"Will we just go on compromising the future of our children and grandchildren for the sake of business as usual, or will we finally recognize that 2015 presents us with a wonderful opportunity-perhaps our last of its kind-in which to change the paradigm?” His Royal Highness, The Prince of Wales
2015 is the year when the MDG’s are replaced by the UN Post 2015 Agenda-the Sustainable Development Goals , when the Beijing+20 agenda is set to support the push for gender equality going forward and when the world decides on the imminent move to Carbon-Free economies. 2015 is the year to lay the foundation for Climate Action. It is the year when the World Bank End Poverty campaign renews its call for the ending of extreme poverty by 2030. It is also the year Asia Infrastructure Investment Bank starts to take shape and this is an extremely pertinent development on the global financing scene. 2015 witnessed world oil prices sink to a 6 year record low of approximately 45$ a barrel and that heavily impacted many of Africa’s economies; oil is among the top 5 exports in 18 African countries.
Earlier this year, I had the privilege of attending the IMF/World Bank Spring Summit that featured seminars, regional briefings, press conferences, and many other events focused on the global economy, international development and the world’s financial markets. One of the most striking things about the experience, for me, was the repeated mention of the following words in just about every presentation or panel discussion I listened to: Africa, Youth and Entrepreneurship. As the first of a series of posts documenting some of the lessons I picked up at the Summit, this shall focus on Entrepreneurship because of the ongoing GES 2015.
Africa has been touted as the world’s largest untapped market. With the new global mantra of “trade not aid” then my initial statement is a significant indicator of world trade dynamics in days to come. Numerous discussions at the Summit focused on the barriers to entrepreneurship in Africa and some of the key areas highlighted were: skills/capacity gap, access to finance and access to global value chains. For Africa to thrive, it must take care of the inadequacies in these three areas even as the policy makers strive to create a favourable business environment. We must begin by strengthening Africa’s institutional capacity to gather data and analyze it; provision of correct data is crucial in planning, prioritization and decision making.
The map shows the median age of countries in Africa in 2014. To understand the implications of this data, view the world’s median age here. A large youthful population is a significant asset or a time-bomb depending on the ability of the relevant players to harness this potential. The salient feature then is how does Africa tap into its Demographic Dividend to meet the skills/capacity gap and tackle the issue of youth unemployment by shifting the ideal from job seeking to job creation? How does Africa guarantee a sustainable local entrepreneurial ecosystem? Africa’s culture has been identified as being very rich. Should greater emphasis be placed on cultural and creative industry jobs like music and fashion as a potential revenue source?
For organic growth, Africa must find a way to finance its progress. This is achievable by building stronger local financial institutions; which makes businesses stronger and reduces over-reliance on foreign capital. African governments must also strive to provide a sound macro-economic environment i.e. low inflation, strong currency and regulated interest rates. However, in the short term, what can be done to improve access to finance for African entrepreneurs? Is there a possibility of a Venture Capital fund for Africans by Africans? What can be done to increase the level of financial literacy in rural Africa where the bulk of the Agribusiness potential exists? How do we ensure inclusive banking products that take into consideration property ownership patterns with the understanding that women entrepreneurs need access to credit as well?
What must Africa do to build her participation in Global Value Chains? How do we ensure more value is not only generated in Africa but also stays in Africa? We have to design a model that includes the participation of the informal sector as more than 60% of the jobs lie here. African countries must shift focus to farms and firms to pick up the slack from the extractives industry whose growth is slowing. We need to set up strong institutions to deal on an equal partner basis with multinationals. Last but not least, governments must deal with infrastructure deficits: Power, Transportation and Logistics to make African products competitive and reduce their delivery time. We must then ask, how do we get small and medium local enterprises to benefit from multinationals joining their economy?
In Kenya, 2015 is the year when the deadline on implementation of the Gender 2/3 rule expires. The year when the government has demonstrated a commitment to investing more in youth, women and entrepreneurship and where innovation grew from products to financing and service delivery models. These include PPPs in infrastructure, private sector investment in energy, equipment leasing arrangements in the health sector and local partnerships in the school laptop project. 2015 is the year Kenya hosts the Global Entrepreneurship Summit, the 10th WTO Ministerial conference in December and hopefully the Pope in November.
The social and economic significance of these events does not escape us. This is a chance to open the market tremendously by showing our potential to deliver superior quality products and services from Africa to the world. Are we, the Kenyan youth, equipped to reap maximum benefit from these engagements? What distinct opportunities must we look out for and tap into?
This, among many other reasons, is why 2015 is such a pivotal year for Kenya specifically and Africa as a whole. 2015 has provided the much needed impetus for Africa to start moving from just promise and potential to actual prosperity. Never has a larger pen been handed to us to re-write the African narrative permanently. Finding solutions to the questions posed above is where the opportunity to make a difference lies. Those answers will go a long way in shaping the role we play towards developing our continent. Let’s be strategic Africa: as the adage goes, opportunity favors the prepared.