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Training declared a major way forward in nurturing start-ups

Sunday July 26 2015
m-kopa

US President Barack Obama talks with June Muli, head of customer care at M-Kopa, about solar power during the Power Africa Innovation Fair on the sidelines of the Global Entrepreneurship Summit in Nairobi on July 25, 2015. PHOTO | AFP

Lack of access to funding, training and networks are the key challenges African entrepreneurs are facing, limiting their ability to compete globally and utilise the available global market opportunities.

A survey of 1,000 business owners in five African countries — the Democratic Republic of Congo, Ghana, Kenya, Nigeria and South Africa — shows these are major challenges for African youth and women entrepreneurs.
The survey was conducted by the Global Entrepreneurship Network and the US State Department throughout sub-Saharan Africa ahead of the  Global Entrepreneurship Summit (GES) held in Nairobi, Kenya.

It indicated that there is a strong desire for more training resources, with training programmes and entrepreneurship courses in schools being the most popular responses to a question on how governments can help citizens start businesses.

US President Barack Obama in his speech at the GES on Saturday at the Unep headquarters in Gigiri, Nairobi, noted that women entrepreneurs in Africa lack access to funding, training and networks and both a global view and exposure.

As a solution, President Obama announced that three entrepreneurship centres in Kenya, Mali and Zambia, representing the three African regions of East Africa, West Africa and South Africa respectively, will be set up.

The three countries will also benefit from a $981.6 million fund to support women entrepreneurs.

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“If more global capital could see beyond prejudicial blinders, the great progress of the past 10 years could harness potential,” said President Obama, adding that the world has to invest in human capital.

“This is a neglected market; US government policy can help, but it is all about exposure. Do not be distracted by the stereotypes being promoted about Africa, come invest and partner,” he told the summit delegates.

According to Peter Kiguta, the East African Community Director-General in charge of Customs and Trade, the Community will use the new women’s centre to be set up in Nairobi as a component of its US- EAC trade partnership to lobby for resources to bridge the funding gap in the region.

“Although the EAC partner states have an honest brokerage platform for women entrepreneurs that enables women to network through regional and international business conferences and summits, the issue of resource mobilisation has been a challenge to the Community in its effort to support entrepreneurs in the region,” said Mr Kiguta, adding that having women entrepreneur centres in each of the regions in Africa is a good opportunity for the region to mobilise resources to finance these entrepreneurs.

“It is an equal continental trade opportunity created across the continent,” he added.

Also announced at the GES was the setting up of the Women’s Venture Xchange-Africa initiative, which will train promising young, female entrepreneurs in Africa to help them grow their startups and reach new markets throughout the continent.

The initiative will serve as an exchange and mentorship programme for high potential women entrepreneurs around the continent.

Through the existing networks and connections of the Global Entrepreneurship Network (GEN), the Case Foundation, Mara Foundation and the US State Department, the pilot programme will test the validity of the concept, leveraging well-established networks in more than 35 countries to scale up the programme rapidly throughout the continent.

“Women’s Venture Xchange-Africa offers a more relevant and effective opportunity for emerging women entrepreneurs in poorly supported ecosystems in Africa,” said Jonathan Ortmans, president of the GEN.

“It allows them to learn from peers and mentors within Africa’s more mature start-up communities rather than from another distant continents.”

The Xchange will filter and select four female founders to spend one month in other African cities where they can develop their businesses more rapidly through collaboration and access to a new entrepreneurial ecosystem.

The entrepreneurs will be supported by Mara Mentors, the GEN community and other partners while in a host city. The pilot programme will be hosted in  Nairobi, Kenya, and Kampala, Uganda.

“Africa is full of promising young women entrepreneurs who don’t lack ideas, they lack opportunities,” said Ashish Thakkar, founder of the Mara Group and Mara Foundation. “I had access to these opportunities as an entrepreneur learning the ropes in East Africa and I want young entrepreneurs to have even more, to enable them to build thriving businesses.”

Denis Karera of the East African Business Council (EABC) said the problem of funding has sidelined most entrepreneurs from participating in key regional projects like the Northern and Central Transport Corridors infrastructure projects.

“Regionally we have been trying to create synergies in resource mobilisation, but it has been a challenge to get funding from the key partners like the US,” says Mr Karere.

“Some of the funding comes with stringent measures; in the case of the US, you have to partner with them to get funding for a project. In the end, governments and the private sector resort to seeking the funds from China, where no conditions are given even though there is some level of risk attached to it,” he said.

He noted that business assistance from governments of African countries is weak and inadequate. 

“The lack of financial support policies for business needs to be addressed by respective governments if business startups and entrepreneurs are not to fall far behind their counterparts in other parts of the world,” said Mr Karera.

At the regional level, he said, EABC is pushing governments to ensure that local firms are also participating in the key projects despite funding by external partners.

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