Small (African) Entrepreneurs Are Growing
Africa is a continent with a difficult history, a problematic and heterogeneous present, and a potentially bright -- but also risky -- future. This applies at almost any level: social, cultural, or economic. Nonetheless, it has 760 million reasons to hope, with 60% of its population under 24 years old.
Some African countries are politically stable, some dangerously volatile; many are rich in primary resources, while quite a few lack almost any; some are rather fertile, others are barren and quasi-desertified. Essentially all African countries, however, have a very young population and this is an enormously valuable asset if, as it indeed happens in some of the most dynamic countries (e.g. Nigeria, Kenya, Uganda, Ghana, or South Africa), there is a significant fraction of these young people who are reasonably well trained.
Things, however, are far from rosy for young Africans. They experience very high unemployment rates (12-14% in Sub-Saharian Africa), and many of them live well under the poverty line. Indeed, in the words of Tony Elemelu, a prominent Nigerian entrepreneur and philanthropist, ''youth unemployment is Africa's greatest challenge." But, on the other hand, as you often also hear among the typically optimist Africans, such large unemployment pushes many of them to become ''entrepreneurs" or, at least, to strive hard for it. Of course, not all, not even many, will have the rare combination of skills, creativity, and drive required to be a successful entrepreneur. However, such a large and motivated pool of aspiring entrepreneurs certainly harbors the potential, if properly supported, to have a strong economic impact on African development.
This potential, in fact, is not just an illusion, the result of some naïve and wishful thinking. A forceful indication of it is that such a high "supply" of yearning entrepreneurs is widely met by some equally strong ''demand," in the form of investors (venture capitalists, investment funds, and institutional or state-sponsored investors) looking for good investment opportunities. Pitching events, start-up weeks, accelerator and incubator programs abound throughout Africa – in Lagos, Nairobi, Cape Town, or Accra. Some are organized by locals, and mostly geared to locals. Others are aimed at attracting foreign investors, interested in funding African projects and African entrepreneurs. Let me just mention two forceful illustrations of this booming trend: First, according to the World Bank, the continent has become the second most attractive investment destination in the world, ranking just behind North America. Second, foreign direct investment hit in 2015 a record $60 billion, five times its 2000 level!
But, again, it is hardly the case that everything is rosy in this respect either. It is well understood, and feared, that such promising trends and huge potential are still based on fragile foundations. A primary source of concern is not so much economic but socio-political. In part as a consequence of colonial history, many African countries are not only ethnically diverse but riven by ethnic conflict. And without some political stability, entrepreneurship and economic development can hardly flourish. A related problem is of a somewhat paradoxical nature: in those African countries that are resource-rich (e.g. in oil or valuable raw materials), the threat of corruption and severe conflict (often inter-ethnic as well) is very high. All this, in turn, impairs substantially the ability of the state to provide the public goods (e.g. infrastructure) and services (e.g. education) that are key preconditions for successful entrepreneurship and development. Despite unquestionable advances in recent times, socio-political fragility remains one of the main problems threatening Africa's economic future.