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$150,000 PRIZE OPENS FOR INNOVATIVE ENTREPRENEURS WITH SOLUTIONS TO AFRICAN CHALLENGES

A competition, which will award prizes to entrepreneurs and innovators

who deliver market-oriented solutions for African development, has

been announced by the African Innovation Foundation (AIF).

AIF calls for entries for the 2014 Innovation Prize for Africa. The prestigious

prize, presented annually since 2012, aims at encouraging innovations

that contribute to sustainable development in Africa. The winning

submission will be awarded a prize of $100,000, with two additional $25,

000, one for the runner up with an innovation with the best business

potential and the other one for the runner up with the innovation with

the best social impact.

Therefore, the Innovation Prize for Africa invites African entrepreneurs

and innovators to propose projects that unlock new African potential

under one of five categories that include agriculture and agribusiness,

environment, energy and water, health and well-being, ICT applications,

and manufacturing and services industries.

“The IPA team believes that the best way to build Africa’s capacity is to

invest in local innovation and entrepreneurship. This prize encourages

Africans to develop creative ways to overcome everyday challenges,”

said AIF founder Jean-Claude Bastos de Morais.

The IPA 2013 was awarded to South Africa’s AgriProtein for its innovative

approach to nutrient recycling – a method that uses waste and fly

larvae to produce natural animal feed. The 2013 prize also recognised

two additional winners for their contributions to African innovation. In

the business potential category, Hassine Labaied and Anis Aouini from

Saphon Energy (Tunisia) received $25, 000 for creating a bladeless wind

convertor.

CONTENT

BUSINESS DAY

1

1 $150,000 Prize Opens for Innovative Entrepreneurs with Solutions to African Challenges

2 Cape Entrepreneurs up the Ante

2 Nigeria to Host Africa Entrepreneurship Summit

3 The AfDB SME Program Approval: Boosting Inclusive Growth in Africa

4 African Development Fund - Skills, Jobs and Entrepreneurship in Rwanda

4 SMEs: Engine Of Social And Economic Development In Africa6

6 African Women’s Entrepreneurship Program Participants Gather at AGOA Forum

7 Ethiopia: “Entrepreneurship Isn’t About Easy Money”

10 $10m Venture Fund to Create More Jobs

11 Why African Entrepreneurs Outperform Their Peers On Leveled Playing Field

13 Economic Growth in Africa Provides Opportunity for SMEs

10 Nigerian Students Defeat U.S., China, South Koreans to Win Entrepreneurship World Cup

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In the social impact category, Sanoussi Diakite (Senegal)

received $25, 000 for developing and distributing a thermal

powered machine that husks 5 kilogrammes of fonio – an

important and healthy West African cereal – in just eight

minutes. This innovation increases accessibility to a nutritious

African staple food source and addresses challenges

associated with its consumption.

With more than 1,350 applications received to date, the IPA

aims to support Africans’ efforts to develop new products,

increase efficiency and drive cost-savings on the continent.

The IPA also provides a platform for African innovators to

showcase their solutions to potential investors and seek

partners to scale up their marketable concepts. Only

innovations by Africans and for Africans are eligible to enter.

Africans in the Diaspora can also apply if their innovations

are of significance to Africa.

The registration deadline for the 2014 prize has been set

for October 31, 2013. Detailed information of competition

categories, conditions of entry and submission procedures

are available on the Innovation Prize for Africa website.

Business Day. 2013. $150, 000 prize opens for innovative

entrepreneurs with solutions to African challenges.

Business Day [online]. 12 August 2013. Available at www.

businessdayonline.com/2013/08/150-000-prize-opens-

for-innovative-entrepreneurs-with-solutions-to-african-

challenges (accessed 12 August 2013).

In a report released in early 2013, South Africa showed

dismal performance in comparison to other emerging

countries in creating new entrepreneurs. The 2012 Global

Entrepreneurship Monitor report stated that entrepreneurship

statistics were lower in 2012 than that of the previous year.

Daniel Marcus, Cape-based chief executive officer of

conference and events company Living Your Brand says

that while entrepreneurial success is possible in South Africa,

a positive outlook and a never-say-die attitude are key for

survival.

Speaking of his own experience, Daniel says that Living Your

Brand, which this month celebrates three years in operation, Lagos — The board of International Federation of Training

and Development Organisation (IFTDO) has granted

was born out of fresh thinking and a general frustration with

the state of a certain niche. Together with Jaco van Zyl and

Jacobus le Roux, who run the events and conferencing

divisions of the business, Daniel has established Living

Your Brand as one of South Africa’s leading events and

conferencing agencies in just three short years.

“I’m a firm believer in the old cliché that ‘you can never be

too positive’. In South Africa there are so many negatives

that we could focus on instead of finding our individual

window of opportunity and jumping at it.” Daniel started

Living Your Brand after a series of both successful and

unsuccessful business ventures, to which he attributes the

success of the company. “You’re unlikely to succeed unless

you’ve experienced failure at some point.”

In addition to private events, Daniel and his team

conceptualised the popular Integrated Marketing

Communications conference (IMC) concept. The

conference, which is now in its fourth year, has run in both

Johannesburg and Cape Town – with a third event to

be held in London in 2014. He credits the success of the

concept to the passion and enthusiasm of the team at

Living Your Brand, as well as the gap they filled by focusing

on integration in the marketing sector.

Over the past three years the company has built up an

impressive client profile which includes brands such as

Bentley SA, FNB Wealth, Nedbank Capital, Sanlam Investment

Management, Vodacom, Standard Bank, Lanxess, Landis &

Gyr, GEMS and The Jacob Zuma Foundation.

“We are very excited about what the future holds for the

company as well as the industry. The passion and belief

in achieving new heights for clients that our team brings

everyday is what will continue to set us apart,” says Daniel.

Cape Business News. 2013. Cape Entrepreneurs up the Ante.

Cape Business News [blog]. 12 August 2013. Available at

http://www.cbn.co.za/dailynews/6917.html (accessed 12

August 2013).

NIGERIA TO HOST AFRICA ENTREPRENEURSHIP SUMMIT

CAPE ENTREPRENEURS UP THE ANTE

NURUDEEN OYEWOLE

CAPE BUSINESS NEWS

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Nigeria the hosting right of the 7th African Regional

Entrepreneurship Conference in November 2013.

At a press briefing heralding the conference in Lagos,

Chairman, Conference Planning Committee, Rev. Tunde

Salawu said the international conference which is to hold

in November, 2013 in Abuja is strategically employed to

address growing unemployment crisis in Africa.

“The summit is to harness resources across the continent

and to use skill acquisition in different ramifications to solve

youth unemployment which has become a scourge in the

whole of African continent. And it is on that basis we have

chosen as a theme for the conference: “Skills Acquisition

as a panacea for youth unemployment in Africa” Salawu

said.

According to the Organising Committee Chairman,

participants at the summit are drawn from both public and

private sectors of all African countries.

Salawu said topics such as economic and social impact

of youth unemployment in Africa, leveraging on ICT for

skill acquisition and youth employment, embedding

entrepreneurship in African education curriculum as well

the Public-Private Partnership option in addressing Skills

Development and Employment Crisis, among others.

Oyewole, N. 2013. Africa: Nigeria to Host Africa

Entrepreneurship Summit. Daily Trust (online). 20 July 2013.

Available at http://allafrica.com/stories/201307221353.html

(accessed 12 August 2013).

The Board of Directors of the African Development Bank

(AfDB) (http://www.afdb.org) approved today the Africa

Small and Medium Enterprises (SME) Program, a four-year,

US $125-million funding program combined with a US

$3.98-million technical assistance package granted by the

Fund for African Private Sector Assistance (FAPA), aiming at

supporting micro, small and medium enterprises (MSMEs) in

Africa.

The program will provide standardized lines of credit (LoCs),

mostly in local currency, and technical assistance to targeted

financial institutions, predominantly in low-income countries

spread over all five African regions. The SME Program will

avail important longer-term resources to thousands of

SMEs including women and youth, thus contributing to job

creation, poverty reduction and inclusive growth on the

continent.

The SME sector is crucial to Africa’s growth, contributing

more than 45% to employment and 33% to GDP. SMEs

continue to face significant challenges. Studies indicate

that more than 70% of SMEs lack access to medium-

longer-term finance, creating an SME funding gap of more

than US $140 billion in Africa alone. Well performing local

SME-focused financial institutions lack access to longer-

term resources from depositors, capital markets or other

potential funders hindering the provision of medium- and

long-term SME finance. Of the loans available, almost 60%

is for less than one year. Financial institutions also often lack

adequate knowledge and systems to assess and monitor

SME projects and compensate this by relying on excessive

– but mostly unavailable – collateral.

In response to these challenges the AfDB, through this SME

Program, will provide the necessary longer-term finance

and a technical assistance package to address a number

of the constraints faced by around 25 target financial

institutions and their SME clients across Africa.

Thus, the program will benefit from the Fund for African Private

Sector Assistance (FAPA) support that will grant US $3.98

million to provide technical support to building capacities

of the 25 participating financial institutions to improve their

operational efficiencies, in areas such as credit assessment

and risk management, thereby contributing to better

access to finance for African MSMEs sustainable growth.

FAPA is a multi-donor thematic trust fund, financed by the

Government of Japan, the AfDB, the Austrian Development

Bank and the Government of Austria, that provides grant

funding for technical assistance and capacity building

to support implementation of the AfDB’s Private Sector

THE AFDB SME PROGRAM APPROVAL: BOOSTING INCLUSIVE GROWTH IN AFRICA MARC MCILHONE

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Development Strategy. This US $3.98-million FAPA technical

assistance grant for the AfDB Africa SME Program is the

highest amount approved in the history of FAPA.

Improved access to financing amongst members of the

majority of urban and rural dwellers who depend on smaller-

scale business activities will allow further support to their

living and that of their families and communities. Women

are likely to benefit of the expanded outreach as they tend

to operate more often in rural-based smaller enterprises. The

social effects of the Africa SME Program will be significant

given the particular support to microfinance institutions in

low-income countries and fragile states, thus deepening

access to finance for micro and small enterprises in severely

underfinanced communities in the longer term, resulting

in poverty reduction and social inclusion. In addition, the

Program will also contribute significantly to capital market,

private sector development and government revenue.

Mcilhone, M. 2013. The AfDB SME Program Approval: Boosting

Inclusive Growth in Africa. AfricanBrains [online]. 24 July

2013. Available at http://africanbrains.net/2013/07/24/the-

afdb-sme-program-approval-boosting-inclusive-growth-in-

africa/ (accessed 12 August 2013).

Rwanda has been an economic success and has maintained

a strong growth path averaging 8% per year over the last

decade. Rwanda has made remarkable progresses on

the Millennium Development Goals, particularly in areas

of health, and in lifting one million people out of poverty

(MDG 4, 5, 6).

The Rwanda Skills, Employability and Entrepreneurship

Project (SEEP) is a sector budget support operation, to

build human capital, reduce unemployment, address the

skills mismatch between supply and demand in the labour

market, and stir innovation and entrepreneurship.

ADF Financing, Project Preparation, Advisory and Brokering

Role

ADF-12

SMEs (Small and Medium-sized Enterprises) are very

important to the growth of any nation. It is no surprise that

developed countries enjoying a growing and booming

economy attribute most of their achievements to a

flourishing SMEs sector.

Empirical studies have shown that SMEs contribute over

55 percent of gross domestic product (GDP) and over 65

percent of total employment in high-income countries.

In the developed economies, small businesses are recognized

ADF-12 provided a grant of US $37.5 million for this

operation.

ADF-13

ADF 13 is expected to play a crucial role in continuing to

support this project.

African Development Bank. 2013. African Development

Fund - Skills, Jobs and Entrepreneurship in Rwanda. African

Development Bank. 5 August 2013. Available at http://

allafrica.com/stories/201308052585.html (accessed 12

August 2013).

AFRICAN DEVELOPMENT FUND - SKILLS, JOBS AND ENTREPRENEURSHIP IN RWANDA

SMES: ENGINE OF SOCIAL AND ECONOMIC DEVELOPMENT IN AFRICA

AFRICAN DEVELOPMENT BANK

CHARLES YEBOAH FRIMPONG

Charles Yeboah Frimpong

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as the main engines for growth and development because

of their significant contributions to economic growth and

prosperity.

The potential of SMEs to promote domestic-led growth in

new and existing industries and to strengthen the resilience

of the economy in a competitive and challenging

environment is inarguable. According to the Department

of statistics of Malaysia, the economic growth in developed

countries such as Korea, Japan, Taiwan and many others, was

significantly generated by SME activities. The percentage

contribution of SMEs to Gross Domestic Product (GDP)/total

value added ranges from 60 percent in China, 57 percent

in Germany, 55.3 percent in Japan and 50 percent in Korea,

compared to 47.3 percent attained by Malaysia. The SME

growth is assessed by SME contribution to the three (3)

main sectors of the economy; manufacturing, services and

agriculture.

This shows that small and medium enterprises (SMEs) have

been the backbone of economic growth and driving

industrial development. Due to their sheer numbers, size

and nature of operations, the role of SMEs in promoting

endogenous sources of growth and strengthening the

infrastructure for accelerated economic expansion and

development has been recognized.

Small and medium-sized enterprises (SMEs) are increasingly

being recognized as productive drivers of economic growth

and development for African countries. For example, it is

estimated that SMEs account form 70 percent of Ghana’s

gross domestic product (GDP) and 92 percent of its businesses.

They also make up 91 percent of formalized businesses in

South Africa and 70 percent of the manufacturing sector

in Nigeria. SMEs not only contribute significantly to the

economy but can also serve as an impetus for economic

diversification through their development of new and

unsaturated sectors of the economy. In addition, innovative

and technology-based SMEs can provide an interesting

platform for expanding outside of domestic borders, and

entering intra-regional and international markets.

In many African countries SMEs account for about 50% of

job creation. In Tanzania for example, it is estimated that

more than a third of the GDP originates from the SME

sector. In South Africa on the other hand, it is estimated

that 91 percent of the formal business entitles are MSMEs,

contributing between 52 and 57 percent to GDP and

providing about 61 percent to employment.

A study conducted by the University of Ghana in the past

estimates that small enterprises in Ghana provide about 85

percent of manufacturing employment and also further

states that SMEs are believed to contribute about 70

percent to Ghana’s GDP and account for about 92 percent

of businesses in Ghana.

Small businesses contribute to local economies by bringing

growth and innovation to the community in which the

businesses are established. Small businesses also help

stimulate economic growth by providing employment

opportunities to people who may not be employable by

larger corporations. Small businesses tend to attract talents

who invent new products or implement new solutions for

existing ideas.

Larger businesses also often benefit from small businesses

within the same local community, as many large corporations

depend on small businesses for the completion of various

business functions through outsourcing.

Irrespective of the awareness of the remarkable contribution

of SMEs to the development of African economies, it has

to be admitted that the growth of SMEs in Africa faces

a number of generic challenges. The first and common

challenge is the lack of access to appropriate capital from

both the banking sector and the capital markets. There is a

general perception in the financial sector that lending or

provision of capital to SMEs is risky business due to a number

of reasons: high mortality rates of SME businesses, suspect

management capabilities and skills, poorly prepared

business proposals, obscure historical records of the

operations of the SMEs and the lack of reliable collateral or

collateral mismatch between type of assets held by SMEs

and type of assets required by banks for collateral.

Contrary to the developed world where SMEs enjoy a great

deal of protection and pampering, Africa’s SMEs are said

to be living on the edge as borrowing institutions dedicate

much of their loan portfolios to big business. Besides, SMEs in

African countries lack the needed infrastructure and strong

government policies to protect and support them put up

their best to contribute to economic development.

It is said that the contribution of SMEs to the national GDP

of Nigeria is poor for myriad reasons, including inadequate

infrastructural/financial support to businesses operating

within the various sectors, limited application of innovation

to operations within the segment, unfavourable competition

with foreign goods and services among others.

Lack of credit access indeed places a heavy burden

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on entrepreneurs to raise large amounts of capital for

business development themselves and makes it hard for

ideas to grow into enterprises. Improving access to credit

is thus crucial if SMEs are to reach their potential and allow

businesses to move from start-ups to established businesses

with growth potential.

Credit is also essential for creating an entrepreneurship spirit

as it allows businesses to fail and rebound rather than just

fail. Indeed, it is common for a number of start-ups and small

businesses to fail, and a climate that allows failure allows an

entrepreneur to learn from that failure and start afresh. It is

in such an environment that innovation and success can

most thrive.

Although small businesses may not generate as much

income as large corporations do, they are a critical

component of and major contributor to the strength and

growth of local economies. Small businesses present new

employment opportunities and serve as the building blocks

of the largest corporations in developed countries.

Economies that have had the SME sector make better

contribution to GDP have shown consistent commitment to

the development of the sector by implementing access to

finance and financial incentives, basic and technological

infrastructure, adequate legal and regulatory framework,

and a commitment to building domestic expertise and

knowledge.

In this context, a policy thrust to grow successful SMEs must

take pre-eminence if long term sustainable economic

development and transformation of Africa is to be

realized.

Charles Yeboah Frimpong

University of Ghana

Member, The Institute of Chartered Accountants

(Ghana)

Tel: +233-246-542-642

Email: fycharles.7@gmail.com

Frimpong, C.Y. 2013. SMEs: Engine Of Social And Economic

Development In Africa. Spy Ghana [online]. 28 July 2013.

Available at http://www.spyghana.com/smes-engine-of-

social-and-economic-development-in-africa/ (accessed

12 August 2013).

The African Women’s Entrepreneurship Program (AWEP) is

a U.S. Department of State initiative that was launched in

2010 alongside the African Growth and Opportunity Act

(AGOA) ministerial forum in Zambia. AWEP builds networks

among women entrepreneurs across sub-Saharan Africa

poised to transform their societies by owning and operating

small and medium businesses and by becoming voices for

social progress in their communities.

August 10-11, AWEP’s Ethiopia Chapter will host a forum

prior to the 2013 AGOA Forum’s ministerial program held

in Addis Ababa, Ethiopia. One hundred AWEP women

entrepreneurs from across the continent will participate in

the forum, themed “Queen of Sheba: The Entrepreneur.” U.S.

Congressional delegates, private sector practitioners and

senior U.S. and African officials will also participate.

This year’s forum will focus on best practices for trading under

AGOA, access to finance for women, business development,

regional initiatives empowering women entrepreneurs, and

use of social media to build a successful business.

The First Lady of Ethiopia H.E. Roman Tesfaye, U.S. member

of Congress Karen Bass, and African Union Commissioner

for Trade and Industry Fatima Acyl will open this year’s

AWEP Forum, and U.S. Department of State Deputy Assistant

Secretary for African Affairs Cynthia Akuetteh and AWEP-

Ethiopia President Samrawit Moges will close the forum.

On the evening of August 11, AWEP will participate with the

Corporate Council on Africa’s U.S.-Africa Business Center

and the Intel Corporation to host a Business-to-Business

(B2B) Networking Event. This event provides an opportunity

for AWEP entrepreneurs to network with U.S. companies

and investors from various sectors such as manufacturing,

services, technology, and fashion and textiles to build upon

the connections the women made during their AWEP

exchange to the United States. More than 100 AWEP women

entrepreneurs, 30 U.S. companies, and U.S. Congressional

delegates have been invited to attend.

AFRICAN WOMEN’S ENTREPRENEURSHIP PROGRAM PARTICIPANTS GATHER AT AGOA FORUM

US DEPARTMENT OF STATE

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A number of African pioneers and entrepreneurs have

ventured towards establishing technology start-up

companies and innovation hubs. The eLearning Africa

Report interviews Markos Lemma co-founder of iceaddis,

an innovation hub based in Ethiopia

Please tell us about your personal journey: what was

your most influential formative educational experience

as you were growing up?

I never went to any particularly exceptional schools in

my childhood. I attended public schools both at primary

and secondary level. But the most influential formative

educational experience I had was when I joined a

university. I obtained a Bachelor’s degree from Royal

Melbourne Institute of Technology (RMIT University) through

a programme of the African Virtual University (AVU), which

I attended in Addis Ababa with a mixed-mode education

system.

The programme incorporated standard lectures (from

Addis Ababa university facilitators), VSAT live lectures from

Melbourne, via the WebCT eLearning platform (undoubtedly,

the first eLearning programme in the whole country) and

different virtual platforms. I believe this method of mixed-

mode learning and teaching is very effective: it gives

students unlimited possibilities of getting their questions

answered from different places.

What was it that inspired you to start iceaddis?

I am one of the co-founders of iceaddis. In the beginning, we

were asking ourselves very basic questions. “Where can the

Ethiopian creative youth go when they have great ideas?”,

“How do people start a business with zero experience?”,

“What can link universities with industries?” The answers

weren’t as easy as the questions.

Previously, I was involved in private sector development

projects at the German Association for International Co-

operation (GIZ), back then GTZ. We already noticed many

gaps, even with export-oriented companies, in the country.

Undoubtedly, the biggest inspiration came when one of

the co-founders visited iHub Nairobi. We felt the dots were

connected, and the answer was of course as easy as the

question. We needed open spaces, collaborative physical

platforms, and we need some energised people who are

able to drag hands and tap backs to create something

great in a country where innovation and co-working are

least endorsed.

Please tell us how you influenced iceaddis since it was

started.

Community management is in the foundation of the iceaddis

structure. We believe establishing new vibrant communities

and supporting the existing tech communities is a key

precursor for start-ups to emerge. The encouragement of

these communities creates its own competition and the

desire to do and make big things. I have been involved

in tech community management at iceaddis since the

beginning. Tech communities in Ethiopia are very vulnerable.

Communities need constant follow-up, workshops, events

and communications. Can you give us an example of the

challenges you have faced whilst working at iceaddis: how

did you overcome them?

One of the biggest challenges we have is the lack of real

co-operation from the private sector, government institutes

or international organisations. There is always verbal

appreciation and willingness to participate but this isn’t

always done visibly.

Furthermore, recruiting creative, innovative and fast-paced

and self-motivated individuals into the communities is very

hard. The mind-set is not there yet. There are more talkers

than doers. Entrepreneurship isn’t about quick money. It

is about changing the course of services and products.

This needs dedication and consistency. We faced a lot of

challenges finding such committed people. This is an on-

going challenge.

Another challenge we face is the Internet infrastructure. We

don’t want our entrepreneurs to waste one minute of their

For more information on AWEP, please visit: http://www.state.

gov/p/af/rt/awep/index.htm or email AWEP@state.gov

US Department of State. 2013. African Women’s

Entrepreneurship Program Participants Gather at AGOA

Forum. US Department of State (online). 9 August 2013.

Available at

http://www.state.gov/r/pa/prs/ps/2013/08/213025.htm

(accessed 12 August 2013).

ETHIOPIA: “ENTREPRENEURSHIP ISN’T ABOUT EASY MONEY”

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precious time, but the sole Internet service provider, Ethio-

telecom, is still struggling to find its position in the Ethiopian

tech scene. Only one per cent of the general population is

connected to the Internet; this is very small market share for

the entrepreneurs who are working solely in the ICT sector.

Products are not consumed, so the profits are minimal.

As a hub we can’t even afford an Internet connection of

more than 4MBps. This slows down our activities at every

level. In addition, other infrastructures related to the Internet

are still in the infant stage. East Africa is well known for its

mobile banking, however, this has not taken hold in Ethiopia

yet. Developers don’t have infrastructure to sell their product

to customers. They cannot upload their product to either

Google Play or the Apple Store. There are no credit card

systems and no international banking services.

However, we have been developing a local app store to

tackle this problem. Once this platform is up, developers will

be able to start to sell their products to customers in Ethiopia

using SMS balance transfer. We take these challenges

positively. The reason we are up here and working is to

make sure that innovative ideas come out of the hub to

tackle such issues. We are innovation hub, not an ICU unit!

How do you think technologies can best help build

sustainable human development across Africa?

The answers for most of the questions we have in Africa are

critical thinking and access to technology. Usually, people

think about high-techs whenever they think of technology.

The truth is we need to get access to technology at every

level. Promoting and using technology should be widely

practiced. As the famous saying goes: “it is easier to have

old problems than new solutions”. We need to accept

new solutions. There is no magic technology which solves

all the problems we have. In reality, only few technologies

work in specific situations out of thousands of technologies

available. We need to try out, test and keep on promoting

and using these solutions.

Africa is famous for mobile technology and social media. If

the next big thing doesn’t come out of Africa, there will be

no next big thing. Africa is big. My knowledge is very much

limited to my surroundings, but I believe that in every village

everyone should work to enable access to technology and

encourage people to think critically.

What do you think is the most significant change that

needs to happen in order to tackle the education and

training challenges that Africa faces?

The first and basic change that should occur is that Africans

need to believe that if we don’t solve our problems, no one

will. But I think I am too late to state this. Most Africans are

already aware of that. The basic change is done. Education

is the key and it all starts at the family level. Families have

the highest responsibility in raising the next generation.

I believe the biggest change should happen to tackle

education and the challenges we face in Africa is to have

a tight relationship between communities and educational

institutions.

The Internet infrastructure should be improved. Schools

need to be more equipped and open. I have noticed in

the schools in Ethiopia that schools are only for the students.

This attitude should be changed. Higher education should

work closely with the private sector; students need to

get their hands dirty. If education is all about theories, we

only need to teach people to read. We need to learn but

also practice what we learn. I know these are basic and

elementary statements. But these are the essentials.

Education reforms and curriculum revision should be carried

out at every level. We should stop teaching, we should start

educating.

What do you consider to be the most transformative,

innovative and exciting initiative currently taking place

in technologies and education, skills development and

lifelong learning and training in Africa?

I’m really excited to be part of the reading research project

currently running in two Ethiopian villages. This project is

aimed to tackle low literacy levels - a serious problem in

Africa. The research is carried out in collaboration with OLPC,

MIT and Tufts University. Basically, we give tablets to the kids

and check if they can learn how to read just through using

apps. The programme has been running for one year, and

the children in the project are at the cusp of being able to

read. This is a very innovative and transformative initiative

going on in Africa right now.

M-Learning is very transformative. There is high penetration

of mobile phones on the Continent. This is something growing

at an interesting rate. There are more mobile phones in

Uganda than light bulbs and 91 per cent of South Africans

own at least one mobile phone. In Gabon, there are more

mobile subscriptions than inhabitants.

Using mobile phones for education is not only innovative;

it is also far cheaper than traditional models. Schools don’t

need to provide mobiles as students already own them. This

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is a great advantage over organising a computer lab. The

culture of mobile communication is also mature - people

in Africa know very well how to operate a mobile phone.

This is especially interesting considering the fact that mobile

technology is one of the fastest growing technologies in

the world. Ubuntu already introduced standard Operating

Systems for mobiles. I believe the schools should seriously

consider how to teach students to get the maximum use

out of their mobile phones.

The vibrant spread of innovation and incubation centres

is also a good example of great African initiatives. These

hubs help the students learn entrepreneurship, life-skills

and business skills and they have enough facilities to

give on-the-job training.

What is the most significant lesson or piece of advice

you would share with others seeking to follow in your

footsteps?

A new mind-set is coming to Africa. This generation of

Africans is tired of aid. We are sick of listening to the

same old single-story over and over again. I began with

understanding our surroundings. I have been giving enough

attention to what is going on around me before I look to

see what’s up thousands of kilometres away. Our streets are

full of opportunities and it is important to participate at the

community level.

I believe we need to do things on the spot, communicating

as far as it is possible and thinking of the long-term and

comprehensive benefits.

My advice is that it is all about drawing a small circle

around us. We need to give extra attention to where we

are living. We need to influence the people around us and

start small. Of course, the more we win over the heart of our

community, the more our circle will expand.

Looking forward to the next five years - what do you

see on the horizon in terms of influential changes,

transitions, technologies and trends that will affect the

integration of educational technologies in education,

skills development and lifelong learning landscape in

Africa?

In near future, the participation of private companies in the

education sector will grow. Almost 50 per cent of Ethiopia’s

population is under the age of 18. With scarce facilities, this

is a big threat and traditional educational institutes cannot

satisfy this need alone. The Ethiopian Ministry of Education

targets to have at least one school in each “kebele” (about

3 km radius). This means that the numbers of students who

are ready to join university are extremely huge. It requires a

lot of private sector involvement.

The Internet penetration will also increase in the coming

years. This will give a suitable environment for eLearning

and mLearning. I also expect that the number of diaspora

Africans coming back to Africa will increase. This will

make the universities better equipped in terms of human

resources.

I also believe Open Educational Resources (OER) will

be widely used. More and more schools are integrating

mobile phones into their classrooms. More content will be

generated by Africans. Investment in affordable tablets

and laptops will circumvent the high cost of printing text

books.

What will iceaddis contribute to Africa’s human

development over the next five years?

iceaddis is a place for high potentials. Startups emerging

out of iceaddis will create unique job opportunities. The

whole philosophy of open and common knowledge is to

influence the mind-set of young Ethiopians. Iceaddis will

work on encouraging sharing culture, promoting Ethiopian

innovation to the world.

The icehubs network is a growing network: icecairo in Egypt

and icebauhaus in Germany are already established entities

and I believe the icehubs network will be expanding to

other neighbouring countries. There are already initiatives to

open hubs in South Sudan, Kenya and Djibouti. The iceaddis

prototyping facilities will also enable our communities to

design their products.

We are looking forward to forging new partnerships and

connecting with more supportive organisations: we are

open to any kind of cooperation! Our contribution is to be

a home for future innovators. “Entrepreneurship Isn’t About

Easy Money” is one of the twelve opinion pieces featured

in the eLearning Africa 2013 Report. To read more about

the annual publication, please visit: http://elearning-africa.

com/media_library_publications_ela_report_2013.php.

eLearning Africa. 2013. Ethiopia: “Entrepreneurship Isn’t

About Easy Money”. AllAfrica.com [online]. 9 July 2013.

Available at http://allafrica.com/stories/201307160419.

html?viewall=1 (accessed 12 August 2013).

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“The investment is important and we are hoping to grow

the fund to over US$30 million as the US$10 million is just 30

percent of the total capital,” Mr Mwale said.

“Within the next two years, the fund will grow and be

opened up to other Zambians locally and abroad to take

up shareholding in the firm,’’ Mr Mwale said.

He said between 30 and 40 people are expected to

be employed initially and more later as the company

expands.

The firm will help SMEs which lack access to finance from

banks or those which have already accessed financing

through the banks and are looking for more capital.

It will also be dealing with start-up SMEs and existing

companies that will be assessed on a case-by- case basis

or through risk assessment.

Mr Mwale said the criterion is difficult to determine as the

firm will be dealing with different sectors, hence the need to

conduct risk assessment.

“We will assess on a case-by-case basis and if it is a business

that has a lot of opportunities for growth, we may get

into that business, take equity into that business or help to

restructure their debt,’’ he said.

The firm is targeting as many entrepreneurs as the fund will

allow countrywide, particularly those which will add value

to the economy in processing, manufacturing, information

and communication technology, tourism, agro business

and energy.

Mr Mwale said a venture capital fund is not like a typical

financial institution where firms borrow money, but deals

mainly with equity or partnerships.

“So if you are an SME and you want finance in your institution,

you don’t need to borrow from the bank….all you can do

is approach us and get some partnership or equity instead

of a loan,’’ he said.

The company will participate as a shareholder for a

particular period, and thereafter, it will place its investment

in another firm.

Mr Mwale said he is optimistic that the fund will succeed as

it is “very attractive” for the local market.

Sungani Mwale, Meanwood Venture Capital chief

executive officer, formerly of Merryl Lynch in the United

States. Meanwood has pumped US$10million in the first ever

venture capital fund in Zambia that is expected to uplift

small and medium scale business in Zambia.

The first ever private sector venture capital fund has been

set up in Zambia, with an initial investment of US$10 million

(K54 million) which is expected to create hundreds of jobs

and help to reduce poverty in Zambia, the Daily Mail has

learnt.

The ambitious project, intended especially for small-scale

businesses, is the brainchild of Meanwood Properties Limited

and will be called Meanwood Venture Capital after being

incorporated on May 30, 2013. It will provide private equity,

which is often hard to access from commercial banks

because of high interest rates.

Company managing director Sungani Mwale said in Lusaka

yesterday that while the initial capital is US$10 million, the

target is to grow the fund to US$30 million (more than K150

million), seek boosting local shareholding among Zambians

and also benefit Zambians in the Diaspora in the next two

years.

$10M VENTURE FUND TO CREATE MORE JOBS

NKOLE CHITALA

Sungani Mwale

11Empowerment Through Entrepreneurship

AUGUST 2O13

He also urged SMEs that are short of money to allow the firm

to participate as a shareholder to grow their businesses.

Mr Mwale advised firms to use corporate advisory services

as the firm will provide restructuring support to firms with

a perfect business model and products but need help in

managing the business.

The firm will also guarantee loans with the bank by

underwriting the risk for the firm which wants to access a

loan from a bank but has no collateral.

“This will benefit SMEs, Government through economic

growth and other players such as banks. So, we are providing

a whole package,” he said.

Chitala, N. 2013. $10m Venture Fund to Create More Jobs.

Zambia Daily Mail [online]. 12 August 2013. Available at

http://www.daily-mail.co.zm/local-news/20325 (accessed

12 August 2013).

Entrepreneurs in some of the world’s poorest countries

should find cause for optimism in “Explaining Africa’s (Dis)

Advantage,” a recent study co-authored by Wharton

management professor Ann Harrison and published by the

National Bureau of Economic Research.

“If … you were to give African entrepreneurs the same kind

of environment as an American or European entrepreneur,

they would outperform their counterparts,” Harrison says. By

imagining impoverished African nationals on a level global

playing field, Harrison and colleagues Justin Yifu Lin at Peking

University and L. Colin Xu at the World Bank see ample

potential for “a positive reinforcing cycle of development.”

In contrast with existing research that examines the

big picture in Africa using macroeconomic data and

microeconomic studies of single outcomes — which

often overlook the broader aspects of how African firms

behave and perform — Harrison, Lin and Xu take their

research a step further. They parse the macro picture using

firm-level data from 12,000 companies in 32 sub-Saharan

African countries whose average annual per capita GDP

languishes below $3,000. Per capita GDP in the poorest

countries is less than $500 a year. The data were supplied by

the World Bank’s Enterprise Surveys, which, the researchers

write, are designed “to benchmark the investment climate

in developing countries across the world and to understand

the determinants of firm performance and behavior. In each

country, the survey was based on the universe of eligible

firms obtained from the country’s statistical office … and

the result is a representative sample of the non-agricultural

private economy in the country.”

According to the researchers, insufficient infrastructure,

scarce access to credit and political monopolies cripple

these economies. Inefficient telecommunications, a proxy

for infrastructure, consistently retains top ranking among

the reasons for their perennial disadvantage. The difficulty

to gain financing — due to a lack of formal lending sources

— garners second place. Single-party rule also inhibits

progress to a lesser degree. “If one could adjust the daunting

list of geographic, infrastructure, political, economic and

institutional factors to the levels [that exist] elsewhere,” the

authors write, “Africa possesses an inherent advantage.”

Harrison adds that this could be because African firms

have had to become stronger and work smarter in order to

survive such a challenging environment.

A ‘Daunting’ Business Environment

Using statistical adjustments that offset regional

disadvantages, the researchers recalculated key

performance measures. A revised roster shows that Africa

leads in total factor productivity (the gold standard for firm-

level performance in academic research), sales growth,

labor productivity and labor productivity growth, among

other variables. They also added adjustments for regional

conditions like bribery, tenacity of regimes to stay in power,

predilection for armed conflict, ethnic fractionalization,

difficulty firing unsuitable workers and a sizeable “informal”

business sector that doesn’t report bottom lines.

The researchers then compared the adjusted results from

WHY AFRICAN ENTREPRENEURS OUTPERFORM THEIR PEERS ON LEVELED PLAYING FIELD

VENTURES AFRICA

12

IGNITING POTENTIAL

Empowerment Through Entrepreneurship

the poorest African nations with two other groups: A similar

“average comparison” group of countries outside Africa

and a “better comparison” group populated by countries

with more advantageous conditions for doing business.

Several industries furnished data about manufacturing

and services, including metals and machinery, electronics,

chemical-pharmaceuticals, wood and furniture, non-metals

and plastics, automobiles and parts, and other types of

manufacturing.

The researchers found that unsurprisingly, without controlling

for the significant challenges that African countries face,

the businesses in those nations perform significantly worse

than those in other parts of the world, exhibiting lower

productivity levels, growth rates, fewer exports and lesser

investment rates. But when the researchers controlled for

all the mitigating factors, the outcome changed — African

firms in the formal business sector led those located in

other areas in productivity levels and growth. The region’s

advantage was greater in low-tech as compared to high-

tech manufacturing. It was also not present in the service

sector.

However, that optimism is still tempered by the facts, the

researchers note. “African firms face a more daunting

business environment in almost all respects,” they write.

“They operate in poorer, smaller economies that are more

likely to be landlocked and they have inherited a history of

armed conflict. Political monopolies divert profits, tariffs are

higher and bribes are routine.”

Making Progress

The research indicates that the success of many African

firms depends on autocrats surrendering power and vibrant

financial systems taking root, among other tectonic shifts.

The number of years that a single party has ruled is adversely

correlated with labor productivity and sales growth,

Harrison notes, and the negative effects of a political party

monopoly are slightly stronger in countries where informal

commerce plays a bigger economic role. Similarly, party

monopoly significantly reduces growth in manufacturing

but not in services.

Far-fetched as it may seem, don’t rule out the possibility of an

upheaval that would change the business climate in some

of these nations for the better, Harrison adds. Change comes

fast nowadays, often spurred by telecommunications, as

the Arab Spring illustrated. In that respect, these countries

are fertile. When landlines prevailed in central Africa,

barely 2% of consumers had access to telephones. Today,

technology has leapfrogged landlines, and more than

eight in 10 Africans have access to a cell phone. That’s a

lot of progress in a relatively short period of time, Harrison

notes, and it signals the chance for more to come, possibly

sooner than traditionally expected.

Some of the researchers’ data even shed a favorable light

on ethnic fractionalization, which is common in Africa and

thought by most experts to hobble progress. “Our micro

evidence does not bear this out,” the researchers say.

“Indeed, ethnic fractionalization is robustly and positively

correlated with labor productivity levels and growth.”

Harrison compares this advantage to the ways that America

has benefited from being a nation of immigrants. “The

heterogeneity encourages creativity and cooperation,”

she notes.

The authors conclude that their study attacks a paralyzing

preconception. “There is no inherent Africa ‘curse’ that

hinders its development,” they write, “only a need for action

to address the poor political and business environment. This

is consistent with Africa’s growth record before the 1970s

and the growth record in the past decade.”

Don’t blame the myriad problems facing the region on

local firms, Harrison adds. They often have the right stuff to

succeed. Instead, blame governments and a corporate

climate that fails to furnish what the sector needs in order

to flourish and grow to the next level. “The implications for

what needs to be done to nurture a strong business sector

are clear: promote infrastructure, expand access to bank

and trade credit and encourage political competition,” she

notes.

Ventures Africa. 2013. Why African Entrepreneurs

Outperform Their Peers On Leveled Playing Field. Ventures

Africa [online]. 23 July 2013. Available at http://www.

ventures-africa.com/2013/07/why-african-entrepreneurs-

outperform-their-peers-on-leveled-playing-field/ (accessed

12 August 2013).

13Empowerment Through Entrepreneurship

AUGUST 2O13

challenges. R3.2 trillion has been earmarked to be spent

on 40 major infrastructure projects over the next three years

in South Africa, and Kenya is reportedly building the multi-

billion dollar Lamu Port-South Sudan-Ethiopia Transport

project, which will connect the country’s Lamu port with

South Sudan and Ethiopia via road, railway and oil pipeline

network.”

Paper says that it is also a risk for SMEs to expand too quickly,

or in an uncontrolled manner, as when this happens cash

flow and customer satisfaction are usually the first casualties.

“The trick is to carefully manage the expansion process,

so that business owners reap the medium and long-term

benefits.”

Paper predicts that SMEs will play a crucial role in the

economic growth that is expected on the African

continent. “Latest research by Menon Business Economics

shows that gradually, SMEs will play an integral role in

industrial development and restructuring, satisfying rising

local demand for services, which will allow for increased

specialisation and supporting larger firms with inputs and

services.”

He says that African entrepreneurs definitely operate in a

more challenging environment and thus need to be more

creative and resilient in order to make their businesses

succeed. “However, if they are able to operate and

succeed despite their numerous challenges, they will have

the potential to thrive,” concludes Paper.

Cape Business News. 2013. Economic growth in Africa

provides opportunity for SMEs. Cape Business News [online].

8 August 2013. Available at http://www.cbn.co.za/

dailynews/6914.html (accessed 12 August 2013).

Nigeria won the Students for Advancement of Global

Entrepreneurship (SAGE) World Cup 2013.

Nigeria has won the Students for Advancement of Global

The World Economic Forum, recently held in Cape Town,

highlighted the substantial economic growth that is

expected to occur on the African continent over the next

five years. It is predicted that Africa will have six or seven of

the fastest-growing economies in the world, as well as the

largest overall growth of any continent within the next five

years.

According to Mark Paper of Business Partners International,

speaking in light of Africa Day, celebrated annually on 25

May, this economic growth presents a significant opportunity

for small and medium enterprises (SMEs,) which are looking

to expand in the region. “Africa has been touted as the

next growth region, and should therefore present value to

SMEs which have done their research correctly and will be

able to service this growing market.

He says that however, although large businesses and

corporates have the ability and resources to expand into

Africa, this move may be more challenging for SMEs. “There

are still some obstacles for SMEs to overcome should they

wish to expand successfully into the region.

“The infrastructure in many parts of Africa is far less

conducive for creating an entrepreneurial environment

and entrepreneurs often struggle with electricity and

transport challenges, which all hinder growth.

“In addition, entrepreneurs in some parts of Africa have

considerably less access to funding as the banks are much

stricter in comparison to South Africa. African entrepreneurs

also face significant challenges when it comes to human

resources, as they do not have an abundance of skilled

workers in the region.”

However, Paper says that despite the many challenges

that African entrepreneurs face, they often manage to

overcome these and succeed in various industries, which

contributes positively to the economy of their respective

countries.

“African governments are increasing their investment into

infrastructural development projects on the continent,

which will assist entrepreneurs overcome some of their

ECONOMIC GROWTH IN AFRICA PROVIDES OPPORTUNITY FOR SMES

NIGERIAN STUDENTS DEFEAT U.S., CHINA, SOUTH KOREANS TO WIN ENTREPRENEURSHIP WORLD CUP

CAPE BUSINESS NEWS

PREMIUM TIMES

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IGNITING POTENTIAL

Empowerment Through Entrepreneurship

Entrepreneurship (SAGE) World Cup 2013 competition, the

News Agency of Nigeria reports.

It was organised by SAGE Global on Sunday Night in

Abuja in collaboration with Small and Medium Enterprises

Development Agency of Nigeria (SMEDAN) and other

Federal Government agencies.

Nigeria was represented by Junior Secondary School (JSS),

Jikwoyi, Abuja, and University of Calabar International

School (UCIS), Calabar.

JSS took the lead in the Social Enterprises Business (SEB)

category, while China emerged second and South Africa

came third.

UCIS came second in the Social Responsibility Business

((SRB) Category.

Prof. Curtis DeBerg, Global Coordinator of SAGE, who

announced the result involving 11 countries, said Nigeria

was leading in the integration of entrepreneurship in school

curriculum.

Deberg said entrepreneurship was not well taught in any

country but that Nigeria had taken the lead in integrating

it.

Other countries that participated in the event included:

USA, South Korea, Uganda, Kenya, Rwanda, Russia and

Singapore. Nigeria had won the SAGE World cup seven

times by beating USA, Russia, China, Singapore, Canada

South Africa, Great Britain and Ghana, among others.

Agwu Amogu, Africa Coordinator of SAGE, said it was

established as part of efforts to galvanise the enormous

creative energies and resources in the world to eradicate

poverty.

According to him, it will teach beneficiaries entrepreneurship

and financial literacy skills needed to be successful.

The Director-General of SMEDAN, Bature Masari,

commended the two Nigerian schools for the victory and

for retaining the cup.

Mr. Masari said the government was working round the

clock to give youth empowerment a pride of place in the

scheme of things.

“Right now, there is a new thinking in government to ensure

that entrepreneurship development is given the needed

support.

“That is why SMEDAN, which is the agency saddled with

the responsibility of leading the fight for the development

of SMEs in the country, is being repositioned, funded and

empowered.

“This is to ensure that we continue to provide leadership

and direction for SMEs and entrepreneurship development

all over the country.’’

Mr. Masari said the hosting of the competition was an

indication that the government “is ready to develop our

youth and nation economically, socially and politically.’’

The competition, second to be hosted by Nigeria, and 11th

in the series, is aimed at advancing youth entrepreneurship

and community service.

It emphasises ethical business practices, social responsibility,

civic engagement and environmental awareness.

Teenage entrepreneurs from around the world showcase

their innovative business and community service projects to

a panel of judges.

The competition has two major categories – Socially-

Responsible Business (SRB) and Social Enterprise Business

(SEB).

Premium Times. 2013. Nigerian students defeat U.S.,

China, South Koreans to win entrepreneurship world cup.

Premium Times [online]. 12 August 2013. Available at http://

premiumtimesng.com/news/142616-nigerian-students-

defeat-u-s-china-south-koreans-to-win-entrepreneurship-

world-cup.html (accessed 12 August 2013).

Students for Advancement of Global Entrepreneurship

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