Barriers toentrepreneurship Much research has been conducted on the barriers to growth inAfrica. Many obstacles stand in theway of entrepreneurs on the continent. According to the African Union’s Africa’s Development Dynamics: Achieving Productive Transformation 4 , they include a lag in innovation and technology, weak regional integration and insufficient logistics infrastructures, an unattractive business climate, and financing difficulties. The majority of respondents to our survey (61%) say that the biggest barrier to becoming an innovator or entrepreneur is access to capital, followed by government policies and bureaucracy, corruption and lack of business transparency.
No access to capital / financial system
Government policies / bureaucracy
Corruption / lack of business transparency Inadequate education system / Insufficient skills State of our economy / lack of diversification Lack of understanding of the importance of innovation Lack of business / technology infrastructure
Risk-taking is not valued
No role models / no networking opportunities
Society does not value entrepreneurs
Lack of business know-how or tradition
Fig. Respondents’ barriers to becoming an innovator or entrepreneur
Prudence Nonkululeko Ngwenya, Head of the Division of Human Resource and Youth Development at theAfrican Union Commission (AUC) shares that the fundamental gap of matching theAfrican resilience and innovation aptitude with funding, capacity development and knowhow requires stronger collaboration between the governments and the private sector. She says thatwhile theAU iswell-placed to sense these gaps and connect stakeholders, it is the public and private sector entities in Africa that must take greater strides to create the enabling environments to incubate, accelerate, scale and fund homegrown innovations. Meanwhile, OdyAkhanoba, Manager of Strategy and Innovation, Afreximbank, says that COVID-19 has accelerated and intensified the need for development finance to step up their proposition to enable Africa’s vast youth populations to leverage technology and scale homegrown innovations. He adds that they have a role to play in making risk capital more readily available and to be able to deploy risk equity into innovation in a fast-changing world. In this regard, the commencement of the AfCFTA, which was due to launch officially in July 2020, but is now set to launch in January 2021, creates expanded opportunities for scaling African innovation and start-ups. The extent to which it will support cross-border African enterprise, however, hinges on many variables.
4 AfricanUnion, Africa’sDevelopment Dynamics: Achieving Productive Transformation, 2019, page 200.
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