From Ideas to Actions was the theme of the UNCTAD 14 conference. Even as the delegates tried to discuss what action we should take, there was a need for consensus on a lot. Moving from idea to action may seem like a tall order, but entrepreneurs in Africa understand more than anywhere in the world. If you wait to agree with everyone before you permit yourself to act, you will be waiting a long time – nothing is ever going to happen! Thus, businesses in the continent continue to operate in less than ideal circumstances yet achieve their objectives and communities.
Africa remains open for business despite several apparent challenges that would cause entrepreneurs to give up without their determination and agility. While there are numerous issues in the continent, below are three key obstacles African entrepreneurs face and how the market is adjusting to address their needs.
Poor infrastructure:
Not to be negative, I acknowledge there are growing efforts to improve infrastructure in the continent. However, roads continue to be pathetic, and poor technological infrastructure makes it difficult for entrepreneurs to do businesses locally and regionally. Costs of getting tangible goods to market are higher than they ought to be, and service companies find it challenging to offer exceptional services.
Farmer groups are forming associations to get goods to market. The shared cost of transport for products and resources is something that an individual farmer may not do. More informed farmers who can source for markets directly have also played a key role in bringing farming communities together to service large orders.
For service companies, there is an increasing need for business hubs. Not only because the cost of offices is formidable despite the increase in construction of business buildings (and apartments), but there is a growing need to get support in a fast-changing global world. Many service companies find that their competitor is no longer their neighbour who offers the same service but more giant international. The boundaries between who large firms serve and who the smaller company does have become hazy. Hence, the small business has to be creative in getting offices and the brand they portray.
Hubs meet this need by providing the ideal business environment for small service businesses. They offer the high-speed internet connection required and access to information, which means a small business can play at an almost level playing field with their bigger international competitors.
Cheaper imported goods;
In some African economies, governments have not put in the legal framework to protect local producers. Local products tend to be more expensive than imported products. The most significant opportunities in the continent serve the bottom of the pyramid. Lower priced, high-quality products mean a larger market share. They are repackaging quality products in smaller quantities so anyone can afford them. Products in Kenya are said to address the ‘kadogo’ (small) economy continue to be very attractive for their target customers.
Inter-regional trade is also increasing. For example, Kenya exports more than 30 per cent of its exports within the continent. This export encourages regional business and local industries, as the requirements to export regionally are not as complex as those required for European and American markets.
Addressing the need for reasonable pricing in local markets is also being done by re-evaluating how entrepreneurs source products. This sourcing of products should not compromise quality. Innovative business groups use their WhatsApp and Telegram platforms to effectively source in bulk for products. Dynamic groups that pre-screen their members allow smaller importers to make bulk purchases of products, so they do not need to go through intermediaries.
Skills and Know-how;
With a fast-changing world and an education system that does not support industry, business skills and know-how continues to be a significant gap in the market. Associations and consultants are a great source of business skills and continuous education; however, this does not replace the real-life experience of individual entrepreneurs. There is a growing need for coaching and mentoring to enable entrepreneurs to get into the right network, find investors, and the right business networks.
Many cities buzz with entrepreneurs going to or from one networking event or another every morning and evening. Such networking events also provide information on government policy, new laws and regulations. This knowledge enables entrepreneurs to meet the standards in their industry and take up opportunities. Some of these associations also negotiate on behalf of their members for skills transfer with partners.
As the world moves from ideas to action, there continues to be a tremendous demand for Africa.
