According to the African Economic Outlook report, Africa has the youngest population in the world, with an estimated 200 million people between the ages of 15 and 24. However, despite a faster economic growth over the past decade, many young people still struggle to find employment opportunities within the continent and unless these young people can find meaningful work, the demographic dividend can easily turn into mass frustration and unrest. In light of this revelation, entrepreneurship has been identified as an important vice in creating jobs across the continent.
Most young people are tired of working for others or having to wait for the government to provide more jobs opportunities but, entrepreneurship provides a method for young Africans to embark on building the businesses of their dreams. However, being an entrepreneur in Africa comes with several challenges and the poor access to finance is the biggest challenge.
A survey which took a glimpse into the world of African Entrepreneurs dubbed the ‘Anzisha Youth Entrepreneurship Survey 2016’ has shone a light on this predicament. The survey was conducted through a collaboration between the African Leadership Academy and MasterCard Foundation, analysing 101 respondents across the continent. The report revealed that poor access to finance is the main barrier to growth of businesses in the continent, with 48 percent of respondents highlighting it as the biggest obstacle to expanding their companies. Also, out of the 101 respondents surveyed, only 27 percent received any form of outside investment from companies or the government, while 59 percent received capital from family members and 52 received investment capital as a result of grant schemes, causing these factors to be the major sources of accessible funding. Despite these challenges, 84 of entrepreneurs surveyed reported employing others, underscoring the employment creation potential of these businesses. However, a large proportion of respondents, about 41 percent, described the level of support available to enable young entrepreneurs in their countries as “poor” and “very poor.” This suggests that significant work has to be done in order to make it easier for young people to succeed.
Here is a glimpse into the world of Young Entrepreneurs
The reason why young people become Entrepreneurs
Many young people in Nigeria dream to be Chief Executive Officers of their own companies someday and some of them have started down this road by owning their own businesses. However, apart from becoming a CEO there are several other reasons why they become entrepreneurs. According to the report, the main reason why people become entrepreneurs is because they want to make a difference in the society, closely followed by wanting to utilise the opportunity to carve a niche for themselves.
The biggest challenge of growing a business
Almost every entrepreneur will agree that the biggest challenge to growing a business is getting proper access to funds. There are several people out there with good ideas with the potential to fetch more income for them and improve the economy but, these ideas are left to die because they lack access to capital that can propel them. Most entrepreneurs fund their businesses by getting money from family members and through grants.
Doing business internationally
There is an untapped market for African entrepreneurs when it comes to doing business internationally. This is due to the fact that many are unaware of how to sell their products across borders. Since the growth of e-commerce in 2012, several entrepreneurs have been able to grow their business, however, not all of them are aware that they can also develop their market-base abroad through these platforms.
Sales and Marketing
Firms that can successfully compete with others have been able to make it through sales and marketing, which is one of the major driving forces of businesses in Africa. Sales and marketing go hand-in-hand as a product cannot be known without giving it the right publicity. However, several entrepreneurs are also using social media and other platforms, such as exhibitions, as another way of showcasing their products. According to the report, when it comes to marketing businesses, 58 percent of young entrepreneurs invest in paid-for advertisements on social media networks, while 50 percent invest in exhibitions and events. However, word-of-mouth, which represents 83 percent, is by far the most popular marketing medium. A significantly less amount of people make use of more expensive channels such as television, outdoor billboards and radio.
Several organisations have come together to help solve the problem of a lack of access to funds for entrepreneurs. Recently in Nigeria, the YESGrant scheme was initiated by the Nigerian Young Professionals Forum (NYPF) in collaboration with Heritage Bank in order to provide funds for about 1000 Entrepreneurs in the country. If more organisations can come together like this to help unemployed youths in Africa more often, the level of unemployment in the continent may reduce drastically. In spite of all of these challenges, those who participated in the survey are confident about the future and suggest that governments should teach entrepreneurship in schools in order to help people interested.
