into businesses that benefit the community.
The private sector, in her opinion, is the key for Africa to emerge as a nation economically speaking and for bringing solutions to social issues. One cannot expect government to do it for us – their role stops at providing the enabling environment, she says. “For example, they have to provide water and electricity but we don’t have to rely on them for the economy. If you have a mango tree, plant some more, don’t just sell the mangoes, make some jam with it which you can sell them in supermarkets and generate income from it,” she highlights.
By providing jobs inside African communities, markets can be developed for exportation to other African countries as well. Africa represents 1 billion people expecting value-added products while the talk is all about exporting to far off markets such as the US, she adds.
Other issues crop up as well, particularly related to the formalisation of the entrepreneurs in Gabon. The issue is not so much about becoming an entrepreneur but rather about staying in the informal sector, hindering the process of registration and taxation. “The initiatives are there but a lot is to be done still,” observes Iselle Akwoue.
A similar situation has been detected in Burundi, where the unfavourable economic and political climate is a roadblock to entrepreneurship. According to Aimee Ishimwe, CEO of Ish’tri Company, access to funds is the major issue in Burundi. “Funding is a problem because of the political and economic crisis several African countries are facing. Entrepreneurs are however emerging out of it,” she states.
Innovation and sustainability are important models for her. It is in that spirit that her company aims to recycle organic waste into compost. The modus operandi comprises the distribution of dustbins to households in Burundi and sensitising the population on garbage sorting. It is one of the reasons there is the word ‘Tri’ (French for sorting) in the company name.
The company is in the process of acquisition of a garbage mill machine that will revolutionise the process of composting. Indeed, the organic waste collected from the households will be processed in that particular machine in order to obtain compost within 24 hours instead of the 3 months it would take by traditional methods. “The Burundian population relies heavily on agriculture. Speeding this process implies speeding the development of the country. The compost obtained is also low cost compared to the ones currently available on the market,” Aimee Ishimwe adds.
Globally, 600 million jobs are needed in the next 15 years to absorb a growing global workforce. Most formal jobs in emerging markets are with small and medium enterprises (SMEs), which also create 4 out of 5 new positions. Yet more than 50% of SMEs lack access to finance, which hinders their growth.