Tue Sep 26 11:07:08 SAST 2017

Entrepreneurship as a tool for development in Africa

2017-03-09 15:27:05.0 | Sandile Swana |

Over the past 20 years, Africa has been steadily growing and is expected to remain as one of the fast growing regions in the near future.

Picture credit: David Harrison

Central to this is entrepreneurship and the role of entrepreneurs.

The idea of entrepreneurship proposed here is one where African people play a key role in economic activities. They study and practice entrepreneurship in a focused fashion in order to control their own economic destinies.

In this way, entrepreneurship becomes a conscious lifelong programme of mastering capital to improve productivity and quality of life for the largest number of people.

An entrepreneurial organisation is one that has grown revenues, jobs or profits in the past five years by several multiples of GDP growth.

These organisations grow large by introducing new products, services and sometimes even undermining existing ones.

Cellphone groups MTN and Vodacom represent this picture in South Africa.

On the other hand, fixed-line provider Telkom was found to be unresponsive to the growing demand for telecommunications services.

Typical entrepreneurs include Strive Masiyiwa, Aliko Dangote, Patrice Motsepe, Kaizer Motaung, the Kunene brothers, Richard Maponya and many others running multimillion-rand enterprises across the continent.

Serious economic development starts with savings rather than consumption.

The Chinese have been saving 30% of their disposable income in their personal capacities and as families since 1978. As a nation their savings rate is around 50%.

This saving's rate has spurred Chinese economic growth.

Similarly in Africa, many entrepreneurs, including Dangote, relied on family savings to start their own businesses.

Families, community saving schemes and burial societies need to find meaningful ways to create a pool of capital to invest in family businesses and emerging entrepreneurs.

This requires the creation of robust capital raising structures beyond the traditional avenues.

Collaboration and professionalism are two key ingredients for building an entrepreneurial culture and base that can sustain decent living standards for Africans.

Swana is a lecturer at Wits Business School, University of the Witwatersrand. Source: http://theconversation.com/

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