According to Win Naudé, Global development is entering a phase where entrepreneurship would increasingly play a more important role, particularly in some countries.
Naudé, is Senior Research Fellow at the United Nations University’s World Institute for Development Economics Research
He said in least developed countries, where aid dependency is high, donors have been shifting the emphasis in development cooperation towards private sector development since most of the population of these countries consist of youth with little prospects of gaining employment with decent wages.
“Promoting youth entrepreneurship…has become a vital policy objective of many development organisations and donors,” he noted.
Ghana is one of such countries where there has been an increasing focus on encouraging the growth of entrepreneurship.
President John Dramani Mahama, has on a number of occasions urged young people to go into entrepreneurship instead of waiting to be employed.
He gives practical meaning to Made-in Ghana products by patronising products made by young entrepreneurs.
President Mahama endorsed a horseman shoe made by Tonyi Senayah during his 2014 State of the Nation Address in Parliament.
Addressing students of the University of Cape Coast recently on “Rising Opportunities, Entrepreneurship & A Changing Ghana,” he encouraged young people to take advantage of opportunities created by government to start or grow their businesses.
Entrepreneurship in is gradually growing. With more than 50 per cent of the population being youth, unemployment is a big issue in the country with a number of them leaving the universities and not finding jobs.
However entrepreneurship is presenting an alternative to traditional job creation that is not just about road construction, civil service employments or police recruitments.
“Now we’re seeing young people looking to start their own initiatives and so entrepreneurship is growing because there are visible evidence of people who are already doing it and people who aspire to be like them and we’re seeing globally.
“The rise of a millennial generation who are more inclined towards entrepreneurship,” Mr John Armah, Executive Director of the Ghana Centre for Entrepreneurship, Employment and Innovation (GCCEI) noted.
There is a bit more innovation within the ecosystem, with the advent of hubs, co-working spaces, increased penetration of Venture capital firms in Ghana and more open collaborations between corporate Ghana, industry and donors to support young entrepreneurs to start their own businesses.
The questions that beg to be answered in light of this are: is there any improvement in the challenges that entrepreneurs have to grapple with to start and sustain their businesses, including difficulties with business registration, access to good human resource, and access to appropriate credit? Is Ghana’s business environment as conducive for start-ups as to be attractive to the youth?
According to Mr Armah, there are still various macro level fundamentals that are challenging to start-ups in Ghana, including interest rates and lack of ease in accessing capital.
Other obstacles include lack of capacity to access to finance and markets, lack of skills to grow and to lead teams, while others lack the passion or do not have good products.
He noted that another major challenge is that of capacity; as to whether young entrepreneurs have the capacity to build ideas from the idea stage into successful businesses.
“Also we are an emerging frontier when it comes to the start-up ecosystem so we’re not so conversant with what works or doesn’t work and corporate Ghana does know how to tap into the opportunities that exist.
“There are a lot more dreamers than thinkers and problem solvers, but we’re also seeing a lot of innovative solutions coming up.”
Mr Armah said although there is a big disconnect in the entrepreneurship landscape, there are gradually more open collaborations such as the Stanbic Bank App Challenge, Vodafone support, MTN Apps Challenge and a number of others.
There are also skills training programmes such the one done by the GCEEI through its ‘How to be an Entrepreneur campus series’, Business Finance Workshops, Technoserve Enhance Programme and others, to build the capacity of many young entrepreneurs.
“It’s not all gloom,” he maintained and stated that for every problem entrepreneurs face in Ghana, there are solutions waiting to happen.
“We need disruptive, scalable ideas, which can drive the local economy in terms of innovation and solve real time challenges.”
The Ministry of Trade has been encouraging more start-ups to look at equity financing as a solution to the challenge of access to finance.
Equity Financing is essentially the sale of shares in an enterprise to raise funds for the business.
Mr Armah said while equity financing is the future, start-ups need to show value to attract that kind of financing.
Also availability of equity finance is largely based on ease of doing business in a country and availability of capital.
Thus, the question to ask is whether the high tariffs and increased costs of doing business in Ghana could attract private people to want to invest in Ghanaian start-ups.
He said some investors may want to invest when the traditional modes of investment have not worked for them.
“They may consider treasury bills or bonds here and there but most people are now inclined towards establishing new and multiple streams of income thus looking for businesses to support that can scale in about a year or 18 months.
“The future is bright. Equity financing is the future, private equity is growing in Africa. Last year, the rate of investment in Africa, particularly for start-ups was encouraging.
We must continue to invest in start-ups to products that are bankable so it can attract people within the rising middle class and working class and high net-worth individuals, corporate and others to support them because of the value of the idea and the solution it offers to the many problems Ghana and Africa faces in the developmental journey,” he stated.
Mr Robert Jackson, United States, in an interview said although there are many challenges, chief among them is access to finance.
He said there is also a cultural challenge to entrepreneurship in Africa; to wit, are people willing to take the risk and start a business?
Referring to an analogy made by a panellist at an event on entrepreneurship organised by the embassy, he said: “We need to think of a new undertaking like a rocket ship, you’re either gonna get on the rocket ship and go into space or you’re gonna stay on the ground.”
“There’s no in between,” he said, explaining that entrepreneurs have to be very motivated, inspired, have to have a vision and be willing to see that through.
“Those are the two key issues: have a clear vision and be willing to ask people for the financing.”
Mr Jackson noted that it is important for entrepreneurs to be able to learn from their failures, which are bound to happen and forge ahead.
“A key point is, often these enterprises will fail; the challenge is, do you learn from your failure or do you give up? The most successful entrepreneurs all failed multiple times and they picked themselves up, applied the lessons of those experiences and they moved on,” he stated.
He said though there is culturally a heavy reliance on government, with people wanting free education, electricity and others, it did not pay for itself.
“You have to find people who are going to create the tax base, provide the new products and new services in a new way for the economy to grow and for people to be able to get the public benefits that they want”.
Linda Etim, USAID Assistant Administrator for Africa, expressed the need for support systems with entrepreneurs serving as examples and mentors for each other as was the case in Cape Town, South Africa, where the Global Entrepreneurship Summit, where there were start-ups.
She said the entrepreneurs could not have come far without that ecosystem.
“We heard from a lot of the young Ghanaian entrepreneurs present at the forum that there’s the need for role models and for the development of that ecosystem and support network here,” she stated.
Speaking on how put in those ecosystems, Ms Etim maintained that entrepreneurs have the power to connect with each other and really give those examples to each other. “
It’s also about publicising the stories and what you’re doing through media is really important, so that these stories actually get out there so people can know that success is possible.
People need that acknowledgement and parents and families need to know that if they put some investment into supporting people, that it actually might come out with something good.”
She also reiterated the importance of not waiting for government to do everything. “What governments, such as the US Government can do is providing a networking platform but the work is all about young entrepreneurs actually connecting with each other”.
In light of the many young people in Ghana who are starting their own businesses, addressing social challenges and the many others who are nursing ambitions to go into entrepreneurship in Ghana and their determination in spite of the daunting challenges, I can boldly say the future is bright. Maybe in the near future, Ghana would have a semblance of a Silicon Valley.
A GNA feature by Belinda Ayamgha