Why youth and women enterprises fail in Africa

Monday June 19 2017



Prof Michael Chege. FILE | NATION MEDIA GROUP

Prof Michael Chege. FILE | NATION MEDIA GROUP 

By KEN WALIBORA in Nairobi

Informality has been singled out as a major setback for youth and women’s business ventures in Africa.

Presenting the keynote address during the Partnership for Economic Policy conference at a Nairobi hotel on youth and female entrepreneurship, Prof Michael Chege, a renowned policy consultant, said in Kenya for instance, nearly half of all start-ups disintegrated before one year.

Only 5 per cent went beyond 15 years, he disclosed.

Prof Chege, clarified that it was not the lack of credit facilities that led to the more than 46 per cent sustainability failure of new business ventures by youth and women, but a lack of coordination, registration and preparedness, all of which were related to the lack of formality in the business environment.

Trial and error

However, Prof Chege argued that while failure could not be celebrated, it was also inappropriate to fear it.

Business entrepreneurship, he maintained, often succeeded after a series of trial and error and therefore youth and women should not be discouraged by initial bad results.

It was vital, the don said, to know where previous attempts failed and strategise on how to avoid the same pitfalls in future by trying new approaches to business.

Prof Chege said Africa held tremendous promise with its average entrepreneurs age being 31 years old compared to East Asia where the average age of entrepreneurs was 36 years.

Dismal share

On the whole, more Africans entered business compared to their Asian counterparts, but they also outnumbered the the latter in the frequency of failure.

It would seem, Prof Chege, suggested, that the dismal share of manufacturing sector, consisting on of 11 per cent of the continents Gross Domestic Product (GDP), explained the instability of business.

He said most enterprises focused on hospitality, as well as wholesale and retail ventures, and shied away from manufacturing which was the hallmark of economic growth in the strong Asian economies.

Without strengthening the manufacturing sector, Africa would continue lagging behind the rest of the world, he said.

Public policy

Prof Chege also decried the lack of emphasis on agrobusiness, despite its tremendous potential.
The conference, attended by more than 150 delegates from 37 countries from across the world, was officially opened by Kenya' Cabinet Secretary for Youth and Gender Affairs, Ms Sicily Kariuki.

She noted the pivotal link between public policy and research and pledged the commitment of the Kenya government to consider implementing proposals from the conference to improve youth and women entrepreneurship.