Promoting Entrepreneurship in Africa – Part 3

By Tope Toogun

Way forward?

Despite the plethora of programmes and initiatives to spur entrepreneurship, there is a lack of coordination at the policy level in most African countries, which limits the positive impact such interventions may otherwise have had. While one government agency may be responsible for promoting entrepreneurship, another agency of the same government rolls out miles and miles of red tape which hinders the same entrepreneur government mandated the first agency to support. Policies are drafted by government ministries without sufficient interaction and coordination with other ministries. Often, overlaps and inefficiency are the outcomes, leaving the entrepreneur stranded! Daniel Isenberg’s 2010 article on How to start an Entrepreneurial Revolution, published in the Harvard Business Review, gives us some clues on how to go about achieving this objective. First is to realize that there is no magic formula or prescription, only “practical, if imperfect, road maps”. Some of the recommendations include shaping the ecosystem around local conditions, engaging the private sector from the start, celebrating successes, favouring high potential businesses (as they have the capacity to create more jobs), reinforcing and building on existing clusters rather than attempting to create entirely new ones, tackling cultural change head-on and reforming legal and regulatory frameworks.

We need to develop an ecosystem which is supportive to entrepreneurship and which ensures that the policy dissonance we currently witness is corrected and we begin to harmonize different policies and programmes. India offers us a good example of how to go about this. Faced with the challenge of creating jobs for 500 million people over the next 10 years, the Government of India has created the Ministry of Skills Development and Entrepreneurship, which coordinates the government’s entire policy and programme interventions in the job creation space. It also recognizes the crucial handshake that exists between skills development and job creation, which we do not seem to have realized yet. More on this later.

Secondly, there are systemic challenges in African economies which substantially increases the barriers to entry or success in entrepreneurial ventures. Perhaps the biggest challenge here is the epileptic power supply in most of the countries in Africa. The heart-breaking occurrence of Africans risking their lives to cross the Sahel desert and Mediterranean Sea in search of options in Europe may not occur if we have stable electricity supply as there will be more economic opportunities in our economies. I wish we could make all public office holders in Africa learn to say the word Lampedusa every day. It is the name of an Italian town that is the first destination of our African migrants to Europe. Unfortunately, many have perished either during the dangerous trek through the Sahel or the equally dangerous sea crossing.

The second systemic challenge we have to deal with urgently is the mismatch between skills demand and supply in the economy. African economies recorded growth in spite of the financial crisis of 2007-2008, but the growth was “jobless”. In effect, we recorded an annual growth of between 3-7% growth in African economies but did not record a corresponding increase in new job opportunities. Our educational institutions are not producing the skills required in the market place. It is crucial that we start to identify future skill requirements and train manpower to fill the gaps. Consider this; why should we have 60% of the uncultivated arable land in the whole wide world and still be importing food when we should be producing for export? This distortion is due in part to the lack of skills in the economy to participate fully in the agricultural value chain, from the adoption of modern farming methods to agro processing.

Another skills development imperative is for us to prioritize entrepreneurship education. If we wait till tertiary education level, as most African governments appear to have done, it is probably too late by then. Ideally, this should be a no-brainer. If we realize as we do, that we need to promote a thriving culture of entrepreneurship to create job opportunities, we should give priority to entrepreneurship education. This is underscored by the established fact that the SME sector accounts for between 60-80% of total employment in the economy of most African countries. If that is where jobs will come from, surely we should do everything possible to promote entrepreneurship?  Therefore, we have to mainstream entrepreneurship into every level of education. While Africans do have an enterprising spirit, they also need support, coaching and training to spot opportunities, know how to convert those opportunities into business ventures and how to grow businesses. This is particularly crucial in today’s economy, where technology is disrupting existing business models and disintermediating many players in the twinkle of an eye.