Kathy Gibson is at the World Economic Forum on Africa in Cape Town – Stakeholders have agreed a way forward for the Africa Growth Platform, the initiative announced last week to help African start-ups to grow and compete in international markets.
Elsie Kanza, head of Africa at the World Economic Forum, comments: “Two years ago we were talking about inclusive growth, with the major concerns still being the investment wasn’t translating into new jobs.
“In collaboration with the African Business Council, we have applied our minds and the minds of businesses, as to how we can support the small and medium enterprise (SME) ecosystem, which is where most jobs are created.
“This snowballed into the AGP.”
The AGP is a World Economic Forum initiative that has identified three ways of helping to grow SMEs.
The first is by securing commitments from governments to implement policy reforms aimed at stimulating and accelerating business growth.
Secondly, it aims to build a community of investors, whether private investors, foundations, multilateral institutions or corporate intrapreneurs to enable better coordination and pooling of resources that could facilitate larger subsequent rounds of funding.
Third, the platform will create and sustain a community of start-up businesses themselves, promoting collaboration and sharing best practices.
The need for an innovative approach to helping Africa’s start-ups reach the scale where they become sustainable is backed up by data. Two-thirds of Africa’s 420 million young people are currently unemployed which highlights a clear need for new solutions to drive employment growth.
At the same time, Africa’s young population is well-endowed with entrepreneurial spirit with early-stage entrepreneurial activity 13% higher than the global average.
However, due to insufficient support and infrastructure, the region’s start-ups are 14% more likely to fail than those elsewhere in the world.
“Africa’s entrepreneurs are its greatest economic asset but spirit and resourcefulness alone are not always enough to help them succeed. Too often start-ups and innovative enterprises fail needlessly through lack of additional finance or overly burdensome regulations,” says Kanza.
“The AGP brings together all the actors; governments, investors and the businesses themselves necessary to create an environment where they can fulfil their potential in terms of growth and employment.”
Founding members of the AGP are Alibaba Group, AT Kearney, Dalberg Group, Export Trading Group, US African Development Foundation and Zenith Bank.
“The really exciting part of this initiative is that it puts entrepreneurs are the heart of it, with a collection of actors will to combine forces to reach 1-million small businesses and help them grow,” Kanza says.
To create this momentum, the focus will initially be on quick wins, she adds, looking at what is working in the region, and replicating them
These include issues like ease of setting up a business, paying small businesses timeously, and support structures like start-up barns.
Further down the line, infrastructure remains an issue that needs to be addressed., Kanza says.
Theo Sibiya, partner and head of Africa for AT Kearney South Africa, explains that his company believes in the potential of Africa. “And we are interested in playing a role.”
The second key area is around youth empowerment, where he believes new technologies can play a major role.
Technologies with the mo0st promise include those associated with the Fourth Industrial Revolution (4IR), like 3D printing, artificial intelligence and blockchain.
“We are allowing entrepreneurs t identify the technologies they believe will empower them.”
Kanza agrees that the youth, coupled with 4IR, offer the biggest opportunities.
“As the youngest continent if we can empower the youth – who don’t have to unlearn things and can be ready for the new era – we can move quicker and unlock quicker results.
“We need to unlock this, get them excited and fired up.”
She points out that the WEF is playing the role of a conductor in this initiative, helping stakeholders to align their efforts.
“The key will be to expand the actors to align their interventions. It is all about impact, the more of us who work together, the more we can get done,” Kanza says.
Leadership will be vitally important, she adds. “We believe in this continent, in the youth, and moving from talk to action.
“It means that people have to be ready to be counted, to step up. We need more leadership where people don’t just stare at problems but engage with them.
“The more of us that work together, the better we will be able to solve the tough intractable challenges.”
According to Brian Wong, vice-president: global initiatives at Alibaba Group in the People’s Republic of China and a Young Global Leader, his organisation believes that Africa is at a crossroads, and the time is right for a new paradigm for the continent.