Entrepreneurship in Africa is now front and center of development efforts after spending years as the poor cousin of corporate employment.
Global multinationals are now paying attention to what was once a sub-culture of people trying to forge their own path in alternative economic enterprises and activities.
Many people in the mainstream economy used to confuse entrepreneurship with the informal sector, seeing people without a corporate job as low on the business ladder; as workers eking out a small living in markets or a corner of their homes.
But in a decade, the narrative has changed. Being an entrepreneur is now cool. They are viewed as dynamic and adventurous, open to taking risks. They are no longer shunned by the workplace, but sought after as the number of success stories grows and big money chases small enterprises with good ideas.
There are a number of reasons for this. Technology is the biggest one. Many entrepreneurs with good ideas can now realize them through the development of creative apps, software and platforms that can link thousands of people to each other in ways that improve lives and productivity.
Africans are using technology to bridge age-old development gaps and increase efficiencies in almost every sector. Technology has become a driving force to improve and disrupt the functions of the dysfunctional state, with social entrepreneurs creating the tools to improve their communities.
Demographics is also a driver. African leaders have realized that small enterprises have a big role to play in addressing the intractable, and worsening, problem of unemployment, particularly among the youth. In many African countries, people below the age of 25 represent more than 50% of the population, and they need hope.
In an interconnected and modernizing continent, governments can no longer ignore joblessness and rely on the resilience of their people to get by. Technology has not only given people tools to work; it has also given them the tools to make themselves heard.
The growing revolution has attracted the attention of big corporations. Record amounts of money have been earmarked for entrepreneurial endeavor and companies are competing for visibility in supporting this trend. EY, IBM and others have long held entrepreneurship competitions and awards ceremonies and many more have mushroomed over time. Funding is more readily available for promising startups and good ideas.
The gap between corporations and startups is closing. It is no longer the case that a big business will not give a small, energetic company or businessperson the time of day. More and more smart executives are seeing the value in exploring ideas and options that they once eschewed because the company was not of sufficient size or had no visibility in the marketplace.
Fintech leads the way
Fintech has been a clear leader in this regard, unsurprising given the market gaps on a continent with an underdeveloped financial sector and one where more than 60% of the adult population is unbanked. In closing those gaps, they are pushing multinational companies out of their comfort zone.
A new wave of smart partnerships and investment is emerging between established businesses and new entrepreneurs.
For example, Nigerian fintech startups in the payment space, Flutterwave and Paystack, have, between them, attracted investment from the likes of Visa, Tencent, and Mastercard. Flutterwave secured partnerships with Alipay and US payment company FIS.
Nigeria’s official statistics show that the volume of digital payments in this formerly cash-driven economy grew nearly 500% in 2019.
In 2018, sub-Saharan Africa was one of the fastest-growing zones for Fintech, with investment nearly quadrupling to $357m. Startups in Kenya, Nigeria and South Africa accounted for the largest share, according to The Mobile Economy, Sub-Saharan Africa 2019 report by the GSMA.
Given the intractable problems in Africa’s health sector caused by underdevelopment and government neglect, entrepreneurs are mushrooming here too.