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IGNITING POTENTIAL
Empowerment Through Entrepreneurship
AUGUST 2O13
$150,000 PRIZE OPENS FOR INNOVATIVE ENTREPRENEURS WITH SOLUTIONS TO AFRICAN CHALLENGES
A competition, which will award prizes to entrepreneurs and innovators
who deliver market-oriented solutions for African development, has
been announced by the African Innovation Foundation (AIF).
AIF calls for entries for the 2014 Innovation Prize for Africa. The prestigious
prize, presented annually since 2012, aims at encouraging innovations
that contribute to sustainable development in Africa. The winning
submission will be awarded a prize of $100,000, with two additional $25,
000, one for the runner up with an innovation with the best business
potential and the other one for the runner up with the innovation with
the best social impact.
Therefore, the Innovation Prize for Africa invites African entrepreneurs
and innovators to propose projects that unlock new African potential
under one of five categories that include agriculture and agribusiness,
environment, energy and water, health and well-being, ICT applications,
and manufacturing and services industries.
“The IPA team believes that the best way to build Africa’s capacity is to
invest in local innovation and entrepreneurship. This prize encourages
Africans to develop creative ways to overcome everyday challenges,”
said AIF founder Jean-Claude Bastos de Morais.
The IPA 2013 was awarded to South Africa’s AgriProtein for its innovative
approach to nutrient recycling – a method that uses waste and fly
larvae to produce natural animal feed. The 2013 prize also recognised
two additional winners for their contributions to African innovation. In
the business potential category, Hassine Labaied and Anis Aouini from
Saphon Energy (Tunisia) received $25, 000 for creating a bladeless wind
convertor.
CONTENT
BUSINESS DAY
1
1 $150,000 Prize Opens for Innovative Entrepreneurs with Solutions to African Challenges
2 Cape Entrepreneurs up the Ante
2 Nigeria to Host Africa Entrepreneurship Summit
3 The AfDB SME Program Approval: Boosting Inclusive Growth in Africa
4 African Development Fund - Skills, Jobs and Entrepreneurship in Rwanda
4 SMEs: Engine Of Social And Economic Development In Africa6
6 African Women’s Entrepreneurship Program Participants Gather at AGOA Forum
7 Ethiopia: “Entrepreneurship Isn’t About Easy Money”
10 $10m Venture Fund to Create More Jobs
11 Why African Entrepreneurs Outperform Their Peers On Leveled Playing Field
13 Economic Growth in Africa Provides Opportunity for SMEs
10 Nigerian Students Defeat U.S., China, South Koreans to Win Entrepreneurship World Cup
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In the social impact category, Sanoussi Diakite (Senegal)
received $25, 000 for developing and distributing a thermal
powered machine that husks 5 kilogrammes of fonio – an
important and healthy West African cereal – in just eight
minutes. This innovation increases accessibility to a nutritious
African staple food source and addresses challenges
associated with its consumption.
With more than 1,350 applications received to date, the IPA
aims to support Africans’ efforts to develop new products,
increase efficiency and drive cost-savings on the continent.
The IPA also provides a platform for African innovators to
showcase their solutions to potential investors and seek
partners to scale up their marketable concepts. Only
innovations by Africans and for Africans are eligible to enter.
Africans in the Diaspora can also apply if their innovations
are of significance to Africa.
The registration deadline for the 2014 prize has been set
for October 31, 2013. Detailed information of competition
categories, conditions of entry and submission procedures
are available on the Innovation Prize for Africa website.
Business Day. 2013. $150, 000 prize opens for innovative
entrepreneurs with solutions to African challenges.
Business Day [online]. 12 August 2013. Available at www.
businessdayonline.com/2013/08/150-000-prize-opens-
for-innovative-entrepreneurs-with-solutions-to-african-
challenges (accessed 12 August 2013).
In a report released in early 2013, South Africa showed
dismal performance in comparison to other emerging
countries in creating new entrepreneurs. The 2012 Global
Entrepreneurship Monitor report stated that entrepreneurship
statistics were lower in 2012 than that of the previous year.
Daniel Marcus, Cape-based chief executive officer of
conference and events company Living Your Brand says
that while entrepreneurial success is possible in South Africa,
a positive outlook and a never-say-die attitude are key for
survival.
Speaking of his own experience, Daniel says that Living Your
Brand, which this month celebrates three years in operation, Lagos — The board of International Federation of Training
and Development Organisation (IFTDO) has granted
was born out of fresh thinking and a general frustration with
the state of a certain niche. Together with Jaco van Zyl and
Jacobus le Roux, who run the events and conferencing
divisions of the business, Daniel has established Living
Your Brand as one of South Africa’s leading events and
conferencing agencies in just three short years.
“I’m a firm believer in the old cliché that ‘you can never be
too positive’. In South Africa there are so many negatives
that we could focus on instead of finding our individual
window of opportunity and jumping at it.” Daniel started
Living Your Brand after a series of both successful and
unsuccessful business ventures, to which he attributes the
success of the company. “You’re unlikely to succeed unless
you’ve experienced failure at some point.”
In addition to private events, Daniel and his team
conceptualised the popular Integrated Marketing
Communications conference (IMC) concept. The
conference, which is now in its fourth year, has run in both
Johannesburg and Cape Town – with a third event to
be held in London in 2014. He credits the success of the
concept to the passion and enthusiasm of the team at
Living Your Brand, as well as the gap they filled by focusing
on integration in the marketing sector.
Over the past three years the company has built up an
impressive client profile which includes brands such as
Bentley SA, FNB Wealth, Nedbank Capital, Sanlam Investment
Management, Vodacom, Standard Bank, Lanxess, Landis &
Gyr, GEMS and The Jacob Zuma Foundation.
“We are very excited about what the future holds for the
company as well as the industry. The passion and belief
in achieving new heights for clients that our team brings
everyday is what will continue to set us apart,” says Daniel.
Cape Business News. 2013. Cape Entrepreneurs up the Ante.
Cape Business News [blog]. 12 August 2013. Available at
http://www.cbn.co.za/dailynews/6917.html (accessed 12
August 2013).
NIGERIA TO HOST AFRICA ENTREPRENEURSHIP SUMMIT
CAPE ENTREPRENEURS UP THE ANTE
NURUDEEN OYEWOLE
CAPE BUSINESS NEWS
3Empowerment Through Entrepreneurship
AUGUST 2O13
Nigeria the hosting right of the 7th African Regional
Entrepreneurship Conference in November 2013.
At a press briefing heralding the conference in Lagos,
Chairman, Conference Planning Committee, Rev. Tunde
Salawu said the international conference which is to hold
in November, 2013 in Abuja is strategically employed to
address growing unemployment crisis in Africa.
“The summit is to harness resources across the continent
and to use skill acquisition in different ramifications to solve
youth unemployment which has become a scourge in the
whole of African continent. And it is on that basis we have
chosen as a theme for the conference: “Skills Acquisition
as a panacea for youth unemployment in Africa” Salawu
said.
According to the Organising Committee Chairman,
participants at the summit are drawn from both public and
private sectors of all African countries.
Salawu said topics such as economic and social impact
of youth unemployment in Africa, leveraging on ICT for
skill acquisition and youth employment, embedding
entrepreneurship in African education curriculum as well
the Public-Private Partnership option in addressing Skills
Development and Employment Crisis, among others.
Oyewole, N. 2013. Africa: Nigeria to Host Africa
Entrepreneurship Summit. Daily Trust (online). 20 July 2013.
Available at http://allafrica.com/stories/201307221353.html
(accessed 12 August 2013).
The Board of Directors of the African Development Bank
(AfDB) (http://www.afdb.org) approved today the Africa
Small and Medium Enterprises (SME) Program, a four-year,
US $125-million funding program combined with a US
$3.98-million technical assistance package granted by the
Fund for African Private Sector Assistance (FAPA), aiming at
supporting micro, small and medium enterprises (MSMEs) in
Africa.
The program will provide standardized lines of credit (LoCs),
mostly in local currency, and technical assistance to targeted
financial institutions, predominantly in low-income countries
spread over all five African regions. The SME Program will
avail important longer-term resources to thousands of
SMEs including women and youth, thus contributing to job
creation, poverty reduction and inclusive growth on the
continent.
The SME sector is crucial to Africa’s growth, contributing
more than 45% to employment and 33% to GDP. SMEs
continue to face significant challenges. Studies indicate
that more than 70% of SMEs lack access to medium-
longer-term finance, creating an SME funding gap of more
than US $140 billion in Africa alone. Well performing local
SME-focused financial institutions lack access to longer-
term resources from depositors, capital markets or other
potential funders hindering the provision of medium- and
long-term SME finance. Of the loans available, almost 60%
is for less than one year. Financial institutions also often lack
adequate knowledge and systems to assess and monitor
SME projects and compensate this by relying on excessive
– but mostly unavailable – collateral.
In response to these challenges the AfDB, through this SME
Program, will provide the necessary longer-term finance
and a technical assistance package to address a number
of the constraints faced by around 25 target financial
institutions and their SME clients across Africa.
Thus, the program will benefit from the Fund for African Private
Sector Assistance (FAPA) support that will grant US $3.98
million to provide technical support to building capacities
of the 25 participating financial institutions to improve their
operational efficiencies, in areas such as credit assessment
and risk management, thereby contributing to better
access to finance for African MSMEs sustainable growth.
FAPA is a multi-donor thematic trust fund, financed by the
Government of Japan, the AfDB, the Austrian Development
Bank and the Government of Austria, that provides grant
funding for technical assistance and capacity building
to support implementation of the AfDB’s Private Sector
THE AFDB SME PROGRAM APPROVAL: BOOSTING INCLUSIVE GROWTH IN AFRICA MARC MCILHONE
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IGNITING POTENTIAL
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Development Strategy. This US $3.98-million FAPA technical
assistance grant for the AfDB Africa SME Program is the
highest amount approved in the history of FAPA.
Improved access to financing amongst members of the
majority of urban and rural dwellers who depend on smaller-
scale business activities will allow further support to their
living and that of their families and communities. Women
are likely to benefit of the expanded outreach as they tend
to operate more often in rural-based smaller enterprises. The
social effects of the Africa SME Program will be significant
given the particular support to microfinance institutions in
low-income countries and fragile states, thus deepening
access to finance for micro and small enterprises in severely
underfinanced communities in the longer term, resulting
in poverty reduction and social inclusion. In addition, the
Program will also contribute significantly to capital market,
private sector development and government revenue.
Mcilhone, M. 2013. The AfDB SME Program Approval: Boosting
Inclusive Growth in Africa. AfricanBrains [online]. 24 July
2013. Available at http://africanbrains.net/2013/07/24/the-
afdb-sme-program-approval-boosting-inclusive-growth-in-
africa/ (accessed 12 August 2013).
Rwanda has been an economic success and has maintained
a strong growth path averaging 8% per year over the last
decade. Rwanda has made remarkable progresses on
the Millennium Development Goals, particularly in areas
of health, and in lifting one million people out of poverty
(MDG 4, 5, 6).
The Rwanda Skills, Employability and Entrepreneurship
Project (SEEP) is a sector budget support operation, to
build human capital, reduce unemployment, address the
skills mismatch between supply and demand in the labour
market, and stir innovation and entrepreneurship.
ADF Financing, Project Preparation, Advisory and Brokering
Role
ADF-12
SMEs (Small and Medium-sized Enterprises) are very
important to the growth of any nation. It is no surprise that
developed countries enjoying a growing and booming
economy attribute most of their achievements to a
flourishing SMEs sector.
Empirical studies have shown that SMEs contribute over
55 percent of gross domestic product (GDP) and over 65
percent of total employment in high-income countries.
In the developed economies, small businesses are recognized
ADF-12 provided a grant of US $37.5 million for this
operation.
ADF-13
ADF 13 is expected to play a crucial role in continuing to
support this project.
African Development Bank. 2013. African Development
Fund - Skills, Jobs and Entrepreneurship in Rwanda. African
Development Bank. 5 August 2013. Available at http://
allafrica.com/stories/201308052585.html (accessed 12
August 2013).
AFRICAN DEVELOPMENT FUND - SKILLS, JOBS AND ENTREPRENEURSHIP IN RWANDA
SMES: ENGINE OF SOCIAL AND ECONOMIC DEVELOPMENT IN AFRICA
AFRICAN DEVELOPMENT BANK
CHARLES YEBOAH FRIMPONG
Charles Yeboah Frimpong
5Empowerment Through Entrepreneurship
AUGUST 2O13
as the main engines for growth and development because
of their significant contributions to economic growth and
prosperity.
The potential of SMEs to promote domestic-led growth in
new and existing industries and to strengthen the resilience
of the economy in a competitive and challenging
environment is inarguable. According to the Department
of statistics of Malaysia, the economic growth in developed
countries such as Korea, Japan, Taiwan and many others, was
significantly generated by SME activities. The percentage
contribution of SMEs to Gross Domestic Product (GDP)/total
value added ranges from 60 percent in China, 57 percent
in Germany, 55.3 percent in Japan and 50 percent in Korea,
compared to 47.3 percent attained by Malaysia. The SME
growth is assessed by SME contribution to the three (3)
main sectors of the economy; manufacturing, services and
agriculture.
This shows that small and medium enterprises (SMEs) have
been the backbone of economic growth and driving
industrial development. Due to their sheer numbers, size
and nature of operations, the role of SMEs in promoting
endogenous sources of growth and strengthening the
infrastructure for accelerated economic expansion and
development has been recognized.
Small and medium-sized enterprises (SMEs) are increasingly
being recognized as productive drivers of economic growth
and development for African countries. For example, it is
estimated that SMEs account form 70 percent of Ghana’s
gross domestic product (GDP) and 92 percent of its businesses.
They also make up 91 percent of formalized businesses in
South Africa and 70 percent of the manufacturing sector
in Nigeria. SMEs not only contribute significantly to the
economy but can also serve as an impetus for economic
diversification through their development of new and
unsaturated sectors of the economy. In addition, innovative
and technology-based SMEs can provide an interesting
platform for expanding outside of domestic borders, and
entering intra-regional and international markets.
In many African countries SMEs account for about 50% of
job creation. In Tanzania for example, it is estimated that
more than a third of the GDP originates from the SME
sector. In South Africa on the other hand, it is estimated
that 91 percent of the formal business entitles are MSMEs,
contributing between 52 and 57 percent to GDP and
providing about 61 percent to employment.
A study conducted by the University of Ghana in the past
estimates that small enterprises in Ghana provide about 85
percent of manufacturing employment and also further
states that SMEs are believed to contribute about 70
percent to Ghana’s GDP and account for about 92 percent
of businesses in Ghana.
Small businesses contribute to local economies by bringing
growth and innovation to the community in which the
businesses are established. Small businesses also help
stimulate economic growth by providing employment
opportunities to people who may not be employable by
larger corporations. Small businesses tend to attract talents
who invent new products or implement new solutions for
existing ideas.
Larger businesses also often benefit from small businesses
within the same local community, as many large corporations
depend on small businesses for the completion of various
business functions through outsourcing.
Irrespective of the awareness of the remarkable contribution
of SMEs to the development of African economies, it has
to be admitted that the growth of SMEs in Africa faces
a number of generic challenges. The first and common
challenge is the lack of access to appropriate capital from
both the banking sector and the capital markets. There is a
general perception in the financial sector that lending or
provision of capital to SMEs is risky business due to a number
of reasons: high mortality rates of SME businesses, suspect
management capabilities and skills, poorly prepared
business proposals, obscure historical records of the
operations of the SMEs and the lack of reliable collateral or
collateral mismatch between type of assets held by SMEs
and type of assets required by banks for collateral.
Contrary to the developed world where SMEs enjoy a great
deal of protection and pampering, Africa’s SMEs are said
to be living on the edge as borrowing institutions dedicate
much of their loan portfolios to big business. Besides, SMEs in
African countries lack the needed infrastructure and strong
government policies to protect and support them put up
their best to contribute to economic development.
It is said that the contribution of SMEs to the national GDP
of Nigeria is poor for myriad reasons, including inadequate
infrastructural/financial support to businesses operating
within the various sectors, limited application of innovation
to operations within the segment, unfavourable competition
with foreign goods and services among others.
Lack of credit access indeed places a heavy burden
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on entrepreneurs to raise large amounts of capital for
business development themselves and makes it hard for
ideas to grow into enterprises. Improving access to credit
is thus crucial if SMEs are to reach their potential and allow
businesses to move from start-ups to established businesses
with growth potential.
Credit is also essential for creating an entrepreneurship spirit
as it allows businesses to fail and rebound rather than just
fail. Indeed, it is common for a number of start-ups and small
businesses to fail, and a climate that allows failure allows an
entrepreneur to learn from that failure and start afresh. It is
in such an environment that innovation and success can
most thrive.
Although small businesses may not generate as much
income as large corporations do, they are a critical
component of and major contributor to the strength and
growth of local economies. Small businesses present new
employment opportunities and serve as the building blocks
of the largest corporations in developed countries.
Economies that have had the SME sector make better
contribution to GDP have shown consistent commitment to
the development of the sector by implementing access to
finance and financial incentives, basic and technological
infrastructure, adequate legal and regulatory framework,
and a commitment to building domestic expertise and
knowledge.
In this context, a policy thrust to grow successful SMEs must
take pre-eminence if long term sustainable economic
development and transformation of Africa is to be
realized.
Charles Yeboah Frimpong
University of Ghana
Member, The Institute of Chartered Accountants
(Ghana)
Tel: +233-246-542-642
Email: [email protected]
Frimpong, C.Y. 2013. SMEs: Engine Of Social And Economic
Development In Africa. Spy Ghana [online]. 28 July 2013.
Available at http://www.spyghana.com/smes-engine-of-
social-and-economic-development-in-africa/ (accessed
12 August 2013).
The African Women’s Entrepreneurship Program (AWEP) is
a U.S. Department of State initiative that was launched in
2010 alongside the African Growth and Opportunity Act
(AGOA) ministerial forum in Zambia. AWEP builds networks
among women entrepreneurs across sub-Saharan Africa
poised to transform their societies by owning and operating
small and medium businesses and by becoming voices for
social progress in their communities.
August 10-11, AWEP’s Ethiopia Chapter will host a forum
prior to the 2013 AGOA Forum’s ministerial program held
in Addis Ababa, Ethiopia. One hundred AWEP women
entrepreneurs from across the continent will participate in
the forum, themed “Queen of Sheba: The Entrepreneur.” U.S.
Congressional delegates, private sector practitioners and
senior U.S. and African officials will also participate.
This year’s forum will focus on best practices for trading under
AGOA, access to finance for women, business development,
regional initiatives empowering women entrepreneurs, and
use of social media to build a successful business.
The First Lady of Ethiopia H.E. Roman Tesfaye, U.S. member
of Congress Karen Bass, and African Union Commissioner
for Trade and Industry Fatima Acyl will open this year’s
AWEP Forum, and U.S. Department of State Deputy Assistant
Secretary for African Affairs Cynthia Akuetteh and AWEP-
Ethiopia President Samrawit Moges will close the forum.
On the evening of August 11, AWEP will participate with the
Corporate Council on Africa’s U.S.-Africa Business Center
and the Intel Corporation to host a Business-to-Business
(B2B) Networking Event. This event provides an opportunity
for AWEP entrepreneurs to network with U.S. companies
and investors from various sectors such as manufacturing,
services, technology, and fashion and textiles to build upon
the connections the women made during their AWEP
exchange to the United States. More than 100 AWEP women
entrepreneurs, 30 U.S. companies, and U.S. Congressional
delegates have been invited to attend.
AFRICAN WOMEN’S ENTREPRENEURSHIP PROGRAM PARTICIPANTS GATHER AT AGOA FORUM
US DEPARTMENT OF STATE
7Empowerment Through Entrepreneurship
A number of African pioneers and entrepreneurs have
ventured towards establishing technology start-up
companies and innovation hubs. The eLearning Africa
Report interviews Markos Lemma co-founder of iceaddis,
an innovation hub based in Ethiopia
Please tell us about your personal journey: what was
your most influential formative educational experience
as you were growing up?
I never went to any particularly exceptional schools in
my childhood. I attended public schools both at primary
and secondary level. But the most influential formative
educational experience I had was when I joined a
university. I obtained a Bachelor’s degree from Royal
Melbourne Institute of Technology (RMIT University) through
a programme of the African Virtual University (AVU), which
I attended in Addis Ababa with a mixed-mode education
system.
The programme incorporated standard lectures (from
Addis Ababa university facilitators), VSAT live lectures from
Melbourne, via the WebCT eLearning platform (undoubtedly,
the first eLearning programme in the whole country) and
different virtual platforms. I believe this method of mixed-
mode learning and teaching is very effective: it gives
students unlimited possibilities of getting their questions
answered from different places.
What was it that inspired you to start iceaddis?
I am one of the co-founders of iceaddis. In the beginning, we
were asking ourselves very basic questions. “Where can the
Ethiopian creative youth go when they have great ideas?”,
“How do people start a business with zero experience?”,
“What can link universities with industries?” The answers
weren’t as easy as the questions.
Previously, I was involved in private sector development
projects at the German Association for International Co-
operation (GIZ), back then GTZ. We already noticed many
gaps, even with export-oriented companies, in the country.
Undoubtedly, the biggest inspiration came when one of
the co-founders visited iHub Nairobi. We felt the dots were
connected, and the answer was of course as easy as the
question. We needed open spaces, collaborative physical
platforms, and we need some energised people who are
able to drag hands and tap backs to create something
great in a country where innovation and co-working are
least endorsed.
Please tell us how you influenced iceaddis since it was
started.
Community management is in the foundation of the iceaddis
structure. We believe establishing new vibrant communities
and supporting the existing tech communities is a key
precursor for start-ups to emerge. The encouragement of
these communities creates its own competition and the
desire to do and make big things. I have been involved
in tech community management at iceaddis since the
beginning. Tech communities in Ethiopia are very vulnerable.
Communities need constant follow-up, workshops, events
and communications. Can you give us an example of the
challenges you have faced whilst working at iceaddis: how
did you overcome them?
One of the biggest challenges we have is the lack of real
co-operation from the private sector, government institutes
or international organisations. There is always verbal
appreciation and willingness to participate but this isn’t
always done visibly.
Furthermore, recruiting creative, innovative and fast-paced
and self-motivated individuals into the communities is very
hard. The mind-set is not there yet. There are more talkers
than doers. Entrepreneurship isn’t about quick money. It
is about changing the course of services and products.
This needs dedication and consistency. We faced a lot of
challenges finding such committed people. This is an on-
going challenge.
Another challenge we face is the Internet infrastructure. We
don’t want our entrepreneurs to waste one minute of their
For more information on AWEP, please visit: http://www.state.
gov/p/af/rt/awep/index.htm or email [email protected]
US Department of State. 2013. African Women’s
Entrepreneurship Program Participants Gather at AGOA
Forum. US Department of State (online). 9 August 2013.
Available at
http://www.state.gov/r/pa/prs/ps/2013/08/213025.htm
(accessed 12 August 2013).
ETHIOPIA: “ENTREPRENEURSHIP ISN’T ABOUT EASY MONEY”
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AUGUST 2O13
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precious time, but the sole Internet service provider, Ethio-
telecom, is still struggling to find its position in the Ethiopian
tech scene. Only one per cent of the general population is
connected to the Internet; this is very small market share for
the entrepreneurs who are working solely in the ICT sector.
Products are not consumed, so the profits are minimal.
As a hub we can’t even afford an Internet connection of
more than 4MBps. This slows down our activities at every
level. In addition, other infrastructures related to the Internet
are still in the infant stage. East Africa is well known for its
mobile banking, however, this has not taken hold in Ethiopia
yet. Developers don’t have infrastructure to sell their product
to customers. They cannot upload their product to either
Google Play or the Apple Store. There are no credit card
systems and no international banking services.
However, we have been developing a local app store to
tackle this problem. Once this platform is up, developers will
be able to start to sell their products to customers in Ethiopia
using SMS balance transfer. We take these challenges
positively. The reason we are up here and working is to
make sure that innovative ideas come out of the hub to
tackle such issues. We are innovation hub, not an ICU unit!
How do you think technologies can best help build
sustainable human development across Africa?
The answers for most of the questions we have in Africa are
critical thinking and access to technology. Usually, people
think about high-techs whenever they think of technology.
The truth is we need to get access to technology at every
level. Promoting and using technology should be widely
practiced. As the famous saying goes: “it is easier to have
old problems than new solutions”. We need to accept
new solutions. There is no magic technology which solves
all the problems we have. In reality, only few technologies
work in specific situations out of thousands of technologies
available. We need to try out, test and keep on promoting
and using these solutions.
Africa is famous for mobile technology and social media. If
the next big thing doesn’t come out of Africa, there will be
no next big thing. Africa is big. My knowledge is very much
limited to my surroundings, but I believe that in every village
everyone should work to enable access to technology and
encourage people to think critically.
What do you think is the most significant change that
needs to happen in order to tackle the education and
training challenges that Africa faces?
The first and basic change that should occur is that Africans
need to believe that if we don’t solve our problems, no one
will. But I think I am too late to state this. Most Africans are
already aware of that. The basic change is done. Education
is the key and it all starts at the family level. Families have
the highest responsibility in raising the next generation.
I believe the biggest change should happen to tackle
education and the challenges we face in Africa is to have
a tight relationship between communities and educational
institutions.
The Internet infrastructure should be improved. Schools
need to be more equipped and open. I have noticed in
the schools in Ethiopia that schools are only for the students.
This attitude should be changed. Higher education should
work closely with the private sector; students need to
get their hands dirty. If education is all about theories, we
only need to teach people to read. We need to learn but
also practice what we learn. I know these are basic and
elementary statements. But these are the essentials.
Education reforms and curriculum revision should be carried
out at every level. We should stop teaching, we should start
educating.
What do you consider to be the most transformative,
innovative and exciting initiative currently taking place
in technologies and education, skills development and
lifelong learning and training in Africa?
I’m really excited to be part of the reading research project
currently running in two Ethiopian villages. This project is
aimed to tackle low literacy levels - a serious problem in
Africa. The research is carried out in collaboration with OLPC,
MIT and Tufts University. Basically, we give tablets to the kids
and check if they can learn how to read just through using
apps. The programme has been running for one year, and
the children in the project are at the cusp of being able to
read. This is a very innovative and transformative initiative
going on in Africa right now.
M-Learning is very transformative. There is high penetration
of mobile phones on the Continent. This is something growing
at an interesting rate. There are more mobile phones in
Uganda than light bulbs and 91 per cent of South Africans
own at least one mobile phone. In Gabon, there are more
mobile subscriptions than inhabitants.
Using mobile phones for education is not only innovative;
it is also far cheaper than traditional models. Schools don’t
need to provide mobiles as students already own them. This
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AUGUST 2O13
is a great advantage over organising a computer lab. The
culture of mobile communication is also mature - people
in Africa know very well how to operate a mobile phone.
This is especially interesting considering the fact that mobile
technology is one of the fastest growing technologies in
the world. Ubuntu already introduced standard Operating
Systems for mobiles. I believe the schools should seriously
consider how to teach students to get the maximum use
out of their mobile phones.
The vibrant spread of innovation and incubation centres
is also a good example of great African initiatives. These
hubs help the students learn entrepreneurship, life-skills
and business skills and they have enough facilities to
give on-the-job training.
What is the most significant lesson or piece of advice
you would share with others seeking to follow in your
footsteps?
A new mind-set is coming to Africa. This generation of
Africans is tired of aid. We are sick of listening to the
same old single-story over and over again. I began with
understanding our surroundings. I have been giving enough
attention to what is going on around me before I look to
see what’s up thousands of kilometres away. Our streets are
full of opportunities and it is important to participate at the
community level.
I believe we need to do things on the spot, communicating
as far as it is possible and thinking of the long-term and
comprehensive benefits.
My advice is that it is all about drawing a small circle
around us. We need to give extra attention to where we
are living. We need to influence the people around us and
start small. Of course, the more we win over the heart of our
community, the more our circle will expand.
Looking forward to the next five years - what do you
see on the horizon in terms of influential changes,
transitions, technologies and trends that will affect the
integration of educational technologies in education,
skills development and lifelong learning landscape in
Africa?
In near future, the participation of private companies in the
education sector will grow. Almost 50 per cent of Ethiopia’s
population is under the age of 18. With scarce facilities, this
is a big threat and traditional educational institutes cannot
satisfy this need alone. The Ethiopian Ministry of Education
targets to have at least one school in each “kebele” (about
3 km radius). This means that the numbers of students who
are ready to join university are extremely huge. It requires a
lot of private sector involvement.
The Internet penetration will also increase in the coming
years. This will give a suitable environment for eLearning
and mLearning. I also expect that the number of diaspora
Africans coming back to Africa will increase. This will
make the universities better equipped in terms of human
resources.
I also believe Open Educational Resources (OER) will
be widely used. More and more schools are integrating
mobile phones into their classrooms. More content will be
generated by Africans. Investment in affordable tablets
and laptops will circumvent the high cost of printing text
books.
What will iceaddis contribute to Africa’s human
development over the next five years?
iceaddis is a place for high potentials. Startups emerging
out of iceaddis will create unique job opportunities. The
whole philosophy of open and common knowledge is to
influence the mind-set of young Ethiopians. Iceaddis will
work on encouraging sharing culture, promoting Ethiopian
innovation to the world.
The icehubs network is a growing network: icecairo in Egypt
and icebauhaus in Germany are already established entities
and I believe the icehubs network will be expanding to
other neighbouring countries. There are already initiatives to
open hubs in South Sudan, Kenya and Djibouti. The iceaddis
prototyping facilities will also enable our communities to
design their products.
We are looking forward to forging new partnerships and
connecting with more supportive organisations: we are
open to any kind of cooperation! Our contribution is to be
a home for future innovators. “Entrepreneurship Isn’t About
Easy Money” is one of the twelve opinion pieces featured
in the eLearning Africa 2013 Report. To read more about
the annual publication, please visit: http://elearning-africa.
com/media_library_publications_ela_report_2013.php.
eLearning Africa. 2013. Ethiopia: “Entrepreneurship Isn’t
About Easy Money”. AllAfrica.com [online]. 9 July 2013.
Available at http://allafrica.com/stories/201307160419.
html?viewall=1 (accessed 12 August 2013).
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IGNITING POTENTIAL
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“The investment is important and we are hoping to grow
the fund to over US$30 million as the US$10 million is just 30
percent of the total capital,” Mr Mwale said.
“Within the next two years, the fund will grow and be
opened up to other Zambians locally and abroad to take
up shareholding in the firm,’’ Mr Mwale said.
He said between 30 and 40 people are expected to
be employed initially and more later as the company
expands.
The firm will help SMEs which lack access to finance from
banks or those which have already accessed financing
through the banks and are looking for more capital.
It will also be dealing with start-up SMEs and existing
companies that will be assessed on a case-by- case basis
or through risk assessment.
Mr Mwale said the criterion is difficult to determine as the
firm will be dealing with different sectors, hence the need to
conduct risk assessment.
“We will assess on a case-by-case basis and if it is a business
that has a lot of opportunities for growth, we may get
into that business, take equity into that business or help to
restructure their debt,’’ he said.
The firm is targeting as many entrepreneurs as the fund will
allow countrywide, particularly those which will add value
to the economy in processing, manufacturing, information
and communication technology, tourism, agro business
and energy.
Mr Mwale said a venture capital fund is not like a typical
financial institution where firms borrow money, but deals
mainly with equity or partnerships.
“So if you are an SME and you want finance in your institution,
you don’t need to borrow from the bank….all you can do
is approach us and get some partnership or equity instead
of a loan,’’ he said.
The company will participate as a shareholder for a
particular period, and thereafter, it will place its investment
in another firm.
Mr Mwale said he is optimistic that the fund will succeed as
it is “very attractive” for the local market.
Sungani Mwale, Meanwood Venture Capital chief
executive officer, formerly of Merryl Lynch in the United
States. Meanwood has pumped US$10million in the first ever
venture capital fund in Zambia that is expected to uplift
small and medium scale business in Zambia.
The first ever private sector venture capital fund has been
set up in Zambia, with an initial investment of US$10 million
(K54 million) which is expected to create hundreds of jobs
and help to reduce poverty in Zambia, the Daily Mail has
learnt.
The ambitious project, intended especially for small-scale
businesses, is the brainchild of Meanwood Properties Limited
and will be called Meanwood Venture Capital after being
incorporated on May 30, 2013. It will provide private equity,
which is often hard to access from commercial banks
because of high interest rates.
Company managing director Sungani Mwale said in Lusaka
yesterday that while the initial capital is US$10 million, the
target is to grow the fund to US$30 million (more than K150
million), seek boosting local shareholding among Zambians
and also benefit Zambians in the Diaspora in the next two
years.
$10M VENTURE FUND TO CREATE MORE JOBS
NKOLE CHITALA
Sungani Mwale
11Empowerment Through Entrepreneurship
AUGUST 2O13
He also urged SMEs that are short of money to allow the firm
to participate as a shareholder to grow their businesses.
Mr Mwale advised firms to use corporate advisory services
as the firm will provide restructuring support to firms with
a perfect business model and products but need help in
managing the business.
The firm will also guarantee loans with the bank by
underwriting the risk for the firm which wants to access a
loan from a bank but has no collateral.
“This will benefit SMEs, Government through economic
growth and other players such as banks. So, we are providing
a whole package,” he said.
Chitala, N. 2013. $10m Venture Fund to Create More Jobs.
Zambia Daily Mail [online]. 12 August 2013. Available at
http://www.daily-mail.co.zm/local-news/20325 (accessed
12 August 2013).
Entrepreneurs in some of the world’s poorest countries
should find cause for optimism in “Explaining Africa’s (Dis)
Advantage,” a recent study co-authored by Wharton
management professor Ann Harrison and published by the
National Bureau of Economic Research.
“If … you were to give African entrepreneurs the same kind
of environment as an American or European entrepreneur,
they would outperform their counterparts,” Harrison says. By
imagining impoverished African nationals on a level global
playing field, Harrison and colleagues Justin Yifu Lin at Peking
University and L. Colin Xu at the World Bank see ample
potential for “a positive reinforcing cycle of development.”
In contrast with existing research that examines the
big picture in Africa using macroeconomic data and
microeconomic studies of single outcomes — which
often overlook the broader aspects of how African firms
behave and perform — Harrison, Lin and Xu take their
research a step further. They parse the macro picture using
firm-level data from 12,000 companies in 32 sub-Saharan
African countries whose average annual per capita GDP
languishes below $3,000. Per capita GDP in the poorest
countries is less than $500 a year. The data were supplied by
the World Bank’s Enterprise Surveys, which, the researchers
write, are designed “to benchmark the investment climate
in developing countries across the world and to understand
the determinants of firm performance and behavior. In each
country, the survey was based on the universe of eligible
firms obtained from the country’s statistical office … and
the result is a representative sample of the non-agricultural
private economy in the country.”
According to the researchers, insufficient infrastructure,
scarce access to credit and political monopolies cripple
these economies. Inefficient telecommunications, a proxy
for infrastructure, consistently retains top ranking among
the reasons for their perennial disadvantage. The difficulty
to gain financing — due to a lack of formal lending sources
— garners second place. Single-party rule also inhibits
progress to a lesser degree. “If one could adjust the daunting
list of geographic, infrastructure, political, economic and
institutional factors to the levels [that exist] elsewhere,” the
authors write, “Africa possesses an inherent advantage.”
Harrison adds that this could be because African firms
have had to become stronger and work smarter in order to
survive such a challenging environment.
A ‘Daunting’ Business Environment
Using statistical adjustments that offset regional
disadvantages, the researchers recalculated key
performance measures. A revised roster shows that Africa
leads in total factor productivity (the gold standard for firm-
level performance in academic research), sales growth,
labor productivity and labor productivity growth, among
other variables. They also added adjustments for regional
conditions like bribery, tenacity of regimes to stay in power,
predilection for armed conflict, ethnic fractionalization,
difficulty firing unsuitable workers and a sizeable “informal”
business sector that doesn’t report bottom lines.
The researchers then compared the adjusted results from
WHY AFRICAN ENTREPRENEURS OUTPERFORM THEIR PEERS ON LEVELED PLAYING FIELD
VENTURES AFRICA
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IGNITING POTENTIAL
Empowerment Through Entrepreneurship
the poorest African nations with two other groups: A similar
“average comparison” group of countries outside Africa
and a “better comparison” group populated by countries
with more advantageous conditions for doing business.
Several industries furnished data about manufacturing
and services, including metals and machinery, electronics,
chemical-pharmaceuticals, wood and furniture, non-metals
and plastics, automobiles and parts, and other types of
manufacturing.
The researchers found that unsurprisingly, without controlling
for the significant challenges that African countries face,
the businesses in those nations perform significantly worse
than those in other parts of the world, exhibiting lower
productivity levels, growth rates, fewer exports and lesser
investment rates. But when the researchers controlled for
all the mitigating factors, the outcome changed — African
firms in the formal business sector led those located in
other areas in productivity levels and growth. The region’s
advantage was greater in low-tech as compared to high-
tech manufacturing. It was also not present in the service
sector.
However, that optimism is still tempered by the facts, the
researchers note. “African firms face a more daunting
business environment in almost all respects,” they write.
“They operate in poorer, smaller economies that are more
likely to be landlocked and they have inherited a history of
armed conflict. Political monopolies divert profits, tariffs are
higher and bribes are routine.”
Making Progress
The research indicates that the success of many African
firms depends on autocrats surrendering power and vibrant
financial systems taking root, among other tectonic shifts.
The number of years that a single party has ruled is adversely
correlated with labor productivity and sales growth,
Harrison notes, and the negative effects of a political party
monopoly are slightly stronger in countries where informal
commerce plays a bigger economic role. Similarly, party
monopoly significantly reduces growth in manufacturing
but not in services.
Far-fetched as it may seem, don’t rule out the possibility of an
upheaval that would change the business climate in some
of these nations for the better, Harrison adds. Change comes
fast nowadays, often spurred by telecommunications, as
the Arab Spring illustrated. In that respect, these countries
are fertile. When landlines prevailed in central Africa,
barely 2% of consumers had access to telephones. Today,
technology has leapfrogged landlines, and more than
eight in 10 Africans have access to a cell phone. That’s a
lot of progress in a relatively short period of time, Harrison
notes, and it signals the chance for more to come, possibly
sooner than traditionally expected.
Some of the researchers’ data even shed a favorable light
on ethnic fractionalization, which is common in Africa and
thought by most experts to hobble progress. “Our micro
evidence does not bear this out,” the researchers say.
“Indeed, ethnic fractionalization is robustly and positively
correlated with labor productivity levels and growth.”
Harrison compares this advantage to the ways that America
has benefited from being a nation of immigrants. “The
heterogeneity encourages creativity and cooperation,”
she notes.
The authors conclude that their study attacks a paralyzing
preconception. “There is no inherent Africa ‘curse’ that
hinders its development,” they write, “only a need for action
to address the poor political and business environment. This
is consistent with Africa’s growth record before the 1970s
and the growth record in the past decade.”
Don’t blame the myriad problems facing the region on
local firms, Harrison adds. They often have the right stuff to
succeed. Instead, blame governments and a corporate
climate that fails to furnish what the sector needs in order
to flourish and grow to the next level. “The implications for
what needs to be done to nurture a strong business sector
are clear: promote infrastructure, expand access to bank
and trade credit and encourage political competition,” she
notes.
Ventures Africa. 2013. Why African Entrepreneurs
Outperform Their Peers On Leveled Playing Field. Ventures
Africa [online]. 23 July 2013. Available at http://www.
ventures-africa.com/2013/07/why-african-entrepreneurs-
outperform-their-peers-on-leveled-playing-field/ (accessed
12 August 2013).
13Empowerment Through Entrepreneurship
AUGUST 2O13
challenges. R3.2 trillion has been earmarked to be spent
on 40 major infrastructure projects over the next three years
in South Africa, and Kenya is reportedly building the multi-
billion dollar Lamu Port-South Sudan-Ethiopia Transport
project, which will connect the country’s Lamu port with
South Sudan and Ethiopia via road, railway and oil pipeline
network.”
Paper says that it is also a risk for SMEs to expand too quickly,
or in an uncontrolled manner, as when this happens cash
flow and customer satisfaction are usually the first casualties.
“The trick is to carefully manage the expansion process,
so that business owners reap the medium and long-term
benefits.”
Paper predicts that SMEs will play a crucial role in the
economic growth that is expected on the African
continent. “Latest research by Menon Business Economics
shows that gradually, SMEs will play an integral role in
industrial development and restructuring, satisfying rising
local demand for services, which will allow for increased
specialisation and supporting larger firms with inputs and
services.”
He says that African entrepreneurs definitely operate in a
more challenging environment and thus need to be more
creative and resilient in order to make their businesses
succeed. “However, if they are able to operate and
succeed despite their numerous challenges, they will have
the potential to thrive,” concludes Paper.
Cape Business News. 2013. Economic growth in Africa
provides opportunity for SMEs. Cape Business News [online].
8 August 2013. Available at http://www.cbn.co.za/
dailynews/6914.html (accessed 12 August 2013).
Nigeria won the Students for Advancement of Global
Entrepreneurship (SAGE) World Cup 2013.
Nigeria has won the Students for Advancement of Global
The World Economic Forum, recently held in Cape Town,
highlighted the substantial economic growth that is
expected to occur on the African continent over the next
five years. It is predicted that Africa will have six or seven of
the fastest-growing economies in the world, as well as the
largest overall growth of any continent within the next five
years.
According to Mark Paper of Business Partners International,
speaking in light of Africa Day, celebrated annually on 25
May, this economic growth presents a significant opportunity
for small and medium enterprises (SMEs,) which are looking
to expand in the region. “Africa has been touted as the
next growth region, and should therefore present value to
SMEs which have done their research correctly and will be
able to service this growing market.
He says that however, although large businesses and
corporates have the ability and resources to expand into
Africa, this move may be more challenging for SMEs. “There
are still some obstacles for SMEs to overcome should they
wish to expand successfully into the region.
“The infrastructure in many parts of Africa is far less
conducive for creating an entrepreneurial environment
and entrepreneurs often struggle with electricity and
transport challenges, which all hinder growth.
“In addition, entrepreneurs in some parts of Africa have
considerably less access to funding as the banks are much
stricter in comparison to South Africa. African entrepreneurs
also face significant challenges when it comes to human
resources, as they do not have an abundance of skilled
workers in the region.”
However, Paper says that despite the many challenges
that African entrepreneurs face, they often manage to
overcome these and succeed in various industries, which
contributes positively to the economy of their respective
countries.
“African governments are increasing their investment into
infrastructural development projects on the continent,
which will assist entrepreneurs overcome some of their
ECONOMIC GROWTH IN AFRICA PROVIDES OPPORTUNITY FOR SMES
NIGERIAN STUDENTS DEFEAT U.S., CHINA, SOUTH KOREANS TO WIN ENTREPRENEURSHIP WORLD CUP
CAPE BUSINESS NEWS
PREMIUM TIMES
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IGNITING POTENTIAL
Empowerment Through Entrepreneurship
Entrepreneurship (SAGE) World Cup 2013 competition, the
News Agency of Nigeria reports.
It was organised by SAGE Global on Sunday Night in
Abuja in collaboration with Small and Medium Enterprises
Development Agency of Nigeria (SMEDAN) and other
Federal Government agencies.
Nigeria was represented by Junior Secondary School (JSS),
Jikwoyi, Abuja, and University of Calabar International
School (UCIS), Calabar.
JSS took the lead in the Social Enterprises Business (SEB)
category, while China emerged second and South Africa
came third.
UCIS came second in the Social Responsibility Business
((SRB) Category.
Prof. Curtis DeBerg, Global Coordinator of SAGE, who
announced the result involving 11 countries, said Nigeria
was leading in the integration of entrepreneurship in school
curriculum.
Deberg said entrepreneurship was not well taught in any
country but that Nigeria had taken the lead in integrating
it.
Other countries that participated in the event included:
USA, South Korea, Uganda, Kenya, Rwanda, Russia and
Singapore. Nigeria had won the SAGE World cup seven
times by beating USA, Russia, China, Singapore, Canada
South Africa, Great Britain and Ghana, among others.
Agwu Amogu, Africa Coordinator of SAGE, said it was
established as part of efforts to galvanise the enormous
creative energies and resources in the world to eradicate
poverty.
According to him, it will teach beneficiaries entrepreneurship
and financial literacy skills needed to be successful.
The Director-General of SMEDAN, Bature Masari,
commended the two Nigerian schools for the victory and
for retaining the cup.
Mr. Masari said the government was working round the
clock to give youth empowerment a pride of place in the
scheme of things.
“Right now, there is a new thinking in government to ensure
that entrepreneurship development is given the needed
support.
“That is why SMEDAN, which is the agency saddled with
the responsibility of leading the fight for the development
of SMEs in the country, is being repositioned, funded and
empowered.
“This is to ensure that we continue to provide leadership
and direction for SMEs and entrepreneurship development
all over the country.’’
Mr. Masari said the hosting of the competition was an
indication that the government “is ready to develop our
youth and nation economically, socially and politically.’’
The competition, second to be hosted by Nigeria, and 11th
in the series, is aimed at advancing youth entrepreneurship
and community service.
It emphasises ethical business practices, social responsibility,
civic engagement and environmental awareness.
Teenage entrepreneurs from around the world showcase
their innovative business and community service projects to
a panel of judges.
The competition has two major categories – Socially-
Responsible Business (SRB) and Social Enterprise Business
(SEB).
Premium Times. 2013. Nigerian students defeat U.S.,
China, South Koreans to win entrepreneurship world cup.
Premium Times [online]. 12 August 2013. Available at http://
premiumtimesng.com/news/142616-nigerian-students-
defeat-u-s-china-south-koreans-to-win-entrepreneurship-
world-cup.html (accessed 12 August 2013).
Students for Advancement of Global Entrepreneurship
