A look around the African continent reveals a growing rate of entrepreneurship. More and more people are beginning to take things into their own hands by setting up companies to solve local and international problems.
People have found more innovative ways of doing things and this has led to the reinvention of domestic and international industries but when did the wind of entrepreneurship begin to blow across the continent? The establishment of businesses to solve local problems is not novel in Africa. However, it is important to note that the collapse of the commodity boom; arising from the credit crunch and also the great recession of the late 2000s played significant roles in Africa’s rise to entrepreneurship over the last decade. Many highly skilled African professionals domiciled in America and Europe returned home after losing jobs.
There were amongst individuals who had gathered very rich technical and managerial experience and also had international networks and connections… These professionals went on to establish their own businesses or to partner with local compatriots due to the lack of jobs but what has been the impact of these businesses? What does the future hold for them?
The culture of the African people towards entrepreneurship, the socio-political environment prevalent in a country and availability of opportunities will be the key to the emergence, growth, survival and success of entrepreneurs.
What is the Ghanaian culture with regards to entrepreneurship? How do people react to the thought of risk taking? A few years ago, a Nigerian friend bemoaned the average Ghanaian’s fear to take risks. He made a quick reference to his native Nigeria; where they are considered a risk loving people in general and linked that to the existence of many local industries in that country. However, risk taking isn’t the only trait a successful entrepreneur should possess. You need passion, determination, discipline and confidence.
Educational systems in Africa should be designed to imbibe the entrepreneurial culture among pupils and students. The existence of a conducive working environment for start ups is very vital for success. Governments should lead the Legal environment which relates to the ease of registering a business and getting it running is sole responsibility of governments. Also, a supportive financial environment which is considered the back bone for many start ups can be enhanced by government. Through prudent monetary policy, cheap credit is made available for start ups to take advantage of, in their growth and competition with foreign companies. The old practice where foreign firms merely set up offices in Africa without research centres and tailor made products and services is being challenged by African entrepreneurs. Indeed there have been instances where foreign multinational companies have folded up in certain African countries for various reasons.
Governments should be as involved with the growth of local startups not only to a level where they substitute the nation’s imports but also to fully exploit their exportation prospects. Following the great recession and collapse of the commodity boom, governments across Africa have weakened over the years. Governments now focus on taxing local businesses for revenue.
Some governments have ceased international training and importation of certain products. African entrepreneurs must be quick in identifying opportunities where they can solve the many problems of the people. In these times when governments and its people are in search for home grown solutions, the African entrepreneur has a ready market to tap into.
With a population of 1.2 billion on the continent, coupled with scarcity in foreign exchange, opportunities abound for local businesses. Commodities like cocoa, gold and oil may be reducing on the continent, but the rise of knowledge among its people, offers hope that Africa will be a powerhouse.
Written by: Nathaniel Yeboah