The African continent is slowly gaining a global presence in the startup ecosystem due to the skilled and ambitious entrepreneurs they nurture. According to the African Economic Outlook Report, 22% of the continent’s working-age population start their own businesses. Additionally, over 80% of Africans consider entrepreneurship a viable career option.
Africa ranked on top at the entrepreneurship chart released by a UK-based networking group in 2015. In fact, according to the Entrepreneurship Around The World report Uganda, Cameroon, Angola, and Botswana are placed among the top ten on entrepreneurship list.
So, what is the driving force behind this?
The Currency Control Regime and Government Initiatives
According to a study conducted by the Brookings Institution in 2013, African youth of the age group 15 to 24 years constitutes around 37% of the working age population. However, the majority of this sector are unemployed.
Thus in 2016, the Nigerian central bank began a currency control regime. This posed certain problems to business owners who otherwise used to import raw materials.
As access to the foreign exchange market was denied, people now had to come up with new ideas to keep their businesses going. One such idea was to produce the raw materials locally.
When the recession hit the markets, the government focused their efforts on local technological solutions to ensure that foreign entities don’t take over the African market. This initiative enabled local businesses to grow.
The Road Ahead
“We must move away from necessity-based entrepreneurship to opportunity-based entrepreneurship,” said Angela Lusigi urging the citizens to take initiatives during a report launch.
Since 2017, over 26 countries in Africa have come up with an industrialization strategy. On the other hand, in 2016 the reliance of local funding from private as well as state sector increased by almost 60% of growth.
Africa boasts quite a significant number of entrepreneurs. Even though the participation is high, the outcome or the benefits that they gain is comparatively lesser than the other continents. This calls for the need to implement more policies that ensure long-term success and growth of these ventures.
For entrepreneurship to have an impact on Africa’s economy, the government will have to take initiatives to help local businesses overcome the barriers to market such as lack of funds and infrastructure.