African countries are ripe with challenges which also means these areas are an entrepreneur’s dream to create valuable solutions to underserved and emerging markets. Over the years, Africa had to deliberately step back with its public projects and make way for private enterprise to flourish.
Despite improvement in entrepreneurial projects, there is one question that still baffles many interested in the developing economies. What does entrepreneurship mean in the African context?
Entrepreneurship in Africa is certainly different from the business context in the Western world, but it is the solution to the vexing problems of people all around the world. Entrepreneurship in Africa differs from the Western world in most factors such as political differences, economic situations, labor, strategies, and more.
Here is how we can interpret entrepreneurship in the African context. Keep reading.
What Is Entrepreneurship?
Today, entrepreneurship is not specific to one place or country only. It is globally recognized and defined as serving the needs of the emerging markets and those that are underserved.
It is about finding the gaps between what people want and what people currently have or do not have, converting that challenge into an opportunity by accumulating the required resources, and presenting a viable solution to solve those challenges by creating an enterprise.
While the framework of entrepreneurship is not so different, the needs, challenges, and market demands differ greatly from one place to another. What people want or need in one area may not necessarily be the same thing that will satisfy people in another area.
Entrepreneurship In Africa
In terms of defining entrepreneurship in the African context, there are no extensive ways of doing it. There are millions of people who have started a business in Africa. There are no facts to define the exact framework of entrepreneurship as it is currently present in Africa.
According to stats, about 22% of the working-age population in Africa is venturing into entrepreneurship. The rate of entrepreneurship varies in different countries, with about 9% in Algeria and 40% in Nigeria and Zambia. The rate of entrepreneurship in Africa is one of the highest in the world.
The high business activity is due to a few different reasons. The countries with poorer populations tend to tilt more towards entrepreneurship mainly because the job market is in bad condition, and there is no other way to run a household than to start a business. So, the business activity in different countries varies with the income level, with poor countries faring well in entrepreneurship out of necessity.
What Group Forms The African Entrepreneur?
It’s not only the big corporations that constitute all the businesses in Africa. The continent has startups, family businesses, and small enterprises all around.
About 27% of Africa’s adult and female youth have started their business. There are more females than males venturing into business than males. This rate of female entrepreneurship is higher than for females in most other parts of the world.
Family businesses also make up a significant portion of businesses in Africa. Although, female-led and family businesses tend to generate less revenue than other types of enterprises.
International return Africans and those residing outside the continent make another big part of entrepreneurship in Africa. They bring and send remittances as funds for startups. People returning to Africa are more likely to start a business venture than take up a job. These ventures are more beneficial to the startup economy than for family-run businesses.
African entrepreneurs face some of the biggest challenges. There is a lack of institutional infrastructure to grow and scale a business. Funds and finances necessary for a venture are lacking in the continent. Entrepreneurs have to struggle to get the right resources at the required time. The only way out, for now, is to get creative in sourcing the needed input and be persistent.