Why Entrepreneurship is Key to Africa’s Economic Growth

Africa is progressively making its impression as a continent for growth and opportunity.  African countries are understanding that entrepreneurship is crucial to reducing youth unemployment and getting young people involved in activities that support economic growth. Technology is a major platform in the disruption of the existing conditions, creating more variety and innovation in the workforce. Governments, philanthropists, and influential businesses are creating environments that enable entrepreneurship throughout the continent.

In order for entrepreneurship to have a substantial impact on Africa’s economy, governments must confront the challenges that negatively affect the countries progress. Some of these challenges include lack of funds, poor government policies, and the need for relevant mentorship.

The following actions need to occur for the successful growth of entrepreneurship, development, and economic transformation in Africa.

Helping shift the mindset of young people will enable them to consider themselves as entrepreneurs.

Including entrepreneurship in education is key to breeding success for Africa’s economic future. The skill set of the African labor force can improve by investing in fundamental education, business education, and relevant training. Ruhakana Rugunda, Prime Minister of Uganda said his “government’s efforts to promote entrepreneurial culture have produced remarkable results”. The education system was remodeled to include entrepreneurship as a subject in secondary schools and colleges.

Governments must develop enabling environments that support entrepreneurship thus creating jobs, opportunities, and substantial economic activity.

Uganda has contributed to creating an enabling environment through the state-run Youth Venture Capital Fund of Uganda that trains and provides money to young people with good business ideas. The government also helps young entrepreneurs to market their products. With the support of the World Bank and the U.K. Department for International Development, the Nigerian federal government created a national business planning competition in which aspiring and emerging entrepreneurs compete for grants of up to 10 million naira ($50,000) to start or expand a business.

Governments and economic communities should create agreements and strategies that are designed to improve the regulations for business and the promotion of competition.

This will support ongoing initiatives to close Africa’s infrastructure investment gaps. The Tony Elumelu Entrepreneurship Program is the largest African philanthropic initiative dedicated to entrepreneurship and aims to grow over 10,000 startups and youth-owned businesses from across Africa over the next 10 years, in turn creating 1,000,000 new jobs and generating $10 billion in new annual revenue across the continent.

African countries should make investments in dynamic and innovative sectors.

Investing in dynamic and innovative sectors will equip African countries with effective means to advance structurally and technologically. Their purpose should be to expand towards a mix of growing industries. Four key trends in technology are transforming the workforce in Africa: cloud, mobile, big data, and social. The Chairman of IBM Africa, Gary Cohen, suggests, “These disruptive technology trends are enabling the kind of change that many would have thought impossible ten years ago, yet today, they are combining to positively impact the lives of Africans both socially and commercially. This transformation isn’t being led by the traditional industry players – the telecoms, the banks, the retailers.”

Look for external support, especially African diaspora

The emerging economies and the African diaspora can aid in Africa’s economic transformation by providing sources of investment, transferring knowledge and skills, and creating opportunities for Africa’s integration into the global economy. There are already several ways that African diaspora are contributing, both in the continent and abroad.

Grant Erhuanga, the CEO of Innovazing—who is originally from Nigeria and currently resides in the United States—was recently invited as a Keynote Speaker to a leadership conference at Cyprus International University, organized by PATRAL Links and Bridges, with hundreds of international student attendees from all over Africa.

Samantha and Natalie Mwedekeli from the United Kingdom, who are of Kenyan and Nigerian descent, have become known as major food influencers and role models for aspiring young entrepreneurs in Kenya after studying local millennials’ consumption habits and starting a gourmet burger joint in Nairobi, called Mama Rocks.

In conclusion, the growth of entrepreneurship—when done right—helps create jobs, promotes innovation and creativity, and helps promote income-generating activities for youth, and improves the overall quality of life across the continent. Governments across Africa should therefore be strategic about policies encouraging entrepreneurship by including it within the education system and teaching it as a lifestyle. Entrepreneurs should be celebrated and provided with incentives to enhance the natural gravitation towards venturing.

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