Entrepreneurship, particularly youth entrepreneurship, is what African economies need to expand and succeed. Studies have shown that it facilitates a country’s development through promoting capital formation and regional development, creating employment opportunities, and stimulating wealth creation and distribution.
The recently released Anzisha Youth Entrepreneurship Survey 2016 revealed the realities that young entrepreneurs face throughout the continent, showing all stakeholders – governments, financial institutions, private enterprises and individuals – what still needs to be done to uplift these businessmen and women, and, ultimately, our economies, particularly in four key areas:
We were encouraged to see that more than three quarters of the respondents (79%) are ‘very positive’ about the future, despite the fact that, as entrepreneurs in Africa, they face some of the world’s most challenging business conditions
Only 14% of respondents currently do business internationally. This indicates an untapped growth opportunity
Almost half of the respondents reported that access to funding was the biggest barrier to growth, with only 27% securing outside capital in the form of loans for their businesses
Family and friends are the most popular sources of capital (59%), followed by grants (52%) and then crowd-funding (22%)
In terms of support, only half of respondents said they were able to find a suitable business partner. 43% described the level of support in their home countries as ‘fair’, but 24% and 17% labelled it as ‘poor’ and ‘very poor’ respectively
When asked what their governments could do to better support small-business owners, 32% said that entrepreneurship should be taught in schools, 20% suggested infrastructure improvement, and 14% said they would like to see tax incentives for young entrepreneurs
We are serious about building entrepreneurial capabilities and growth in Africa, as it is a critical factor for long-term economic sustainability.
In 2015, the Bank’s Incubator was launched and provides entrepreneurs with practical support in the form of access to corporate networks, value chains, funding and mentoring. The incubator is currently based in South Africa, but has plans to be replicated in financial hubs across Africa. Overall, initiatives such as these serve to strengthen and promote economic and financial literacy, economic empowerment, and education and job creation in the long-term.