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The Entrepreneurial Boom in Africa: How the Youth Are Impacting Business Today
By admin April 13, 2016

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Anzisha Prize

 

Entrepreneurship has always been argued to be one of the best options for developing countries to boost their development programs and to pursue higher growth and an easier path to an advanced economy. Anzisha Prize, which is sponsored by the MasterCard Foundation and African Leadership Academy, has been created to attract and motivate young entrepreneurs across Africa. The prize seeks to award young entrepreneurs who have developed and implemented innovative solutions to social challenges or started successful businesses.

 

The sponsors of the award have increased their support and plan to expand the available support over the next five-years to selected entrepreneurs under the age of twenty-two. Currently, twelve finalists of the prize share USD $7,500 each – as well as mentorship, training and travel opportunities offered by the African Leadership Academy.

 

Each year, Anzisha Prize publishes the ‘Youth Entrepreneurship Survey’, which focuses on five areas of operating a business, namely: growth, sales and marketing, human resources, funding and support. The 2016 report was based on emailed questionnaires answered by 101 young entrepreneurs across the continent within the age bracket of 15-25. The result of the survey shed some light on the issues, challenges and opportunities these young businessmen and women face in their start-ups.

 

Firstly, all participants reported have demonstrated “very positive” or “somewhat positive” outlook for their ventures and all are confident about the future. Secondly, the main impediment to growth and the biggest obstacle to expanding businesses is funding and financing, with 48 percent in agreement that finance presents the biggest bottleneck to success.

 

More importantly, the majority of business opportunities have been limited to the local economies. Only 14 percent of the respondents currently do businesses internationally. The most important medium of advertisement is word-of-mouth (83 percent), followed by Social Media ads (58 percent) and exhibitions/events (50 percent). Expensive media (TV, Radio and Outdoors) understandably have not been utilized due to higher costs. Finally, the majority of entrepreneurs (84 percent) have described the level of support for their businesses in the country as “poor”, “very poor”, or “fair”.

 

These entrepreneurs in the report have made three suggestions to tackle these long-standing roadblocks to success: proving quality education (32 percent), sound infrastructure (20 percent), and levying tax incentives (14 percent) to mobilize finance. It is also important to note that only 19 percent of the participants were female entrepreneurs.

 

When it comes to ‘motivation’, African young entrepreneurs show the same personality traits as other entrepreneurs around the world. They want to make a difference in the world (57 percent) or to leave a legacy (12 percent). Only 15 percent of them state that they have become entrepreneurs to “take advantage of an opportunity”.

 

It is understandable that investors should be careful when it comes to investing in startups and entrepreneurial projects. However, with billions of dollars spent in venture capital, some of which will not see a return at all, it is a good question to ask what has inhibited foreign capital to solve these young entrepreneurs’ funding problem. If the private capital cannot find its way to these emerging businesses, due to social, political or economic issues in those countries, is there any way for public funding capital such as western aid or UN financing to reach to these young entrepreneurs across Africa?

 

Whatever it may be, the youth in Africa are ready to do business.

 

For more information:

Anzisha Youth Entrepreneurship Survey 2016

Survey provides glimpse into the world of young entrepreneurs in Africa

How to foster entrepreneurship in Africa

Africa’s entrepreneurial dilemma


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