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Survival Entrepreneurship Is Not Enough To Drive Change In Africa

Survival Entrepreneurship

Survival entrepreneurship is no longer enough! “Africa represents a prime case where the reality and opportunity are much better than the perception” – Thomas Barry

The energy in the atmosphere is relatively dull. In order to escape it, I monitor other climes to see what our counterparts are up to. The global market is shrinking, disappointing data is flooding the space, but in the midst of all these, inventors are capitalising on it to solve problems differently.

Uber is striving and outperforming long existing structures. Amazon is grabbing markets from long existing operators. After conquering the bookshop space, technology retail, clothing market, it’s currently flexing its muscle in the fresh food market, the grocery market. The market is constantly getting disrupted, as companies fall over each other to simplify processes leveraging on technology.

The I-can-do-it spirit is highly admirable, and this brings me to this end of the curve – for how long will we keep complaining?

I read an article earlier in the year about the lack of market crippling strawberry farming in Jos. The farmers lamented the poor storage facilities and lack of access to a wider market which result in about 30% of post-harvest going to waste. The portion that eventually gets sold does not command its fair value in the market. This is expected as the farmers are selling in their local community which already has an oversupply.

For how long?

Imagine if these farmers formed an association and ploughed back profits to buy a small refrigerated van, a resource they can all leverage. Or a micro-finance company financed this acquisition? Shouldn’t this solve part of the problem?

I know Africans are very entrepreneurial and resilient but the time has come to make a shift from survival entrepreneurship to impact entrepreneurship.

Survival entrepreneurship accounts for the large informal structure we have in Africa. About 60% of Nigeria’s GDP is made up of the informal structure. What makes a business informal? The business is found in the sector which encompasses all jobs for which tax isn’t paid.

In survival entrepreneurship, an entrepreneur sets up just to have his head above the waters, to stay alive, to survive instead of strategising to scale and compete with global brands.

Compared to other regions of the world, sub-Saharan Africa has the highest number of female entrepreneurs. But guess what? Most of them are surviving (I respect their courage). Survival entrepreneurship is not enough. It is not sufficient to engender the hope and incentive to drive the overhaul we need. If not, we will continue to play small.

I am of the opinion that Africa is the perfect ground to experiment because many of the sectors are unsaturated. There is room for growth and expansion. It is a fertile ground. In some cases, you don’t even need to disrupt or re-invent the wheel as replication with local content hasn’t been maximised.

Despite the saturation that might have occurred in developed markets, I see our counterparts constantly looking for how to create new markets, disrupting existing processes and products, creating new demand, continuously pushing the envelope and looking for faster ways to achieve objectives. Cheaper ways are being discovered to transform existing solutions.

This might seem like an unfair comparison, but really we need to challenge ourselves more. I am fully aware of all the infrastructure deficiency. Not to add salt to injury, but imagine if they (developed countries) traded countries with us. Will they keep wailing about the problems year after year instead of solving them? Oh by the way, Nigeria, Africa’s largest country by GDP, earlier in 2016 announced that it has concluded plans to establish the first ever high-powered DNA forensic laboratory.

We have a long way to go and we need to change our mind-set and actions to achieve goals. How do we take advantage of the many entrepreneurial opportunities in multiple sectors in Africa as well as new contacts and connections throughout the region?

We should also look to nurturing Africa’s small- and medium-sized enterprises (SMEs). On average, SMEs provide 65% of private-sector employment in Africa. As a result of foreign exchange scarcity, Shoprite plans to stock more locally-manufactured products. How many companies are aggressively positioning to bridge that gap?

Think impact, think scale and think competitively.

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