ENTREPRENEURSHIP DREAMS WITHOUT FUNDING?
Money makes the world go round, more important your entrepreneurship dream rest heavily on funding. Without capital or investors, you can kiss your entrepreneurship dream goodbye especially if you are in Africa and an African.No bias meant but the truth is that is not easy to get loans from the banks and if you do the rates are a nightmare that will haunt you for the rest of your startup. So, if you don’t come from a wealthy family or have a wealthy uncle somewhere who is ready to support your dreams then your counterpart European or America have a better shot at succeeding as an entrepreneur than you. Why? because funding is very important and they have more chance of receiving funding to embark on their entrepreneurship journey.
In December 2019, I was on a short business visit to Ghana, mainly to survey the business atmosphere for young entrepreneurs in the country. I knew entrepreneurship was growing on the continent and many highly driven young people on the continent are seeking funds and investors to start their entrepreneurship journey. Before I went to visit Ghana, a friend discussed a business idea he was working on with me and told me he needed me to invest in the business. He told me about the difficulties involved in finding seed capital for them to start their business, and that made me want to invest but also try to understand why it is so difficult to find start capital.
Without capital or investors, you can kiss your entrepreneurship dream goodbye especially if you are in Africa and an African.
THE DIFFERENT LEVELS OF ENTREPRENEURS:
The continent of Africa is now seeing an increased flow of entrepreneurs to its shores. But not all of these entrepreneurs are in any case the same. Their backgrounds vary in many ways, and I guess one can speculate their success rates will also be. The three main groups are the local entrepreneurs, the Africa-diaspora entrepreneurs and the foreign entrepreneurs. The level of access, exposure, support and eventual success differs significantly between these three groups. When it comes to entrepreneurship, implementation is far better than just having ideas, and the most critical aspect of being able to start is sometimes dependant on the funds to start.
Being an entrepreneur myself, I know how important access to funding is for entrepreneurs and how no access or limited access can frustrate the creativity and innovative processes. Out of these three groups of entrepreneurs on the continent, the "luckiest" ones are naturally the Americans and the Europeans and other foreign nationals. They are also the group likely to start and grow the largest forms of businesses because of the home-base support they enjoy. Most foreign entrepreneurs on the continent enjoy the three keys that I think accelerate entrepreneurship success. An active network, organisational support and team structure. Depending on a reliable network can be a definite advantage in many ways, and that is something that most native entrepreneurs don't have. Foreign entrepreneurs in Africa may have access to a supportive establishment that can help them in their pursuit for funding, mentoring, partnering and even government subsidies.
The problem of cultural-distancing works in their favour as Africans are more welcoming and less regulated. Compare that to an African seeking funding from Europe and the story changes right away. Even African diaspora's are not easily trusted, and their capabilities are scrutinised as to whether they can successfully embark on any large scale entrepreneurship endeavours. Research shows that foreign entrepreneurs and business owners in Africa receives more funding and investment than the local and diaspora entrepreneurs. The lesson here is that track record is essential. When people are known to be good at what they do, over time, they will be trusted with microscopic scrutiny while if one has a negative track record, it will also follow every decision made concerning them. However, I think it is in the interest of the EU, for instance, to provide a safety net for banks that are willing to fund African diaspora entrepreneurs because the old-age stigmatisation still affects the continent and her people on a larger scale.
The problem of cultural-distancing works in their favour as Africans are more welcoming and less regulated.
IS STIGMATISATION STILL THE PROBLEM?
While the people behind some of the well-known start-ups in Africa are Africans like Iyinolowa Aboyeji from Flutterwave and Andela, the story is not the same for all African entrepreneurs in Africa. My personal experience as African-European who want to start a business in Africa has not been smooth sailing in terms of funding or investors. People in the developed countries still look at Africa as a backward, non-progressive continent with corrupt people. A generalisation is never good, and Africa could be a country, but it is not a country. There are different situations and conditions with regards to the 54 states(Countries). Yet there is a continuous undermining of intellectual abilities of most Africans. However, there is evidence of successful entrepreneurs from the continent who are thriving against all the odds. I once went to a fund-raising event in Belgium in the hope to attract some attention to the growing opportunities on the continent of Africa only to find out that no one was willing to hear me out and the look when I mentioned my business interest was for Africa.
Even nobody was ready to have a chat with me. The organiser who spent a vast amount of time talking to other will-be entrepreneurs gave me 50-seconds slot, and I will contact later, which of course was never going to happen. No hard feelings because of at this stage, I have come to understand people make decisions and draw conclusions based on the information provided to them. So imagine all the negative images and representation about Africa in the West. Then you can understand if the president of the free-world thinks Africa is a hell-hole, can you blame an investor in Belgium who has no idea where Africa is located?
While I am not interested in blaming others and pointing fingers, I think the European investors need to wake up to the new generation of Africans. Albert Einstein wrote, "Everybody is a genius. But if you judge a fish by its ability to climb a tree, it will live its whole life believing that it is stupid." It is about providing people with the opportunities and tools to develop their innate potentials. I spoke to a European colleague about this issue, and her remark was worth notice. She said, "I think most people in Europe think Africa is corrupt and therefore, should only trust Europeans over African." People like to generalise like I am doing again, and you will find generalisation in every corner of the world. But that does not justify generalisation, especially in its negative context. In previous years, Africa at large depended on America and European aid which never solved the significant problems ordinary people faced because the help never reached them as it should.
Today, most Africans don't want to hear the word aid or charity but are looking for ways to undertake activities that will bring wellbeing to their nations, and some are looking for the opportunity to do it together or lead the initiatives themselves. To even-out the playing-fields for local and diaspora African entrepreneurship, access to funding from the West is crucial. Organising the entrepreneurship programs for Africans in the diaspora and equipping them to start businesses in the native countries is essential for the future of Africa but also glorious for their adopted-nations. Most diaspora entrepreneurship programs I have participated in Europe ends for most diaspora participants in the same way, how do we find funding for our project? European multinationals, co-operations, and SME's are developing businesses in Africa and are looking for ways to expand their activities as some of their colleagues have already done. I think the way to go is to get diaspora Africans involved as they can serve both interests better.
WHAT IS THE WAY FORWARD?
If anyone cares about equality and the fact that Africa needs Africans solutions, they cannot overlook the need for funding and financial support from the West. These fundings must not go to government institutions but to the private sectors. European countries should utilise the African diaspora and empower them to be able to help their entrepreneurs in their native countries. This will be an accurate record of partnership and fairness. This will be a real sign of inclusion and respect for both parties and lead to more trust among the continent. Most entrepreneurs in Africa need tiny initial capital injections. Because of this, I have been able to support three entrepreneurs in the last 2years. And all of these start-ups are doing well amid the challenges of Covid-19. Covid-19 will make things even tougher for the continent of Africa and her people. The culture of dependency must become a culture of enablement. Africans looking to enhance peoples lives by providing services and product need support to be able to do so. If the effect of the COVID-19 can be reversed over the coming years, a strong sense of entrepreneurship at levels must be promoted and supported.
Africans, especially the young generation, should get more in-depth into entrepreneurship. If by chance or miracle, funding becomes less of a problem with the help of Europe, this in return will stop the illegal immigration, deaths at the seas, human-trafficking and the dehumanisation of Africans in pursuit of a better life.
The media in Europe must stop its biased representation of Africa in the press. Africa is doing its best to move away from the yesteryears, and developments are in progress. NGO's must stop the house-fly images for donations. Africa has problems, correct, but no one has gotten better from selling the issues. It is time to enable the problem-solvers on the continent so that they, in return, can provide solutions to their communities. A co-operation between investors, funders, European companies should help in harnessing and utilising the diaspora and home-base African minds for the good of Africa and Europe. We advise companies to start thinking of how they can recruit diaspora Africans to start their businesses in Africa and how they can develop diaspora and local talents for the success of their businesses. Yabs Network can assist you in finding African diaspora talents who are ready to work and represent your company on the continent. Don't hesitate to contact us if you have questions.
Everyone can help entrepreneurs in Africa, from 6figures investors to as little as 10's of Euros can go a long way to help an entrepreneur in Africa. Let us support them, give them the opportunity and even the privilege just as entrepreneurs coming from better, support countries. Africa has always shared its resources with the rest of the world. Wouldn' it be great if, in the century of Africa, Africans drove growth on the continent of Africa?
Footnotes
Inspirations: https://www.bmz.de/en/countries_regions/marshall_plan_with_africa/contents/10_starting_points/index.html
https://www.theguardian.com/business/2020/jul/17/african-businesses-black-entrepreneurs-us-investors