AMISOM Public Information

Africa is home to more than 1 billion individuals. The figure might not sound surprising to you, but by the end of this century, the number of inhabitants in Africa is expected to increase by fourfold, and Africans will constitute about one-third of our global population. To accommodate the increasing population in Africa, international organizations and public institutions from developed countries alike have been devoting much of their effort and providing assistance to Africa through multiple means, mostly through financial aid packages. There is a striking difference when it comes to the approach from donors, however. Previously, the support from intergovernmental institutions was largely focused on providing money to the country of destination, whereas presently both public and private enterprises from Europe or America are increasingly involved in creating a sustainable development plan for Africa where improvements can be extended and maintained through many generations. With the young demographics in place (60% of the total population are below 30), there are multiple avenues that both local entrepreneurs and public institutions can take advantage upon to help to build Africa towards achieving their goal.

While many African administrations have not completely demonstrated their self-capability to move a country forward, the voice from the Western countries has been imminent enough to influence the decision-making progress by the African governments, especially in developmental issues. The conversation that is mainly debated by experts and policy-makers is how to allocate these funds for development projects efficiently. Thanks to the coordination programs from various NGOs that are supported by cross-country partnerships, the EU has mostly prioritized their resources, including both financial and human capital, to aid with models for entrepreneurship into myriads of African nations. However, others believe that only by resolving the immediate problem of food deficit, through advanced techniques for agricultural production, long-term progress for sustainability will be achieved.

The battle against hunger

Africa is not only tasked with agricultural self-sustainability but is also key in tackling the issue of global hunger. However, Africa currently has more than 65% unexploited arable land and ironically, many African countries are forced to import food from private entities from outside the continent, accumulating up to $35 billion a year. However, arable land is in short supply, as the effects of climate change quickly prompt land degradation. The lack of food supply is now recognized as a deep concern for government officials, as this could easily be leveraged as an advantage if all resources are effectively distributed. By the same token, for international organizations, investment into improving the efficiency of agricultural production seems to be a no-brainer. However, because African communities are sparsely distributed throughout the geography, especially in Central and Eastern Africa, agricultural investment will not be sustainable without complementary support from other areas. This is why the rise of local and regional entrepreneurship is extremely vital for the future of Africa.

The upsurge of entrepreneurship

Recent developments in Africa have allowed modern infrastructure, especially telecommunications and financial services, to prosper. Upgraded facilities across Africa definitely help entrepreneurship being cemented as the pioneering trend for ambitious youngsters. In some developed African economies, the young generation does not bear the mindset of the generation of their parents. They are not working simply to feed their family; but rather believing in themselves as employers or leaders of the future. Even more so, they want to inspire other people with their innovative ideas.

The first argument to be brought up in support for the expansion of entrepreneurship across Africa is that it is the foundation for the creation of jobs. With the alarming rate of unemployment in some rather developed economies in Africa, the role of startups in alleviating heightened job-seeking pressure is detrimental. As the number of newly-created enterprises increases, there present better opportunities for workers to have more diverse options; and vice versa, looking from the perspective of the employer, a higher chance of recruiting the right person. In South Africa, where the unemployment rate is currently capped at a staggering rate of 26.5 percent, the role of new businesses in resolving unemployment issues is extremely important. Furthermore, the existence of the growing informal sector in Africa (which constitutes as large as 60 percent in some African countries) also indirectly encourages the creation of such (informal) startups and hence more job opportunities.

The encouragement of entrepreneurship also provides positive economic benefits to the country. Again, the simple idea is that innovative ideas mostly stem from the demand of economic agents (or consumers) in the economy. As such, new businesses which are inspired from these ideas will have had their production aligned with the existing demand from the market. Ultimately, the interrelationship between increasing demand and supply would promote economic growth. The lack of sufficient resources (such as public infrastructure) in many African countries has allowed young entrepreneurs to exploit these opportunities and develope their own formula for success.

The creation of a single idea will inevitably stimulate other innovations to follow. The utilization of these ideas will effectively advocate further infrastructure development in business and technology that disseminates into other fields. For example, the modernization of education in some of the poorest countries in Africa has paid off well thanks to the use of advanced technology. In some countries, the adoption of modern facilities such as computers and medical equipment at the tertiary education level has enabled university students to gain valuable knowledge by keeping them posted with the latest technology. Even remarkably, some African students were even admitted into high-profile universities in the US or Europe immediately after their graduation in the university of their home country.

However, excessive risk is always embedded in the investment of any kind of entrepreneurship program, especially in Africa. The lack of entrepreneurial knowledge of the new generation of businessmen is making overseas funding both insecure and difficult. Education that is specialized for the entrepreneurial training is especially not adequate enough in the undeveloped and developing African communities, so entrepreneurs are actually less inclined to realize a profitable investing opportunity. Even if an opportunity is realized and sufficient funding is granted, usually entrepreneurs lack the experience of comprehensive business management so as to deal with daily operations. Countries with a weak institutional framework are partly to be blamed as well since they are more likely to be unfavorable of an open business environment, a factor if being left to the market mechanism, will explode way beyond their control.

Ready for the future

A business that reinforces its production lines on agriculture, or “agribusiness”, is now something that attracts many young entrepreneurs as the industry requires less technical knowledge (experience is rather believed to be the most important factor), and is en route to be a lucrative business if done correctly. The idea of incorporating the two issues together sounds fantastic, as it bridges the gap between a long-term objective with a short-term target.

The combination of both entrepreneurial knowledge and agricultural production is also commonly implemented across the continent of Africa, especially in Northern Africa and recently popularized in Sub-Saharan regions. Using search engines and inserting keywords such as “successful agribusiness in Africa”, the results may as well surprise you by how many success stories are listed on various websites. In Kenya, there are even some promotional websites that would specifically tell you in what agricultural business an individual should put their own investment into.
In hindsight, investing into entrepreneurship, especially in agriculture, will resolve food deficit problem and keeping a sustainable growth path of Africa towards the end of this century. Of course, the answer is not straightforward as it practically sounds in this article. Usually, international organizations have usually taken the one-size-fits-all approach to all of Africa and do not consider the differences in fundamentals (to name some notable differences, the distribution of capital and resources) between countries, which has led to some undesired outcome for some projects. For instance, if appropriate education is insufficient in some countries, then it is less likely for entrepreneurship to be important. Therefore, international organizations should prioritize to resolve the problem of food deficit firstly, then sequentially moving on to programs that would encourage the rise of entrepreneurship.