Where is the Support for Africa’s Small Businesses?

When considering the might of countries, most of us initially gauge their military strength before even thinking of their economic might. The moment economic strength is considered, the picture changes dramatically; for it is true that the richest countries are not necessarily the strongest countries.

Africa is a bit peculiar in this regard. Africa’s super powers are generally the African countries with the largest standing armies, but not necessarily the richest countries. Which begets the question, how are they able to amass their weapons and sustain their military. That is a different topic for another day.

The countries in Africa that are considered the wealthiest have the highest GDP (Gross Domestic Product) or PPP (Purchasing Power Parity)  –  all jargons to me because people can’t eat GDP.

Depending on your source, the wealthiest African countries are: Nigeria (Oil), South Africa (Gold, Diamond, Platinum), Kenya (Agriculture, Tea/Coffee Exporter) Libya, Mauritius, Namibia (Diamond), Gabon, Tunisia (Mining, Tourism), Algeria (Oil, Iron, Lead, Copper, Zinc, Mercury) and Botswana.

Of all these countries, which of them actively support Entrepreneurship or small businesses? I have highlighted Kenya above because their major income comes from Agriculture, and they are one of the largest Tea and Coffee exporter, this inadvertently makes them a nation of small businesses. But apart from Kenya, most of the listed African nations depend heavily on Oil, Tourism, natural resources and minerals like Diamond and Mercury.

Majority of these countries will chase every avenue, milk every resource to get on that list, but they forget the most important natural resource – People, human beings like you and I with intellect, instinct, creativity and businesses that if supported will replace any natural resource.

Africa’s blessing is truly its Achilles heel. Because it is blessed with crude oil, diamonds and some unbelievable minerals ensures that all of their governments pile all their efforts in mining these resources at the detriment of others. Some people will say rightly so; perhaps, but these resources can be chased in addition to others. For example, Nigeria is known globally for its oil….. that’s about it! But there are some stunning locations in the country begging for the tourism industry to be developed in line with (or in addition to) Oil. The country is also rich with other natural deposits like tin, iron ore, coal and limestone

The same can be said of Gabon, who is now experiencing declining oil production as a result of it’s over- reliance on the product at the expense of other resources.

Small businesses in majority of African countries play no role in the countries’ economy and are not in the plans of African governments. The irony is that the continent is full of thriving small businesses. Because education is for one reason or the other not within reach of many, therefore in order to survive most start a small business.

When you think of it, the amount of small businesses PLUS innovations that emerge from Africa is just enough to launch most African countries on the global stage. The potential is huge! Why then is Entrepreneurial spirit not encouraged?

Some of the richest individuals today are African, they are all entrepreneurs with thriving businesses, most of these businesses started as a small business – isn’t it ironic then that support for small businesses is virtually non-existent? I must say however, some great Africans have created Foundations to assist entrepreneurs – like Tony Elumelu of Tony Elumelu Foundation and Asante Africa Foundation. But these are just a tiny drop in the ocean.

Innovation in Africa is another matter. There are some truly inventive Africans with some really cool innovations. These innovations are mostly celebrated in Africa however, with little or no support from the government. I must single out Kenya and South Africa and give them credit; they are countries that have really been innovative with their inventions serving their people on a daily basis. Alarm fitted Television, traffic robot etc.

Limitations have a way of making people creative – some of the inventions coming out of Africa these days are nothing short of magical. Urine Powered Generators by 14 year olds in Nigeria is an example. Charging shoes is another.

I propose a Ministry of Small Businesses in all countries in Africa; with a department of Innovation and Creativity heavily funded by monies generated from the oil and minerals these countries chase like crazy.These Ministries’ only concern should be for economic growth and the promotion of skills and education to promote trade and entrepreneurship by helping people to start and successfully grow a business.

Without that, I suspect that this issue will continue at a detriment to Africa.

Departments for Entrepreneurship and Small Business is as important as those of Health, Education and the Military. Since education will not be available to most people, why not empower them to start a business and contribute significantly to the economic growth and positive social movement of the country?

 

Kole Obasa

www.thiskoleobasa.com

 

 

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7 thoughts on “Where is the Support for Africa’s Small Businesses?

  1. Hi Kole

    Very interesting article. Is the 80:20 principle actively in play here?
    What are the richest 20% doing with their wealth? What steps are being taken to alleviate poverty and educate those who are currently not receiving any education? Am I right in assuming that wealth doesn’t seem to be filtering down to the lower socio-economic groups so they derive no benefit whatsoever?

    May be you might be able to cover these in future articles.

    Regards

    Michael

    1. Its always been the case particularly in the developing African states. Wealth just does not seem to filter down. Its always the case, but the solution is simple – empower entrepreneurs to create new wealth.

      1. Hi Kole.
        Just read your reply. Why aren’t those who are in power not recognising that entrepreneurs can act as catalysts to drive the African economies forward and improve living standards? In your opinion how can governments be motivated to take such steps.
        Regards
        Michael

  2. It’s always been a much more successful tactic when pre-existing government and educational structures are used to tackle social issues. Take for example graduating students write dissertations before leaving university; why can’t the government working with the university try and tackle energy crises in Nigeria by having graduating students research wind and solar alternative energy as their final year dissertations and fund them directly. With an incentive such as greater financial allocations based on results for the respective university departments and grants for the budding entrepreneurs to start small companies that will work directly with the government.

    1. I like the idea of govt. grants for budding entrepreneurs. There are many ways to skin a cat, unfortunately, very little is being done in that continent to assist small business owners. When an entrepreneur struggles by himself and becomes successful, the same government will laud him, thats the irony.

  3. hi, this is a very interesting article, actually I am doing an MBA research on business development services supplied to micro and small entreprise, if there’s any books you can advise for further reading, it will be very helpful. thank you. reply here alitaas1@hotmail.fr

  4. An excellent well considered article. There seems to be a need for a co-ordinated effort by African governments to encourage the growth of diverse SME’s. The question is where is the imputus going to come from? Is there too much internal governmental self-interest that is failing to recognise the important economic value that entrepreneurs can generate in their own particular country, other African nations and on the global stage? The mind set needs to change but how can this be done? Should the intiative come from the United Nations? Regards – Michael

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