Unlocking The Potential Of African Entrepreneurs
Entrepreneurship is a vital driver of economic growth and development, and this is especially true in Africa, where a thriving entrepreneurial sector can play a crucial role in lifting communities out of poverty and building a more prosperous future.
Recent research has shown that entrepreneurs in Africa are particularly well-positioned to make a positive impact on their communities and the broader economy. For example, a study by the African Development Bank found that young entrepreneurs in Africa are more likely to innovate and create new products and services, which can lead to increased productivity and job creation. Additionally, many young entrepreneurs in Africa are focused on addressing pressing social and environmental challenges, such as access to clean water and energy, which can have a significant impact on improving the lives of those in their communities.
One key way that entrepreneurs can contribute to building the African economy is by creating jobs and driving economic growth through the establishment of new businesses. According to data from the International Labour Organization (ILO), unemployment among youth in Africa is nearly twice as high as the overall unemployment rate. Young entrepreneurs can address this issue by starting businesses that provide employment opportunities for their peers. Furthermore, research from the African Development Bank shows that SMEs account for up to 90% of all formal jobs in some African countries, and they can act as a powerful engine for economic growth, poverty reduction and social inclusion.
However, starting and growing a business can be challenging, especially in a region with limited access to finance and other resources. This is why young entrepreneurs must have access to support and resources that can help them succeed by creating networks and platforms that connect entrepreneurs with resources and opportunities. In collaboration with the U. S. African Development Foundation (USADF), the Shared Value Africa Initiative (SVAI) aims to unlock opportunities and resources for Africa’s young entrepreneurs to thrive. USADF, an independent US government agency, aims to invest in and support African start-ups and enterprises to become sustainable entities contributing to the continent’s growth. This collaboration, made possible due to the strategic alignment of these organizations, will focus on capacity building for MSMEs operating on the continent and will be rolled out in phases later this year.
Access to resources and opportunities has also been one of the key drivers behind the creation of the African Entrepreneurship Forum, a peer-learning platform – for entrepreneurs by entrepreneurs – hosted quarterly by the SVAI features thought-provoking discussion, best-practice learnings and opportunities sharing to help empower the next generation of purpose-driven African leaders. The first forum of 2023, which takes place on 17 February, will bring together leaders from the SVAI network across Africa, who are initiating purpose and impact-driven work through their respective industries to actively contribute to building the African economy, while uplifting their own communities.
In addition to creating jobs and driving economic growth, entrepreneurs can also play a key role in promoting innovation and technological development in Africa. With the continent facing significant challenges in areas such as energy, agriculture, and healthcare, new technologies and innovative solutions are needed to address these issues. For instance, research by the African Innovation Foundation shows that the continent has the potential to become a global leader in the fields of mobile and ICT-based innovations, such as mobile money and mobile health, which is a promising area for young entrepreneurs to explore. By starting and scaling businesses that focus on developing and implementing these technologies, young entrepreneurs can help to drive innovation and improve the lives of people in their communities.
An important means of sustainably contributing to building the African economy is for entrepreneurs to focus on inclusive business models encapsulated in the Shared Value business framework. This means designing businesses that are not only profitable but also benefit marginalised communities and the environment. For example, a young entrepreneur may start a business that provides affordable access to clean water in rural areas, or a farm-to-market supply chain that helps smallholder farmers to access markets and increase their incomes. These types of businesses can have a positive impact on the economy by increasing productivity and income for people in the community, and also by addressing key social and environmental challenges.
Entrepreneurs can also contribute to building the African economy by fostering cross-border trade and investment. Africa has a wealth of natural resources, but many countries lack the infrastructure and institutions to harness these resources effectively. Entrepreneurs can bridge this gap by developing businesses that connect producers with markets and investors, both within Africa and internationally. This can help to create more efficient supply chains and increase the value of Africa’s natural resources.
More importantly, through the African Continental Free Trade Area (AfCFTA) entrepreneurs stand to benefit from increased market access and reduced trade barriers. This can include exporting their products to new markets within the AfCFTA, importing raw materials or equipment at lower tariffs, and forming partnerships or joint ventures with companies from other African countries. Additionally, entrepreneurs can also benefit from the AfCFTA’s goal to increase intra-Africa trade, which can help them to diversify their customer base and reduce their dependence on exports to non-African markets.
With this goal in mind, the SVAI, in partnership with the Pan African Chamber of Commerce (PACCI), is nurturing a trade community and building an enabling environment for SMEs and entrepreneurs to trade across borders. JamiiTrade, an online platform and mobile application to be launched in 2023, will gather knowledge and information on SMEs and their experiences, thus providing valuable data that can inform policy change, create new markets and provide new opportunities for African SMEs.
In addition to contributing to the African economy, entrepreneurs can also uplift their own communities by creating opportunities for education and skill development. Many young people in Africa face barriers to education and training, which can limit their ability to participate in the economy. Successful entrepreneurs can address this issue by providing training and education opportunities for other young people through their businesses, such as apprenticeships, internships or by providing scholarships.
The bottom-line? Entrepreneurs in Africa have the potential to play a significant role in building the African economy and uplifting their communities. Through their innovative ideas, hard work, and determination, they can create jobs, spur economic growth, and improve the standard of living for people in their communities. However, young entrepreneurs in Africa face numerous challenges, including limited access to funding, lack of mentorship, and inadequate infrastructure. To help empower the next generation of purpose-driven African leaders, we need to focus on providing the support and resources that young entrepreneurs need to succeed.